Shippers are having to pay record amounts if they want their carriers to beat a logjam of vessels waiting to cross the drought-affected Panama Canal.
One recently paid $2.4 million — in addition to a standard transit fee of around $400,000 — in order to get a slot allow its carrier to traverse the waterway faster, shipping company Avance Gas Holding Ltd. said in its earnings this week.
A queue of ships has been growing in recent months as drought means there’s less water to fill the canal’s locks. That’s led to fewer vessels transiting and them carrying less cargo — all of which has added to a backlog at a waterway handling over half a billion tons of cargo annually.
For those wishing to queue jump, the Panama Canal Authority holds auctions.
“You can skip the queue but its immensely costly,” said Oystein Kalleklev, Avance Gas’s chief executive officer. “It’s gone rapidly up. When you add the regular fee you’re getting close to $3 million to get your ships through.”
The fee is a record high and was to allow the passage of a liquefied petroleum gas carrier, according to data on slot auctions seen by Bloomberg. The Panama Canal Authority didn’t immediately comment.