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Talks are due to start next week between the Panama Canal Authority (ACP) and the international shipping community on the prickly subject of paying for a widened waterway when it opens in 2015.

Panama Canal Authority administrator, Jorge Quijano, told The Loadstar that he would arrive in London next week to meet with the International Chamber of Shipping (ICS) as part of the ACP’s policy of consultation with the industry ahead of any future toll increases.

At the centre of discussions will be the issue of tolls post-2015, when the ACP is scheduled to finish its $5.25bn expansion programme.

A key element of the ACP’s future pricing strategy, Quijano revealed, would be a price differential between using the new mega-locks – capable of handling 13,000 teu vessels – and the cost of using the original locks, constructed nearly a hundred years ago.

Price differentiation would be necessary, he said, to ensure the canal’s original facilities continue to be attractive to operators of smaller vessels and to prevent older infrastructure becoming obsolete overnight.

“We would have to [differentiate] otherwise everyone will just want to use the new locks. At the end of the day somebody has to pay for this,” he said.

ICS secretary general Peter Hinchcliffe told The Loadstar that carriers were not just concerned about the cost structure, but also how the ACP would manage a two-stream canal capability and how slots would be allocated on the expanded corridor.

“We welcome the ACP’s readiness to engage the industry in consultation talks and their willingness to discuss the future toll structure, and hope that what comes out of the talks is reflected not only in pricing, but also in the operation of the enhanced canal,” he said.

The new locks will offer slot cost savings of up to 17% for carriers moving from 4,500 teu to 8,000 teu vessels on the principal route between Asia and ports on the US east coast, while the savings are even greater for those ready to deploy bigger tonnage on the route.

Quijano told delegates at this week’s TOC Americas event that he was optimistic that a new widened waterway would be ready to open the gates to new capacity on more than 140 global trade lanes by ‘mid-2015’.

“We have finished 50% of the programme. By late 2013 we hope to have finished the dredging,” said Quijano. “We expect to start filling the locks in the last quarter of 2014 and hopefully they could be in commercial service by 2015, around mid-2015.”

He said the ACP was still ‘tracking demand’ but it is optimistic that the new locks would receive as many as nine transits a day from post-Panamax vessels.

“Originally we would have said we would expect four transits a day but it looks like it will be higher than that. If we begin operations with more than six vessels we would be very, very happy but we are more optimistic that it will be eight-to-nine vessels a day,” he said.

The new locks will have capacity to handle as many as 14 mega vessels a day, but the ACP expects clients to begin with vessels between 8,000 and 10,000 teu on the Asia-US east coast trade.

At current toll rates of $74 per teu, a 12,000 teu vessel moving via the waterway would pay $888,000 in tolls plus additional costs to use the Canal’s reservation system. Tugs will be used to assist mega vessels transiting the new locks, a service that is currently charged on top of tolls, which makes it likely that the biggest ships will spend more than $1m each to transit the waterway.

The ICS has been critical of toll increases introduced by the ACP during tough times for the shipping industry, and has previously expressed concern that consultation meetings have not had the desired impact on pricing structures.

The Canal’s largest user, Maersk Line, with more than 400 transits a year, is following developments closely.

Robbert Jan van Trooijen, Maersk Line’s chief executive for Latin America and the Caribbean, told The Loadstar that every element of the supply chain needed to try and keep costs down for shippers.

“Expansion has to be paid for,” he said. “It’s up to the canal to remain competitive. There is competition in terms of the Suez Canal, but you could say from our point today that we need every point in the chain to get more competitive. At the end of the day we need to serve our customers and we need to be competitive.”

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  • Similo

    January 31, 2013 at 1:11 pm

    This sounds interesting for the economic point of view, as most countries will benefit out of this project. I would love to follow developments that leads to expansion.