Shipper pays $2.4 million to bypass Panama Canal queue

Shippers who want to move their goods through the drought-impacted Panama Canal will need to pay record fees to overcome the backlog of ships waiting. Avance Gas Holding Ltd. recently paid $2.4 million on top of the standard transit fee of $400,000 to secure a faster slot for their carrier. The canal has seen a growing queue of ships as the drought limits the amount of available water to fill the locks. This has resulted in fewer ships passing through and carrying less cargo, causing a significant backlog.

To address the waiting time issue, the Panama Canal Authority holds auctions where shippers can bid for faster passage. However, this comes at an immense cost, with fees reaching nearly $3 million, according to Oystein Kalleklev, the CEO of Avance Gas. The record fee paid by the company was to secure the passage of a liquid natural gas tanker. The Panama Canal Authority has not yet commented on the situation.

The Panama Canal handles over half a billion tons of cargo annually, making it a crucial trade route. However, the current backlog and high fees may impact global trade and supply chains, as shippers seek alternative routes or face delays and higher costs.

Source .