The International Chamber of Shipping (ICS) has warned that the combined effects of the Panama Canal Authority’s (ACP) new freshwater charge and Toll modification could add up to a price hike of over 30% for some ships passing through the Panama Canal.
As previously reported by Bunkerspot, the ‘freshwater charge’ was announced in January and is set to come into effect tomorrow (15 February). The charge will be set at $10,000 for any vessel over 125 feet long. There will also be a variable surcharge based on the level of the Gatun Lake at the time of transit. In a statement issued yesterday, the ICS said it had calculated that this move will increase costs to ships passing through the Panama Canal by up to 15%.
Meanwhile, ACP is also set to introduce what the ICS regards as ‘significant changes’ in its tolls, which will come into effect on 1 April. According to the ICS: ‘This Toll modification could see additional cost increases of up to 17% for ships passing through the Canal.’
The ICS continued: ‘If the charges are combined, some ships passing through the Panama Canal could face price hikes of over 30% by April 1st. The period between the announcement of the new “Freshwater Charges” and their date of implementation is only a month, giving little time to consider the decision and its potential effects. All stakeholders were engaged in the decision-making process for the Toll modification last year, and the Panama Canal Authority at this time agreed to defer increases to allow shipowners to factor in the rise.’
Guy Platten, the Secretary General of the ICS, commented: ‘While we have worked with the Panama Canal Authority to manage the upcoming implementation of toll modification rise on April 1st, the introduction of the ‘Freshwater Charges’ have taken the shipping industry by surprise.
‘The industry is currently facing increased price pressures globally, as demand has been hit hard by coronavirus and markets are adjusting to the new regulations on sulphur levels.
‘It is therefore highly inadvisable for the Panama Canal Authority to put increased strain on industry and the wider global economy at this time. Shipping already operates on the slimmest of margins. Cost hikes in this range, without sufficient warning, places undue pressure on the industry at a sensitive time when we are being asked to invest in a low emissions future.
‘We encourage the Panama Port Authority to consider postponing the introduction of the ‘Freshwater Charge’ to give industry a chance to better prepare.’