May 28 - Plans to increase toll charges for the Panama Canal are 'rushed, excessive and likely to cause further problems for shipping companies' given the fragile state of economic recovery, say shipowners.
The International Chamber of Shipping (ICS) has sent a strongly worded letter to the Panama Canal Authority(ACP) describing plans to increase tolls by up to 15 percent as 'simply unacceptable'.
ICS calls for the plans to be withdrawn and for future increases to be given with at least six months' notice to enable shipping companies to plan properly and fully assess the impact of the proposed changes.
The ICS is the principal international trade association for shipowners, with member national associations from 36 countries representing all sectors and trades and over 80 percent of the world merchant fleet.
The ACP published plans to increase its tolls last month, despite assuring industry clients in January there would only be one small adjustment to tolls before completion of the expansion project in 2014. Toll increases could come into effect as early as 1 July if agreed at a public hearing at the end of this month.
ICS secretary general, Peter Hinchliffe, said there was 'no pressing need' for the increases given that 'canal revenues are currently very healthy'.
Hinchliffe pointed out that while the Panama Canal is an important national asset to Panama, it also remains an essential part of international public infrastructure crucial to the smooth operation of the global supply chain and should 'take this important public role into account when setting tolls'.
"While the ACP proposal analyses the impact of the toll rises on the competitiveness of commodity trades, no account is taken of the impact on shipping companies themselves…..many of whom are still forced to run ships at a loss in order to remain in the market," he said.
"We therefore request that the ACP rescind the current plans for increases in the next two years and concentrate on developing a toll structure that can be to the benefit of all parties to be introduced in late 2014."
The ICS statement followed the public hearing of the ACP on May 23, in Balboa, Panama, on its proposal to modify the Panama Canal pricing structure to align Canal toll charges with the value the route provides. Seven representatives from shipping and government participated in this opportunity to express their views.
Throughout the consultation period (April 20, 2012 - May 21, 2012), the proposal was made available to all interested parties. The ACP received a total of 18 comments, opinions and written requests from interested parties to participate in the public hearing.
As previously reported, the proposal increases the number of segments from eight to eleven by Panama Canal vessel type. It also breaks down the tanker segment into three distinct segments, establishes a new segment for container/breakbulk, and incorporates the roll-on/roll-off vessels into the vehicle carrier segment. Once approved, the Panama Canal market segmentation scheme will include the following segments: full container, reefer, dry bulk, passenger, vehicle carrier and ro-ro, container/breakbulk, tanker, chemical tanker, LPG, general cargo and others.
The ACP made it clear that from July 1, 2012, it proposes to increase the tolls for the following segments: general cargo, container/break bulk, dry bulk, tanker, chemical tanker, LPG, vehicle carrier and ro-ro, and the segment known as others. The remaining segments - container, reefer and passenger - will not be adjusted at this time, nor will the price per teu for containers carried onboard a vessel. Additionally, there will be changes to tolls applicable to small vessels based on vessel length, to incorporate adjustments not previously considered.
"This proposal continues to align the Panama Canal tolls to the value, benefit and quality the route provides, and maintains the competitiveness of the Panama Canal", claims ACP administrator/CEO, Alberto Alemán Zubieta.