Latest News

Bids for the Panama Canal Transit Auction exceed $1 million as demand soars

The authority of the Panama Canal?said that some vessels paid more than $1,000,000 at an 'auction' to secure transit slots. They cited a shift in global trade demand and supply.

Panama Canal Authority (ACP), said that the high bids are due to temporary fluctuations in the market, and not an increase in tariffs set by the waterway. According to the authority, while median auction prices between October and January averaged around $55,000, high demand in recent months has driven median prices up by three times. The?ACP stated that "Auction prices?are determined by a number of factors, such as each client's commercial priorities and urgency, as well as the overall supply and demand conditions." The canal will limit daily transits to 34 vessels beginning Sept. 4 and then tighten the limit on Sept. 15 to 32. The Panama Canal is a gravity-fed system that relies on the freshwater of the Gatun Lake and Alajuela Lake. El Nino has reduced the seasonal rainfall required to refill?these reservoirs. This has forced?the authority? to restrict traffic. Some shippers are rerouting their ships around Africa's Cape?of Good Hope to avoid delays and high auction fees. In August, roughly half of U.S. LNG carriers headed for Asia took the Cape route. This extended a typical journey from Houston to Japan by 45 days. Reporting by Elida Moroe and Marianna Paraga, Writing by Natalia Siniawski and Editing by Inigo Alexandra

(source: Reuters)