Shippers are paying up to $2.4 million per vessel if they want to beat a logjam of carriers waiting to sail through the drought-affected Panama Canal, according to one company active in the market.
The high payment - in addition to a standard transit fee of around $400,000 - was made recently by one unnamed party in order to get a slot allowing its carrier to transit the waterway more quickly, shipping company Avance Gas Holding Ltd. said in its earnings report this week.
The Panama Canal Authority, which holds auctions for those wishing to queue jump, said in an email Thursday that the fees haven't reached a new high this year, without providing further details. The authority said the highest bids are typically won by carriers transporting liquefied petroleum gas or liquefied natural gas.
A queue of ships waiting to use the canal has been growing in recent months as drought means there's less water to fill the waterway's locks. That has led to fewer vessels transiting while also carrying less cargo. The canal typically handles more than half a billion tons of cargo annually.
"You can skip the queue but it's immensely costly," Oystein Kalleklev, Avance Gas's chief executive officer, said in an earnings call. "It's gone rapidly up. When you add the regular fee you're getting close to $3 million to get your ships through."
Fees at auction went up to $2 million last November, according to the canal authority. Available slots are offered on a daily basis for various vessel types and sizes, the authority said in an email. Due to traffic restrictions, some slots are not offered to LNG carriers or are limited to a specific transit direction.
A total of 13 LNG cargoes from the US crossed either the Panama Canal, Suez Canal or the Cape of Good Hope in the week of Aug. 21 to Aug. 27, the most since 2022, according to BloombergNEF.
