Panama Canal Taxes

Why are the Panama Canal full transit taxes so high ? :o

Why are the Panama Canal full transit taxes so high ? :o

piece of infrastructure. It costs hundreds of millions of dollars a year to maintain and support it . Cruise ships are charged approximately $300,000.00 a passage. That amount varies based on the size of the ship and passenger capacity.

Transiting the Panama Canal is the cruising equivalent of visiting DisneyWorld. Expenses are significant. But the visit is worth the money.

As to direct taxes, certainly the Republic of Panama should derive benefit from the canal.

Hope this helps

Mike

Rather than rehash the topic, you can read this thread:

http://boards.cruisecritic.com/showthread.php?t=1909987

But the basic answer is because it costs somewhere upwards of $350K for the cruise line to make the transit. That is charged back to the customers in the taxes and fees.

We have done full transits twice & don't remember the taxes ever being over $600 for this cruise:o . We remember under $400 :). Thus ,the question begs are the Panama authorities charging more because of the construction of the new canal ;which opening is now delayed until late in 2015 .

We have done full transits twice & don't remember the taxes ever being over $600 for this cruise:o . We remember under $400 :). Thus ,the question begs are the Panama authorities charging more because of the construction of the new canal ;which opening is now delayed until late in 2015 .

In 2010, the Taxes & Fees were $242/pp. For 2015, the Taxes & Fees are $327/pp. Not that bad considering inflation and the new locks being built.

In 2010, the Taxes & Fees were $242/pp. For 2015, the Taxes & Fees are $327/pp. Not that bad considering inflation and the new locks being built.

That sounds pretty bad to me. A 35% price increase in only 5 years?

And as for the new locks, why is the fact there there will be new locks in the future an advantage to someone traveling through the old locks? Or is your $327 price for a time after the new locks are in service?

That sounds pretty bad to me. A 35% price increase in only 5 years?

 

And as for the new locks, why is the fact there there will be new locks in the future an advantage to someone traveling through the old locks? Or is your $327 price for a time after the new locks are in service?

Greetings

The new locks are significantly over budget. Panama needs additional funds to finish, so they raise the prices charged to transit the canal. You can either pay the price or go around the horn. They have pricing power because there is no good substitute. Celebrity is just paying (and passing on to you) what Panama is charging.

Good Sailing

Tom

The per person fare is worth every penny .. BEST cruise ever :-)

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They have pricing power because there is no good substitute.

Tom

The Northwest Passage will soon be an alternative. I'm interested in the new itinerary that will be released just after the new locks are built.. ;)

The per person fare is worth every penny .. BEST cruise ever :-)

 

 

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I agree! The experience is well worth it. We have done it both Eastbound and Westbound.

Whether you do the full transit Eastbound from the Atlantic/Caribbean to the Pacific, or the full Westbound transit from the Pacific to the Atlantic/Caribbean or the partial transit into Gatun Lake and return to where you started you still have to go through six locks and the fees should be the same.

Thom

We have done full transits twice & don't remember the taxes ever being over $600 for this cruise:o . We remember under $400 :). Thus ,the question begs are the Panama authorities charging more because of the construction of the new canal ;which opening is now delayed until late in 2015 .

Of course they are. How else does a corporate entity raise money for capital improvement. I know that outside the Northeast and Midwest that toll roads are not common, but your tolls not only pay for maintenance of the current road, but for planned upgrades.

As others have posted, when you have a monopoly, you can charge whatever you want. You do know that the cruise ship is charged for every passenger bed, sofa bed, or Pullman bed, whether there is a guest booked in it or not? The transit fee is based on total capacity not current capacity. Basically the same thing holds for cargo ships. The "Panama Canal Tonnage" figure is calculated from the ship's design and used to determine the tax, and whether a container ship or tanker is fully loaded or only has one container or 100 bbls of oil onboard, the "laden" fee is charged.

The Canal charges $134 per passenger berth plus a whole lot of extra fees. It now charges $25,000 to make an advance reservation, so the ship doesn't sit there for hours or days waiting to go through, and $30,000 to guarantee a daylight transit. Since the turnover the Canal has been run as a business, not a break-even service. Cruise ships are a drop in the bucket for the Canal and account for only 8-9% of revenue.

This is a charge for passage, not a tax. For cruise lines to add Canal fees in as taxes is just typical slight of hand to come up with as low of a price point as possible, dump as much into additional fees as possible [calling the call fee a tax, adding fuel surcharges, hotel service fees, etc.] and nickle and diming on board as much as possible.

