Panama Canal: modification to the Fresh Water Surcharge

Panama Canal Authority on 25 September 2023 announced a modification to the variable component of the Fresh Water Surcharge effective October 1, 2023, due to a critical shortage of fresh water in the Panama Canal watershed.

The change involves shifting the Gatun Lake level center from 82 feet to 79 feet, allowing vessels transiting the Neopanamax locks to have a maximum draft of 44 feet (Tropical Fresh Water- TFW), while leaving the maximum draft for vessels in the Panamax locks unaffected.

This adjustment to 79 feet and the 44-foot draft aims to conserve water resources and ensure continued traffic flow in the upcoming months.

The resulting percentage, calculated using the formula: f(x) = 0.10 / 1+e^0.6(x-79), will range from 0% to 10%.

This percentage will be applied to a vessel's total tolls, encompassing both fixed and variable toll components if applicable.

The percentage applied to each vessel will directly correspond to the Gatun Lake level, calculated daily based on the lake's level at 1200 hours on the day before the vessel's transit.

This adjustment provides financial relief to customers during this critical period, as the 44-foot maximum draft reduces cargo capacity compared to previous allowances at the Panama Canal.

The charges for the fixed component of the Fresh Water Surcharge (FWS) will remain unchanged until further notice.

For more information, please see the document below (available only to subscribers):