Panama Canal transit auction bids skyrocket

Auctions by the Panama Canal Authority for spot transits enable owners that do not have reservations to skip the queue, but with transits of the waterway limited to 32 per day bids have soared recently.

Speaking on the Avance Gas’ second quarter earnings call last week CEO Øystein Kalleklev said that winning bids had gone up rapidly passing $1 million earlier in August, then passing $2 million, and two weeks ago an owner paid $2.4 million for a winning bid.

“And when you add the regular fee, you're getting close to $3 million to get your ship through the canal. And then, of course, you would have saved a lot of money going through Suez or Cape of Good Hope instead,” he said.

For a gas shipowner such as Avance if waiting time at the canal suddenly rises a vessel could fail to reach port in time on the US East Coast and the owner will lose the cargo that was destined for the ship.

The voyage from US East Coast – China via the canal is around 10,500 nm, while sailing via the Suez Canal is 14,500 nm. If an owner decides to sail via the Cape of Good Hope the voyage length increases to 15,800 nm.