What canal toll plan means to shipping, rail and trucking
Proposed changes to the Panama Canal transit tolls would provide further incentives for container ships and hike prices for other vessel types.
The consequences could ripple beyond ocean shipping the more container lines are convinced to bring Asian exports to the U.S. East Coast via the Panama Canal instead of unloading in California, the worse for intermodal rail and the better for trucking.
The Panama Canal Authority (ACP) is proposing toll changes to be effective January 1, 2020. It announced its preferred changes on June 14, with a public comment period to extend until July 15, after which a decision will be finalized.
Panama Canal locks cater to two different vessel sizes. The original Panamax locks can handle container ships up to a maximum capacity of around 4,500 twenty-foot equivalent units (TEU), as well as smaller and medium-sized dry and liquid bulk ships.
The Neopanamax locks, which debuted in June 2016, allow for container ships with capacities of up to around 15,000 TEU, as well as liquefied natural gas (LNG) carriers, and 84,000 cubic meter very large gas carriers (VLGCs), which transport liquefied petroleum gas (LPG).
One of the rationales for building the Neopanamax locks was that the use of much larger container ships would significantly reduce carriers unit costs, which would theoretically sway them to shift more of their Asia-U.S. volumes to the East Coast via the Panama Canal, as opposed to Los Angeles/Long Beach.
The latest toll proposal k....