Proposed cost increase to transit Panama Canal

[waterman46]

I have always thought it was just plain stupid to give away that valuable asset which was built with our father's money. If it was still in US control, we small boat users might have a chance to appeal and get lower rates. Good Luck with asking Panama to base fees on actual cost to float our little chips of wood and glass through their big canal.

[Cayuse51]

It has always been a real bargain for sailboats. $1,600 seems reasonable not to have to sail around Cape Horn to reach the South Pacific. We went through last year at the lower fee with 8 other sailboats, each with one advisor onboard. The canal zone made about $7,200 and had to operate the locks and pay 9 advisors. They could have run a large ship through at 10 times the fee and one or two advisors. We are lucky we don't have to pay the actual cost of the transit or they could just close the canal to small boats and make all sailboats go through on the back of a ship.

[Moontide]

Those who posted current cost info are not totally accurate.



Last did the canal in January 2016. Fees were 800 plus 800 deposit which was refunded directly to our account within a week since we didn't damage the canal, and didn't miss our locking appointment. Other costs included renting lines and fenders which was little under 100. Lots of volunteers to fill line handlers slots. We had friends fly down who wanted to do the trip but can also trade off line handling with other cruisers or from a website that has people who want to do it.


Did have to go onshore to post the fee and deposit so had some cab fees. Now you can do it with credit card so you really never have to get off the boat.


For clarification, boats have advisors who only advise. They are not professional pilots. They are not in control of your boat. Most are doing this moonlighting from other jobs to earn a couple of extra bucks.



Ships have pilots,who are professionals and are in charge of the ship.



Assuming boats still only go through with ships they are nueteal on water usage. When up locking they do use times their displacemwnt/volume and downloading they save the sqmeamount. Their displacement eliminates the water that would have filled that space. If they start doing boats by themselves then more water would be used.


My guess is someone there said "here's a group with no lobby" so why not raise fees.



Notwithstanding all this it would still be a bargain compared to going around the horn, and a lot more comfortable.



Bill

[DeepFrz]

Originally Posted by moctrams

I thought the water goes into a holding pond for the net cycle.

"Each time a ship transits the canal about 50 million gallons of fresh water are lost through the locks to the oceans".

[Montanan]

FYI.

The Panamanians have done an excellent job of running and improving the canal and the corporation has made it a solid profit making enterprise to the benefit of the country, something the US failed to do.
NYU Stern January 1, 2018:
"After 85 years of United States ownership and control, the Panama Canal was handed over to the Panamanian government in 1999 under the Torrijos-Carter Treaties (“Torrijos”). The change in ownership presented an opportunity for Panama to profit from the canal's existence, something that had not happened during the years it was under US control even though the canal was on Panamanian soil. The handover resulted in several key changes to how the canal was managed. First, while the United States ran the canal as a public utility keeping tolls low to minimize shipping rates, Panama ran the canal as a profit maximizing business, raising the rates it charged to shippers. Second, unlike the US, Panama made sure the canal was properly staffed and managed, leading to more successful operations at the canal. Lastly, Panama turned the canal region from a military zone to a commercialized area, creating further opportunities for the country to profit from the region. These changes increased profitability of the canal considerably, making Panama the second wealthiest Latin American country in GDP terms "

By way of reference to the current rate structure:
Small (less than 125 ft) vessels up to 583 PC/UMS net tons when carrying passengers or cargo, or up to 735 PC/UMS net tons when in ballast, or up to 1,048 fully loaded displacement tons, are assessed minimum tolls based upon their length overall, according to the following table (as of 29 April 2015): Reference image below.

Snipets from the Fiscal Year 2018 Annual Report of the Panama Canal Authority (ACP):

The Financial Profitability and Value Creation Indicators Pick Up

Fiscal year 2018 ended with a robust financial standing for the Canal, as evidenced by the main financial indicators of profitability, liquidity, indebtness and value creation. The performance in financial management is a reflection of the institutional autonomy of the Canal, supported by the Constitution that offers a solid legal and governance framework.
The Canal closed fiscal year 2018 with increased business profitability since the inauguration of the Expanded Canal.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) were B/.1.586 billion, which reflects a compound annual growth rate of 11 percent. The operating margin was 44.4 percent, the return on sales (ROS) 42.7 percent, the return on assets (ROA) 9.9 percent, and the return on equity (ROE) 13.4 percent, all surpassing the results of fiscal year
2017.

Growth in direct contributions to the National Treasury

Fiscal Year 2018: The direct contributions to the National Treasury reached the record high of B/.1.703 billion, which is B/.44 million above the estimated B/.1.659 billion for the fiscal year, and B/.53 million or 3.2 percent more than fiscal year 2017. This figure includes surplus payments of B/.1.199 billion, and per net ton and public services fees of B/.504 million.

Contributions to the National Treasury have grown 30 percent between 2016 and 2018.

The direct contributions to the National Treasury for each basic man-years indicator increased B/.7,000 per basic manyear, 4 percent more than fiscal year 2017. This trend is in line with the growth in direct contributions to the National Treasury, and with higher productivity by basic man-year since the inauguration of the Expanded Canal.

[Montanan]

Originally Posted by DeepFrz

"Each time a ship transits the canal about 50 million gallons of fresh water are lost through the locks to the oceans".

