Panama Canal’s Simplified Tolls Structure Approved by Panama’s Cabinet Council

Photo courtesy of the Panama Canal Authority.

The Cabinet Council of the Republic of Panama has approved the tolls structure recommended by the Panama Canal Board of Directors, following a formal consultation and public hearing process that considered industry feedback.

With this approval, the Panama Canal will assume a simplified, value-based pricing structure, reducing the number of tariffs from 430 to fewer than 60.

“The proposal aims to strengthen the tolls structure in a way that is consistent with the value provided by the Canal transit service while providing greater visibility and predictability to customers,” said Panama Canal Administrator Ricaurte Vásquez Morales.

The tolls proposal was issued on April 1, 2022, and went through a formal consultation period during which 17 interested parties submitted their comments or opinions in writing.  The public hearing was held in Panama on May 20, 2022, with the participation of seven parties, representing local and international customers.

During this process, customers recognized the Canal’s efforts to promote global trade, especially during the COVID-19 pandemic and welcomed the simplification of tolls. Ensuring that customers’ feedback from the open and transparent dialogue was considered, the structure was modified to incorporate the following changes to the original proposal:

• Transits of vessels in ballast condition: For all market segments except for containerships, tolls will be calculated by applying 85% of the laden toll instead of the originally proposed 90%.
• Passenger vessels segment: The proposed tolls for the year 2023 will not be implemented, considering the challenges still being faced by the cruise industry. Instead, the new tolls will go into effect in January 2024 and January 2025 at the levels established in the original proposal for those years, providing the industry with a two-year advanced notice.
• Containership segment: The charge for empty containers ("TTE") will be reduced to $2/TEU in 2023, $4/TEU in 2024, and $6/TEU in 2025, instead of the $5, $6.50, and $8 that were initially proposed for each year, respectively.

All other tariffs will be implemented gradually from January 2023 to January 2025 at the originally proposed levels, including the proposed modifications to the loyalty program for containerships, which will be phased out by January 2025. Incentives for return voyages applicable to containerships and liquefied natural gas ("LNG") vessels will be eliminated by January 2023 when the new structure comes into effect.

The visibility charge currently applied to full container vessels, and classified as Other Marine Services, will be eliminated prior to the implementation of the new tolls to avoid an overlap with the Total TEU capacity (“TTA”) charge.

During the process, customers also expressed their interest in obtaining incentives for using the waterway. For this reason, the Canal administration will be reaching out to representatives of various market segments in the coming months to explore mutually beneficial alternatives that could result in long-term commitments for cargo deployment.

For specific information about the newly approved toll structure, please visit the Panama Canal’s website: pancanal.com/en/tolls/.