Asian shipper pays record US$5.3 million for Panama Canal access

A South Korean shipping company, SK Gas Ltd, has made history by paying a record US$5.3 million to secure passage through the Panama Canal, according to sources familiar with the matter. This amount surpasses the previous high of US$4.6 million, also paid by a ship carrying a South Korean vessel, earlier in the month. The auction, conducted by the Panama Canal Authority, determined the new record-breaking fee.

The surge in demand for canal access is attributed to the geopolitical tensions following the Iran war, which have disrupted global trade routes, especially for shipments heading to Asia. As a result, waiting times at the canal can extend up to 11 days for vessels without reservations. In response, the canal authority has imposed stricter regulations, limiting the number of slots available and the cargo capacity of ships, due to potential drought conditions in the region.

The winning bid grants the G. Spirit, a liquefied petroleum gas tanker, the privilege to navigate the canal moving northwards. The ship was last reported on the Pacific side of the canal as of Tuesday. SK Gas has not yet provided a comment on the matter. The canal authority, however, declined to offer any comment on the record-high auction price.

The authority stated that most ships utilize a reservation booking system, and recent auction outcomes indicate a significantly higher demand, with prices exceeding the median auction price paid before February, which averaged around US$55,000. El Nino, a weather pattern brewing in the Pacific, is further driving shippers' eagerness to pay for canal reservations, as it could trigger severe drought conditions in Panama, potentially jeopardizing freshwater levels and shipping availability in the area.