Free Transit For Cruise Ships Through Panama Canal

[Expat Cruise]

The Government of Panama is looking to become more of a cruise center. They are offering free transit through the Canal for any ship that is based in Panama. Starting a cruise or ending a cruise from Panama.  This a a half a million dollar costs plus, depending upon the ship.  http://www.seatrade-cruise.com/news/news-headlines/panama-to-pay-one-canal-transit-as-homeporting-incentive.html?utm_content=Panama to pay one Canal transit as homeporting incentive&utm_source=Email&utm_medium=Seatrade Cruise News&utm_contact=24896632&utm_term=Newsletter_Seatrade Cruise Weekly News&utm_campaign=146739

[BillB48]

Very interesting.  Looks like they are really trying to attract  Canal cruises, be very interested to see if anyone takes the bait.

[Essiesmom]

Windstar always has a lot of seasonal short cruises through the canal, starting or ending in Colon.  Wind Star and Star Pride start in Dec.  Star Breeze takes over in the Spring...EM

[BillB48]

I wonder if there is a clause buried deep in the mice type... this offer not valid to vessels that have previously homeported in  Colon during the last century. 😉 lol

[chengkp75]

On 6/15/2019 at 12:47 AM, BillB48 said:

Very interesting.  Looks like they are really trying to attract  Canal cruises, be very interested to see if anyone takes the bait.

Yeah.  Airfares would make the home port less attractive to a lot of cruisers, so perhaps discounted fares, plus there is the cost to implement the infrastructure to home port a ship there, shipping supplies, bunker prices, whole lot of year over year things to offset against a one time free canal tariff.

[BillB48]

Flying to Panama and low cost air fares were never something you spoke of in the same sentence.  Not sure if there has been any improvement on that front recently or not.  They do have facility in Colon for homeporting with check in booths, luggage handling equipment and the like adjacent to the pier used for ships calling for the day.  They do have a pretty good ability to provide bunkering on both sides of the sides of the Canal with small tankers/barges.  Royal Caribbean, Pullmantur and Windstar have homeported in Colon for part of the year in the past.  Presently the Canal is building a pier at Ft. Amador on the Pacific side, ships that called at Amador previously had to tender with their own tenders and it usually wasn't a short tender process

 

Perhaps that carrot they are dangling out there might seal the deal if a company was on the fence in providing that itinerary... not so sure if it will drag in a completely new customer.

[chengkp75]

I've bunkered in Panama before, so I'm aware of the infrastructure, just thinking of prices (haven't checked to see what Panama is relative to US), especially considering cruise lines' use of bunker futures contracts.  Wonder how long a commitment is required to get the freebie.

[new_cruiser]

I'm not sure of the meaning of "home port." Is it just that cruises embark & debark there or is more implied?

 

One way itineraries between Balboa and Miami could provide full transits on a 7-day itinerary which might be attractive to those who can't get away for the longer full transits.

On 6/15/2019 at 3:00 AM, BillB48 said:

I wonder if there is a clause buried deep in the mice type... this offer not valid to vessels that have previously homeported in  Colon during the last century. 😉 lol

The ships that currently sail out of Colon are ~200 passengers or less. The transit cost for cruise ships is based on passenger count (or maybe capacity). IIRC, the charge for Wind Star was around $35K, so one free transit wouldn't make much difference to canal revenue.

[BillB48]

Fairly recently Pullmantur had the Monarch on a 7 day itinerary homeporting in Colon seasonally, in round numbers she is 880x105 making her a Panamax vessel.  That would make her tolls a little north of $300K, even that would not be that big of a loss to Canal revenue since their yearly gross revenue is in the vicinity of $3 billion.  I'm sure what they are looking for is the revenue that would follow along with passenger spending, ie. hotels, other tours, restaurants and the like  In fact even if all the cruise ships went somewhere else, it would barely be noticed since cruise ships make up less than 2% of total revenue.  Having said all that, the Canal is a for profit enterprise and they seem ready to pursue all avenues.

 

Tolls are calculated for the larger ships based on the total passenger berths, which would be their "capacity".  However, there is a formula they use to establish whether a ship will be charged per berth or by the Panama Canal Universal Measurement System (PC UMS) which is a volume measurement not unlike gross tonnage.  Small ships like the Wind Star would make out very favorably on a per berth basis... so they are measured by PC UMS.

 

Homeporting just means basing the ship at a particular port to begin and end cruises.

Edited June 24, 2019 by BillB48

[chengkp75]

1 hour ago, BillB48 said:

Fairly recently Pullmantur had the Monarch on a 7 day itinerary homeporting in Colon seasonally, in round numbers she is 880x105 making her a Panamax vessel.  That would make her tolls a little north of $300K, even that would not be that big of a loss to Canal revenue since their yearly gross revenue is in the vicinity of $3 billion.  I'm sure what they are looking for is the revenue that would follow along with passenger spending, ie. hotels, other tours, restaurants and the like  In fact even if all the cruise ships went somewhere else, it would barely be noticed since cruise ships make up less than 2% of total revenue.  Having said all that, the Canal is a for profit enterprise and they seem ready to pursue all avenues.

 

Tolls are calculated for the larger ships based on the total passenger berths, which would be their "capacity".  However, there is a formula they use to establish whether a ship will be charged per berth or by the Panama Canal Universal Measurement System (PC UMS) which is a volume measurement not unlike gross tonnage.  Small ships like the Wind Star would make out very favorably on a per berth basis... so they are measured by PC UMS.

 

Homeporting just means basing the ship at a particular port to begin and end cruises.

You are correct that Panama, not just the Canal Authority, is looking for the economic benefit of a ship home porting in Panama.  The one time free transit is a "loss leader" to get a cruise line to sign a long term contract for use of the new terminal, to offset its cost.  What the cruise lines have to look at, is the year over year cost differential (and demographic draw) of homeporting in Panama over anywhere else, and whether the one time free transit outweighs any additional costs.