Tuesday 22 June 2021

Panama Canal imposes “freshwater” charge

Shipping industry faces US$370 dollar million hit from new Panama Canal charge

(Reuters) – A new “freshwater” charge introduced this month to help the Panama Canal cope with climate change will cost the shipping industry up to US$370 million a year, marking another blow for maritime companies already hit by fallout from the coronavirus outbreak.

Photo REUTERS/Carlos Jasso/

The Panama Canal, one of world’s busiest shipping routes which handled nearly 14,000 transits last year, said last month it would introduce a charge from Feb. 15 of $10,000 for any vessel more than 125 feet long.

- Advertisement -

The canal, which relies on water from nearby Gatun Lake, has been hit by drought which affects water levels in the chokepoint. The Panama Canal authority said it would bring in a variable surcharge based on the level of Gatun Lake to ensure the canal has enough water.

The authority said the charges were a consequence of a lack of rainfall and this was a short-term measure needed to tackle the impact of climate change.

The International Chamber of Shipping (ICS), which represents more than 80% of the global merchant fleet, said on Thursday it was surprised by the charge after working with the canal authority on a separate increase in tolls which is due to come into effect in April.

“The industry is currently facing increased price pressures globally, as demand has been hit hard by the coronavirus and markets are adjusting to the new regulations on sulphur levels,” ICS secretary general Guy Platten said, referring to new rules requiring ships to use cleaner fuel.

- Advertisement -

The coronavirus outbreak has upended supply chains and already disrupted shipping across the world leading to commercial losses for certain types of shipping, including container lines.

The industry is also having to pay billions of dollars in extra fuel costs due to the tough new sulphur emissions rules that started in January.

Platten said the global shipping sector was already operating “on the slimmest of margins”.

“ICS calculates that at current water levels the ‘freshwater charge’ alone could cost global shipping $230 million. In a worst case scenario this could be as high as $370 million per year,” he said.

“Cost hikes in this range, without sufficient warning, places undue pressure on the industry at a sensitive time when we are being asked to invest in a low emissions future,” Platten said. He urged the canal authority “to rethink the hasty introduction”.

The Panama Canal Authority said the measures were in line with water surcharges introduced at ports around the world. In a statement, it said the measure had been explained to customers.

- Advertisement -

“The Panama Canal remains committed to adapt to and mitigate rising environmental challenges, and is confident the new water measures are the best and necessary solution for safeguarding an operational level of water, particularly as Panama heads into its dry season,” the statement said.

“By implementing these measures, the Panama Canal simply aims to ensure that the value of its limited resources is appropriately factored into global supply chains and adapted accordingly,” it said.

A study last month estimated at least US$1 trillion of investment in new fuel technology is needed to enable the shipping industry to meet U.N. targets for cuts in carbon emissions by 2050.

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Related Articles

New Panama Canal Bridge Ready To Begin

Work on the Fourth Bridge over the Panama Canal is set...

The Panama Canal is running out of water

For over 100 years, the Panama Canal has been a staple...

MOST READ

Internet speed decreases during peaks in service

QCOSTARICA - Ever wonder why your surfing on the Internet slows down, to even a crawl, mainly in the evenings? This is due to...

College of Physicians negotiates donation of a million and a half vaccines against covid-19

QCOSTARICA - This week there could be very good news for the country in the fight against the coronavirus pandemic if the College of...

Today’s Vehicle Restriction June 19: only “ODDS” can circulate

Today, Saturday, June 19, only vehicles with "ODD" ending plates CAN circulate The measure is countrywide and applied between 5:00 am and 9:00 pm, save...

Cynthia Ann Telles named new U.S. Ambassador to Costa Rica

QCOSTARICA - Today, U.S. President Joe Biden announced his nomination of Dr. Cynthia Ann Telles as United States ambassador to Costa Rica. According to the...

Week immersed in passage of tropical wave, June Solstice and Veranillo

QCOSTARICA - Today, Monday, June 21, is the day of the year when the sun stays the longest on the horizon, therefore it is...

Today’s Vehicle Restriction June 20: only “EVENS” can circulate

Today, Sunday, June 20, only vehicles with "EVEN" ending plates CAN circulate The measure is countrywide and applied between 5:00 am and 9:00 pm, save...

Immigration system failure affected passengers at the San Jose airport Monday

QCOSTARICA -  In yet another system-wide failure in the immigration check-out, passengers looking to leave Costa Rica Monday morning by way of the Juan...

Will that be Cash or Sinpe Móvil?

QCOSTARICA - Sinpe Móvil is easy to use. From your phone, you can send money to friends, family and pay for things. Or receive...

Today’s Vehicle Restriction June 21: plates ending in 1 & 2 CANNOT circulate

Today, Monday, June 21, we are back to the two plates that cannot circulate, in today's case plates ending in 1 & 2 CANNOT...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.