The impact of the ongoing drought on the Panama Canal and global trade is escalating. According to data from the Panama Canal Authority, as of the 13th local time, there were approximately 126 cargo ships waiting to pass near the entrance of the Panama Canal, and the longest queue time may reach 12 days.
The latest auction price for ships’ priority right of passage, also known as the “queue-jumping fee”, set a record of nearly 4 million US dollars, significantly raising the cost of transit cargo transportation.
In order to cope with the backlog of ships, the Panama Canal Authority organized a "queue-jumping" auction for ships that wanted to pass through the canal as soon as possible, allowing them to bid to obtain the qualification to pass through the canal in advance.
In the latest auction in November, in order to obtain priority passage through the Panama Canal, a Japanese energy company paid a "queue-jumping fee" of US$3.975 million (approximately RMB 29 million) for a liquefied petroleum gas carrier. Coupled with hundreds of thousands of dollars in regular transportation fees, the overall cost may have exceeded 30 million yuan.
After paying a huge cost, the ship will pass through the Panama Canal on the 15th.
Public information shows that approximately 26% of the Panama Canal’s annual transportation business involves bulk commodities such as liquefied petroleum gas and liquefied natural gas. The Panama Canal Authority said the highest bidders at auctions usually go to LPG or LNG carriers.
Shipbrokers are predicting record prices at upcoming auctions. Liquefied natural gas is an important energy commodity exported by the United States to all parts of the world, especially Asia.
Due to the high cost of passage and the elusive transit time, more and more U.S. LNG shippers have chosen to sail an extra two weeks and nearly 6,000 nautical miles to go around the Suez Canal or the Cape of Good Hope to Asia. This has also led to insufficient market capacity and freight rates. soared.
