The Panama Canal will not raise tolls, even though its primary competitor, the Suez Canal, decided it will slash fees by more than half.
The Panama Canal will not raise tolls despite its primary competitor, the Suez Canal, reportedly slashing its fees by more than half, according to Jorge Luis Quijano, chief executive officer of the Panama Canal Authority (ACP).
On June 26, the Central American waterway way opened its expanded third lane to commercial vessel traffic, accommodating containerships up to 14,000 TEUs, nearly three times the previous limit of 5,000 TEUs.
The Suez Canal, however, can accommodate the largest containerships currently on the water, the up to 22,500-TEU behemoths deployed on trade between Asia and Europe. Ships on the return voyage from the United States East Coast to Asia are beginning to use the Suez because of deep price cuts, Quijano recently told reporters with news outlet Agencia EFE.
“When we were about to launch our expansion, Suez began with a 35 percent discount. Later, they raised the discount to 50 percent and the latest is they’ve lowered prices by as much as 65 percent,” he said.
“We’re not going to enter a price war.”
Since the expansion’s inauguration, 165 ships have traveled through the new locks, paying close to $80 million in tolls, said Quijano, although he admitted that the Panama Canal loses an estimated $600,000 on average for every containership that transits the Suez instead.
The Cabinet Council of the Republic of Panama in May officially approved an ACP proposal to modify the Panama Canal’s toll structure in advance of the opening and Quijano indicated the authority has no plans presently to either lower or raise those fees in response.
According to ocean carrier schedule and capacity database BlueWater Reporting, lines deploy a total of 94,250 TEUs of capacity per week on 14 services that transit the Panama Canal between Asia and North America, compared with 105,892 weekly TEUs on 12 services via the Suez.
Two of those loops, the 2M Alliance’s TP12/Empire and the CKYHE Alliance’s AUE, on which MOL and the former CSCL also purchase space, pass through both the Panama and Suez canals in round-the-world rotations, eastbound for the TP12/Empire and westbound for the AUE.
Quijano: Panama Canal won’t engage in ‘price war’ with Suez
