Shipowners Association Requests 6-Month Suspension of Panama Canal Surcharge Implementation

"New Surcharge Plan to Increase Passage Fee Burden by 10%"

Panama Canal (Source: Panama Canal Authority)

[Asia Economy Reporter Yu Je-hoon] The Korea Shipowners' Association announced on the 19th that it met with Natanasio Kosmas Sifakis, the Ambassador of Panama to Korea, along with the Ministry of Oceans and Fisheries on the 13th, requesting a six-month postponement of the implementation of the Panama Canal surcharge.

Earlier, on the 13th of last month, the Panama Canal Authority announced that it would impose a water level surcharge starting from the 15th without separate consultations with shipping companies. This decision was based on the need for additional dam construction due to last year's rainfall amounting to 2100mm, which is below the annual average rainfall of 2600mm, caused by global warming.

The Shipowners' Association estimates that the annual Panama Canal transit fees for seven domestic shipping companies currently amount to approximately 150 million USD (about 178.6 billion KRW). If the surcharge is introduced, transit fees are expected to increase by more than 10% annually.

Through the meeting, the Shipowners' Association and the Ministry of Oceans and Fisheries urged, "Notifying the surcharge unilaterally without gathering users' opinions and implementing it just one month later poses procedural issues," and emphasized, "It is necessary to implement it with at least a six-month grace period."

Additionally, the association conveyed in a letter to the Panama Canal Authority that "due to the global shipping recession, low-sulfur fuel regulations, and the COVID-19 pandemic, maritime cargo volumes have sharply declined, with various shipping indicators hitting record lows daily," and requested, "Considering these conditions, please postpone the application of the surcharge."

Meanwhile, according to the Shipowners' Association, international shipping organizations such as ICS, ECSA, and ASA have also jointly requested the Panama Canal Authority to postpone the introduction of the surcharge by six months.