Canal Proposes New Containership Pricing System

After nine months of informal consultations with its customers and the maritime industry, the Panama Canal Authority (ACP) today announced a formal proposal to update their current vessel measurement and pricing system for full container vessels and other vessel types with on-deck container capacity. The ACP’s proposal would change the system that the Canal currently uses for the container segment – from the Panama Canal Universal Measurement System (PC/UMS) to the industry standard of the Twenty-Foot Equivalent Unit (TEU).

The updated measurements and pricing system will bring the ACP’s system on par with international standards of the container industry, provide a more accurate measurement, offer more transparency to Canal users and their customers and enable the ACP to receive a fair value for its product.

On November 23, 2004 the ACP Board of Directors gave authorization to proceed with the formal proposal announced today. If approved, the new system will be implemented on a graduated basis over the course of three years, beginning in the second quarter of 2005.

The ACP conducted informal consultations with Canal customers and representatives of the World Shipping Council and the International Chamber of Shipping. The ACP has also made every effort to incorporate inputs from these representatives into the new proposal.

Formal consultation on the proposal begins today and will continue until January 6, 2005.

The ACP will consider additional inputs and feedback from interested parties. The ACP welcomes data, opinions, written statements (in English or Spanish) before the above deadline. In addition, a public hearing will be conducted on January 7, 2005 in the “Ascanio Arosemena” auditorium, Balboa, Republic of Panama at 9:00 a.m. EST. For more information or to obtain an electronic copy of the proposal, please visit: www.pancanal.com.

The main elements of the proposal are as follows:

· For Full container vessels: The new measurement system will be updated to reflect international standards for a container – the twenty-foot equivalent unit (TEU), measuring 20’x 8’x 8.5’ in size. These vessels will be charged based on their capacity to carry TEU containers, replacing the current Panama Canal/Universal Measurement System (PC/UMS) tonnage. The new TEU container carrying capacity of the vessels will take into account the visibility limitation imposed by the Panama Canal.

· Other Vessels with on-deck container carrying capacity: Vessels other than full container ships that have on-deck container carrying capacity will continue to use PC/UMS tonnage to measure enclosed spaces and spaces below deck. The transit charge of these vessels will be the ship’s current PC/UMS volume charge plus the actual TEU containers transported on-deck on each transit.

The proposed pricing plan will be implemented as follows:

PRICE/TEU IMPLEMENTATION DATE $42 May 1, 2005 $49 January 1, 2006 $54 January 1, 2007