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Sunday, April 21 2019 @ 06:09 PM UTC

JSA Expresses Concern On Panama Canal's Proposed Hike In Toll

Canal Daily OperationBy EDU LOPEZ - MANILA, Philippines – The Japanese Shipowners’ Association (JSA) has expressed concern over the proposed increase in tolls announced by the Panama Canal Authority (ACP) early this year. JSA stressed that the toll increases were disproportionate even when the cost of canal expansion is brought into the equation. It understands that many comments by other parties expressed similar concerns to the ACP, which has revised its proposal for the classification of ship types, and delayed the introduction of the new toll regime by three months.

Although JSA appreciates this action, it is very marginal and does very little to obviate the cost penalties to the shipping industry which will apply if the ACP plans are implemented in their present form, especially under the current circumstance where shipping companies were beset by operating losses during the adverse economic environment of 2011, that exceeded $6 billion.

JSA noted that Panama Canal’s toll increases for 5 years from 2006 to 2011t already took sizable increase; for container vessel by 63.6% (10.4% per year), similarly, tanker tolls up by 51 %(8.6% p.a.), where both dry bulk and car carriers tolls increased by 46.5 & 46.3% (7.9% p.a) with proposed increases in 2012 & 2013 to apply on top of those earlier increases.

JSA is deeply disappointed with this outcome, because it does not respond in any shape or form to its previous requests which were that the Panama Canal Authority to withdraw its proposal for toll increases in 2012 and 2013.

Panama Canal should review the current consultation process in favor of a sufficient consultative dialogue that establishes toll adjustment guidelines that are stable, reasonable and transparent over an agreed longer and mutually-agreed upon period of time.

Under the “Proposals for the Expansion of the Panama Canal,” the canal expansion costs could be recovered within several years after the expansion work is complete, and our study indicates that it can be possible without such extensive and frequent toll increases, said JSA.

The Panama Canal’s current pricing policy of constantly increasing tolls imposes an unduly excessive burden on canal users, said JSA.

JSA urges the Panama Canal Authority to rescind the revised proposal, and hold a substantial consultative dialogue with maritime representatives on long-term pricing guidelines, with the aim of making them stable, reasonable and transparent.

Although there is a substantial distance between JSA’s position and that of Panama Canal regarding the toll issue, JSA sincerely believes, on the other hand, that such mutual and constructive consultations could establish a win-win relationship between both Panama Canal and Canal users, whereby such constructive dialogue could also address an issue of increasing the efficiency of the Canal’s operation.

JSA stressed that it is ready to contribute actions for enhancing a more efficient operation of the Canal through closer dialogue, which could lead to increasing the long-term value of the Canal and the number of transiting vessels with stable Canal tolls.

“Our request to hold closer dialogue would also present a positive answer to concerns of the Japanese government, which filed its comments in May 2012 urging the Panama Canal to take into account the Canal users’ opinions and also took up the issues at several inter-government meetings where the same concerns were shared among the maritime administrations of the relevant countries,” said JSA.

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