If water resources become scarce, they could install very large pumps to return water up lock instead of gravity flowing towards the ocean. It would require additional infrastructural investment and electricity but recycling the flow would not be a major engineering challenge and they could raise the transit fees to cover such modest increase in operating costs and to attain a reasonable return on the investment in line with their existing return on capital targets.

[Scaramanga F25]

Hiway 9 from Colon to Panama City, Panama is only 60 miles long.
Two cranes two trucks. Four boats per day $4,000 including pressure wash...
!.2 M $ per annum.

Business opportunity...

[Paul L]

Some of the comments here about the Canal and its transit costs are way off mark. Including costs of line handlers, agents, immigration, etc is just padding. There is no need to use an agent, line handlers are easy to get from fellow cruisers, if you have your own large fenders and lines you are welcome to use them instead of renting, immigration fees apply to the country and have nothing to do with the Canal Authority,
Handline vessels are run through the Canal at most likely a loss. On one of my transits I counted the number of Canal employees who were directly involved. It was dozens over two days.
Not allowing handline vessels would simplify the Canal operation significantly. It would be pretty easy for the Canal to require small vessels to be transported across the peninsular via train. Personally I'd far prefer to use the locks. It's a great experience.
It's unfortunate that the price is likely going up to us$1,600, but it is still a great deal financially.

[model 10]

It's going to cut into the local business too. It's not that hard to do everything yourself and leave out the locals. As it is, it's often more simple to hire an agent.

[Paul L]

Originally Posted by Ecos

It's going to cut into the local business too. It's not that hard to do everything yourself and leave out the locals. As it is, it's often more simple to hire an agent.

So if it's more simple and you want to pay for it, fine. Just don't be one of the complainers on this post that say it's too expensive when they could have easily done the work themselves and actually interacted with the easy to work with Canal employees.

[txg]

Panama Canal fees were insane before the increase and now they will get even more insane.



The German Kiel Canal is a comparable waterway to the Panama Canal (i've done both), or actually it's a little bit longer and there are more ships going through. Anyways, there are locks on both ends as well.



In the Kiel Canal you simply go in whenever you want (as long as it allows for a daylight passage and there is space in the lock), pay your fee of less than 20$ for a 40-footer and transit the canal. No measurements, no transit dates weeks up front, no stupid advisors that sometimes have no idea what they are talking about). Simply go there and transit the Canal.



We spent a lot of time in Panama and in general it's a great country with great people except for the "official" stuff. Several bad experiences there, on water as well as on land.

[Montanan]

Originally Posted by txg

Panama Canal fees were insane before the increase and now they will get even more insane.



The German Kiel Canal is a comparable waterway to the Panama Canal (i've done both), or actually it's a little bit longer and there are more ships going through. Anyways, there are locks on both ends as well.



In the Kiel Canal you simply go in whenever you want (as long as it allows for a daylight passage and there is space in the lock), pay your fee of less than 20$ for a 40-footer and transit the canal. No measurements, no transit dates weeks up front, no stupid advisors that sometimes have no idea what they are talking about). Simply go there and transit the Canal.

There is nothing insane about operating their corporation for profit to benefit the country. All very business like actually. You seem to perceive it is run as a not for profit public service, which it decidedly is not. The Panama canal for 2018 realized: the return on assets (ROA) 9.9 percent, and the return on equity (ROE) 13.4 percent.

One can always take the long way around by Cape Horn as the alternative.

[Franziska]

Wonder what the impact of the, now stopped, Nicaragua canal project would have been.

Guess competition would have been strong between the two ca als...

[Paul L]

Originally Posted by Montanan

There is nothing insane about operating their corporation for profit to benefit the country. All very business like actually. You seem to perceive it is run as a not for profit public service, which it decidedly is not. The Panama canal for 2018 realized: the return on assets (ROA) 9.9 percent, and the return on equity (ROE) 13.4 percent.

One can always take the long way around by Cape Horn as the alternative.

Maybe the government should cut back on the Panamanian health system that covers the countries poor and middle class to reduce the costs for the poor, hard done by, world cruisers who want to take the short cut from the Atlantic to the Pacific.😥

[Joe Abbott]

Originally Posted by capt.rob

Do you have the link for the public comment?

If you and other fellow cruisers are concerned, the best option available is to submit your comments by email to them at customerelations@pancanal.com by 15 July 2019.

It is hoped that many will take the initiative and submit a comment, as it takes very little effort and time.


From SSCA post:


Is a 𝗣𝗮𝗻𝗮𝗺𝗮 𝗖𝗮𝗻𝗮𝗹 𝘁𝗿𝗮𝗻𝘀𝗶𝘁 in your bucket list of things to see, do, and accomplish?


Well the new Panama Canal Authorities proposal essentially doubles the rates for most pleasure yachts.



Read the announcement at: http://www.pancanal.com/common/maritime/advisories/2019/a-22-2019.pdf


Get a copy of proposal at: https://tolls.panama-canal.com/pdf/Tolls-Proposal-FY2020.pdf


If you want to possibly influence the decision, formulate your comments and rationale and email them to: customerelations@pancanal.com – there is a time limit to submit of 4:15 p.m. (local time) on July 15, 2019.