Shipping companies have collectively invested $235 million this year to bypass the congestion at the Panama Canal, marking a 20% increase compared to last year’s fees, as reported by shipping agency Waypoint Port Services Ltd. The Panama Canal Authority, facing severe drought from El Niño, has announced plans to limit access through February 2024 to conserve water. This has intensified the competition among shippers eager to expedite their passage through the canal.
Transport companies are already paying record-high fees to prioritize their shipments, with the fees determined through auctions conducted by the canal agency. The auction proceeds for this year alone are sufficient to offset a projected revenue shortfall of $200 million resulting from reduced canal slots, according to estimates by financial services firm ING Groep NV. It’s worth noting that auction fees are in addition to the standard tolls required for canal passage.
A Panama Canal spokesperson stated that auctions offer an alternative for customers without reservations, and prices are influenced by market dynamics. However, it remains too early to predict the long-term impact of these auctions on canal revenues.
Francisco Torné, Panama Country Manager for Waypoint, expressed uncertainty about the ultimate outcome, given the substantial amounts being paid in the auctions and the willingness of customers to invest. The situation underscores the challenges faced by shippers in navigating the evolving dynamics and costs associated with Panama Canal congestion.