Yes, Panama does derive benefit from the Canal, as it should. The revenue from the Canal, direct check to the government, is around $900 million now, and will be around $1.25 billion when the expansion is completed. The Panama Canal and tourism are the largest contributors to Panama's GDP, which will be about 8% this year, unfortunately down from the 10-12% per year it has been running. Panama has one of the few booming economies, that, plus the fact that it uses the US dollar which has become worth less every year, the high cost of oil, and the fact that most things, other than basic foodstuffs, have to be imported, means that costs go up. 35% in five years, if that is the correct number, isn't that bad since food has almost doubled in cost in five years.

Regards, Richard

The taxes and port fees that are separate from your cruise fare are just about double for a Canal cruise than what they are for a cruise of equal length to somewhere like the Caribbean. There is a convoluted formula to determine if a passenger ship pays per ton (which is actually a volume measurement and not weight) or per passenger berth. Most of the passenger ships will wind up paying per berth. As noted by the previous poster the ship pays for every bed, sofa, Pullman bed and probably all hammocks as well, whether or not it has an occupant. The current rate is $134 per berth. If by some misfortune the ship does not have any passengers on board such as the Celebrity ship last September that was forced to sail back to Freeport from the West Coast for emergency dry-docking without any paying passengers, then the cost per passenger berth is reduce to the bargain rate of $108 per.

The above of course is just for the toll to transit the Canal, there is a whole laundry list of charges that are in addition to the toll that can't be avoided. A few of those charges are reservation fee, daylight guarantee, mandatory tug service, all of these charges are fairly substantial.

Panama has run the Canal much more like a business as opposed to the toll structure the US had in place before the turnover in 1999. The US was charging more of public service rates, while the Canal made money for the US Treasury, it was no where near what the Canal brings into Panama's coffers. Last year the Canal added just under a billion dollars to Panamanian government, that is a significant amount for a country with an annual budget of around 13 billion.

While tolls have risen almost 400% in the last 14 years, I believe they are close to the peak at what they can charge. When the new expansion locks are opened, I don't think they will be able to just linearly keep on increasing the tolls for the larger ships. Presently the largest container ships that pass through the Canal carry about 4000 TEU containers with a toll in between $300 to $400K. TEU is twenty foot equivalent units, so a ship with that capacity would have about 2000 actual containers on board. The new locks are designed for container ships in the 12000 TEU size which under the present toll structure would have a toll of around $1 million. I sure the shipping companies expect to pay more for a larger ship, but I'm sure they are expecting the economies of scale to enter in the calculations too.

Panama does have a monopoly of sorts, but there are other options such as the Suez which is presently cheaper than the Panama Canal and perhaps other terrestrial options may become economical . Then who knows what will happen with the Nicaraguan venture in the Canal business.

In any event it interesting (if not pricey) for all of us Canal cruisers and Canal watchers!

We can remember years ago when cargo/freighter ships would make their few passengers get off on one side or the other and be bussed across the Isthmus to get the non-passenger rate. Often times their travel agency didn't tell them they wouldn't actually transit the Canal. They were some very angry people!

Do you guys ever go to the PC reunion? We're going this year as it's hubby's 60th from CHS. :)

We can remember years ago when cargo/freighter ships would make their few passengers get off on one side or the other and be bussed across the Isthmus to get the non-passenger rate. Often times their travel agency didn't tell them they wouldn't actually transit the Canal. They were some very angry people!

Do you guys ever go to the PC reunion? We're going this year as it's hubby's 60th from CHS. :)

I had not heard of that wrinkle before... wow those shipping companies were really doing it on the cheap:eek:! On several occasions while traveling to the States with my parents we would catch a United Fruit Co. ship with only 12 passengers in Balboa. The ship would then transit the Canal and sail to New Orleans, that of course was before the SS Cristobal started sailing to NOLA.

CHS, are you talking about the Cristobal Tigers?? Never heard of them;):p!! Seriously, 60th reunion... your hubby must have still been in New Cristobal at that time, before the move to Coco Solo. I honestly don't know if very many posters here are Canal refugees as I am. As for me, I'm a Pacific sider, you know.... the Bulldogs.

I have not been to the Orlando reunions in a couple of years, at least not officially. We live near enough to the reunion, so we would just drive over during the day and see people. I have thought about going to it this year because I would be very interested in hearing the guest speaker at the luncheon, Jorge Quijano, the Canal Administrator.

