The optimal toll scheme for ships queuing at the entrance of Panama Canal

Abstract

As the insufficiency of watercourses and the limitation of breadth are leading to long queues at Panama Canal, the plan of canal expansion is undertaken by the authorities to increase the service capacity. In order to avoid ships queuing at the entrance of the canal, this research establishes an optimal toll scheme, which will effectively disperse ship arrival times and eliminate long queues. The research shows all ship arrival rates at the entrance of canal before and after implementing the optimal toll scheme.