As part of what it says is its commitment to improve customer experience and reflect the growing value of the waterway, the Panama Canal Authority in April issued a proposal for a new simplified toll structure that the Authority says would “provide price stability for customers in years to come.”
It would also, the Authority said, offer customers “predictability, establishing tariffs well in advance allowing them to plan their business decisions accordingly.”
The proposed toll structure will reduce the number of tariffs from 430 to less than 60, with the simplified system minimizing unnecessary complexity and facilitate transactions by eliminating toll bands and introducing tariffs based on the locks used and vessel size.
The proposed toll structure recommends the following key adjustments, among others:
Replacement of toll bands with fixed and capacity tariffs. The Panama Canal plans to eliminate toll bands and introduce simplified tariffs according to the locks used, as well as the vessel type and size category. Tolls would be determined by two components: a fixed tariff per transit, according to the locks used and the vessel size category; and a capacity tariff per vessel types and size category.
Replacement of tariffs for vessels in ballast. The Panama Canal Authority would reduce complex tariffs for vessels in ballast that it determines are not consistent with the value provided to customers. Under the proposal, vessels transiting in ballast would pay a percent of the regular laden toll, independent of the market segment, and the special return trip tariffs for container and liquefied natural gas vessels would be phased out.
Modifying the loyalty program. The loyalty program was created in 2016 to incentivize the migration to the Neopanamax locks. This was achieved as currently 55% of total tonnage transits through these locks. The Canal seeks to simplify the loyalty program for container vessels by reducing the number of categories from six to one. The plan would have one loyalty level applicable to customers deploying more than 1.5 million TEU per year. The program would then be phased out by 2025.
“Our ability to maintain a safe, reliable route amid rising climate and supply chain challenges hinges on making strategic investments and adjustments to our business structure today,” the Panama Canal’s Vice President of Finance, Victor Vial, said. “Groundbreaking investments are already underway to capitalize on these changes and strengthen the Panama Canal’s role in connecting smarter, more sustainable supply chains.”
Along with the proposed changes to its toll structure, the Panama Canal plans to invest an estimated $2 billion in water projects, and will pursue additional investments in digital transformation, infrastructure maintenance, as well as new infrastructure and equipment to become carbon neutral by 2030. The investments reflect plans to strengthen the waterway’s role in global trade.
Parties interested in the proposed toll structure can participate in the consultation process, as well as a public hearing, planned for 9 am local time on May 20 in Panama City, Panama. In accordance with established rules, the Panama Canal will consider all correspondence received at firstname.lastname@example.org by 4:15 p.m. local time on May 17, as well as comments and opinions presented during the public hearing.
After an evaluation and analysis of the comments received, and once any pertinent changes are incorporated in the proposal, the Cabinet Council of the Republic of Panama is expected to consider officially approving the modifications, which would then be gradually implemented from January 2023 to 2025.
The tolls proposal is available for review at: pancanal.com/en/tolls