On Balboa, on Balboa, ........ I graduated in 59 from BHS. I know, sad - I married a Tiger.....ha ha.

We've signed up for the luncheon this year too. Bruce knew Quijano when he was Locks Superintendent in Balboa. Should be an interesting speaker. My close friend Mary C.'s son is being installed as President of the PC Society.

Maybe we'll run into you there......

Cruise Critic is such fun and I learn something new every day. You and Richard are great to respond to questions with accurate info.

Keep up the good work.

On Balboa, on Balboa, ........ I graduated in 59 from BHS. I know, sad - I married a Tiger.....ha ha.

We've signed up for the luncheon this year too. Bruce knew Quijano when he was Locks Superintendent in Balboa. Should be an interesting speaker. My close friend Mary C.'s son is being installed as President of the PC Society.

Maybe we'll run into you there......

Cruise Critic is such fun and I learn something new every day. You and Richard are great to respond to questions with accurate info.

Keep up the good work.

I just got back from Panama on a short combo land/cruise trip which we sailed from Colon. Wasn't quite the same as sailing from Cristobal on the Cristobal, but it was great. One of the things we did while we were there is go back to old BHS. On the first floor they had maps and displays of pre Canal items, maps from the French era and such. On the second floor was a lot of Canal Zone memorabilia, pictures of all the governors and administrators including Quijano. Jorge was my boss way back when he was Assistant Locks Superintendent. That sure is a local boy makes good story! Even went into the library... they have kept it just as I remembered. I probably did not learn anything in the library either... just like before:D! Then it was off to the Napoli for pizza!!

Here's to the reunion and happy cruising!

I just got back from Panama on a short combo land/cruise trip which we sailed from Colon. Wasn't quite the same as sailing from Cristobal on the Cristobal, but it was great. One of the things we did while we were there is go back to old BHS. On the first floor they had maps and displays of pre Canal items, maps from the French era and such. On the second floor was a lot of Canal Zone memorabilia, pictures of all the governors and administrators including Quijano. Jorge was my boss way back when he was Assistant Locks Superintendent. That sure is a local boy makes good story! Even went into the library... they have kept it just as I remembered. I probably did not learn anything in the library either... just like before:D! Then it was off to the Napoli for pizza!!

 

Here's to the reunion and happy cruising!

Curious to see where we may overlap on some great memories but rather than bore people on this thread, could you please send me an email at

c z sandy 2 at g mail dot com

We did a partial transit on the Coral Princess a few years ago and we were told by the Captain that the reason that the port charges for the Canal are so high is because the cruise ship is on a schedule. You see all the container ships, etc., anchored and waiting to transit the Canal, while the cruise ships can't do that because they must get to another port.

We did a partial transit on the Coral Princess a few years ago and we were told by the Captain that the reason that the port charges for the Canal are so high is because the cruise ship is on a schedule. You see all the container ships, etc., anchored and waiting to transit the Canal, while the cruise ships can't do that because they must get to another port.

That certainly is part of the reason, however the additional port charges or "taxes" for the Canal that are tacked on to your cruise fare are a bit more involved as you might imagine. The port charges for a Canal cruise are just about double for an equivalent length cruise to the Caribbean area. Port charges for any regular port call usually are in the $5 to $20 per passenger range. When a cruise ship transits the Canal, the ship is charged $134 per passenger berth. This of course is just the tip of the iceberg of all the charges your ship encounters. Among the other significant charges are $35K for a reservation on a particular day $25K for a complete daylight transit and the list trickles on down from there. All of the charges could easily ring up to somewhere around $350K for your transit of the Canal. By comparison when you make a port call at some Caribbean Island the cost to the ship with 2000 passengers at say $10 per passenger would "only" be $20K.

To be fair, many of the container ships that you saw are also paying some of those additional fees I mentioned, particularly the reservation fee. Many of these ships are carrying time sensitive cargo, refrigerated cargo and many times at the major ports where they are headed only have a small window in which dock space and cranes are available to them. So they too are feeling a time crunch. It is still possible to sail up to the Canal and just take your turn with no additional reservation fee. However a large ship could wait up to a week in some instances, time that may be too valuable to sit going nowhere.

It still is a great trip even though the cost of "admission" can be a little pricey!:)

It still is a great trip even though the cost of "admission" can be a little pricey!

Of course Disney World Park admission is $99 a day!

Regards, Richard