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Panama Canal defends toll levels after Maersk Asia – USEC pullout

Article-Panama Canal defends toll levels after Maersk Asia – USEC pullout

Panama Canal defends toll levels after Maersk Asia – USEC pullout
The administrator of the Panama Canal Jorge L. Quijano has defended its pricing structure as “fair”, and said the decision by Maersk Line to switch its Asia – US East Coast services to transiting the Suez Canal would hurt shippers.

Speaking to Seatrade Global last week, Quijano said that Maersk remained a customer of the Panama Canal on other services and the decision on Asia – US East Coast services stemmed more from the line’s need to fill its very large ships.

Maersk Line recently merged its two Asia to US East Coast services via the Panama Canal into a single string using larger vessels transiting via the Suez Canal. Speaking to journalists in Singapore last month Maersk Line ceo Soren Skou said whether lines would return to the expanded canal in 2015 would depend on pricing. He noted the cost of a panamax containership transiting the Panama Canal had increased from $150,000 to $450,000 per transit over the last five years.

“We have a pricing structure that is fair, that is being used by all including them [Maersk]. Yes we have increased the price over time but you have to realise we have like everyone else we have to not only cover our costs but also the value of the Panama Canal,” Quijano said.

“The reasoning behind it [pulling out] I don’t think has to much with the price of the Panama Canal, which is about $110 per teu, the reason for them to pull out is that they have these very large vessels that are coming online and they are very much under utilised and they need to put more cargo on them. So what they are doing is they are putting cargo on a ship that was going through the Panama Canal on a ship that is going to Europe and then goes onto to the East Coast of the United States because they have got a large ship that is half empty,” he reasoned.

However, as a result he said Maersk had transferred the problem onto its shippers who now had an 11 day longer transit time, which they would have to pay for as they now had a longer inventory cycle. “I believe down the road others will see they need their goods in less than 11 days and will be willing to pay a bit more for that.”

With expansion of the Panama Canal due to be completed in mid-2015 allowing vessels of up to 13,200 teu in capacity to transit he expects Maersk Line to return. “We expect with the economies of scale that the new locks will offer we will be able to entice them to come back,” Quijano said.



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