PANAMA FLASH! | Panama City – August 1st, 2024
Modifications to the Transit Reservation (Booking) System Neopanamax Locks – Long-Term Slot Allocation (LoTSA)
The Panama Canal (ACP), in its commitment to provide an efficient and reliable service to its customers, has been working to better understand the needs of customers regarding medium and long-term planning, their desired level of reliability, and the design of a Transit Reservation System that provides maximum value while being flexible, transparent, efficient, and predictable. In response to the valuable feedback and expressed needs of our customers, we are pleased to announce the Long-Term Slot Allocation (LoTSA) initiative for Neopanamax vessels. This initiative enhances our Transit Reservation System certainty by dovetailing with current market conditions, as expressed by our customers.
Through the LoTSA method, ACP will offer transit booking slot packages to various market segments, which will include a specific number of weekly or monthly slots per calendar year, for northbound and/or southbound transits. Four slots from the Neopanamax daily offer will be allocated through the LoTSA method, for a total of 28 slots per week, beginning with week one and extending through week 52 per year. Each week spans from Sunday to Saturday.
These packages and their characteristics will be announced through the Projected Booking Slot Availability report available in the Panama Canal webpage (www.pancanal.com) and will be allocated to the highest bidders through a SEALED BID AUCTION. If two or more customers submit a bid for the same amount, the tiebreaker will be based on the order in which the bids were received in the Panama Canal Auction System.
The amount of the sealed bid refers to the maximum amount the customer is willing to pay for each slot included in the package, with a base amount of $200,000.00 USD (two hundred thousand US dollars).
The sealed bid auctions for the first calendar year of this initiative for booking dates from January 5, 2025, to January 3, 2026, will be held on designated windows beginning September 2, 2024. The terms and conditions for the LoTSA initiative is available in the following link: https://pancanal.com/en/maritime%20services/vessel-eta-and-transit-booking
The following table summarizes the slot distribution per Booking Period for the Neopanamax Locks for booking dates from January 5, 2025, until further notice:
Slots not allocated through the LoTSA method will be carried over to Booking Period 1a.
For the total of all available daily slots offered in all booking periods, including the LoTSA slots, the limits per direction and restriction will be as follows: no more than five (5) Neopanamax vessels may be booked for transit in the northbound direction, and of these, no more than one (1) with daylight restriction. Similarly, no more than four (4) Neopanamax vessels may be booked for transit in the southbound direction, and of these, no more than one (1) with daylight restriction. The rules published in the Notice to Shipping N-7-2024 regarding the maximum number of slots that may be allocated to LNG vessels and the maximum number of slots for “daylight-restricted” vessels, combined with LNG vessels, will remain unchanged.
The ACP is dedicated to optimizing the allocation of its transit slots. To this end, the slots not allocated through the LoTSA initiative will continue to be available via the established Transit Reservation System and the Panama Canal Auction System. In a move towards environmental sustainability, revisions to the Customer Ranking metrics and calculations are currently being considered. These adjustments aim to promote the efficient use of water and the reduction of carbon emissions. Details of these changes will be communicated in a forthcoming Advisory to Shipping, ensuring all stakeholders are informed and can plan accordingly.
Aligned with our commitment towards decarbonization and achieving net-zero greenhouse gas emissions by 2050, we are pleased to announce a new initiative for our clients willing to join us in this effort. For booking dates starting January 1, 2025, a dedicated monthly slot will be auctioned to Neopanamax vessels that meet the standards established in the Panama Canal Green Vessel Classification (refer to Advisory to Shipping No. A-12-2023). This exclusive slot will become available for auction 30 days prior to the scheduled transit date. This pilot program is designed to encourage the transit of vessels equipped with energy-efficient technologies and/or alternative fuels, thereby contributing to the reduction of our scope three emissions. We believe this step will not only support our environmental goals, but also promote sustainable practices within the maritime industry. Further information regarding this initiative will be provided in an upcoming Advisory to Shipping.
In addition, for booking dates beginning January 1, 2025, the required arrival time for booked supers or regular vessels with transit restrictions (clear-cut, clear-cut daylight hours) will be 2200 hours on the day prior to their booking date. If the vessel does not arrive by the required arrival time, the vessel will be subject to forfeiture of the prescribed booking fee. Commercial passenger vessels are exempt from this new arrival requirement.
Long-Term Slots Allocation (LoTSA)Terms and Conditions
The Long-Term Slot Allocation (LoTSA) is a new method for Neopanamax vessels to secure transit slots in the Panama Canal. This method allows customers to reserve transit slot packages through a Sealed bid process available in the Panama Canal Transit Auction System.
The following table summarizes the package availability and the slot distribution per package to be allocated the first year through the LoTSA method for booking dates from January 5, 2025, to January 3, 2026:
The Long-Term Slots (LoTSA) Packages offered through a sealed bid auction will be subject to the following terms and conditions:
1. Customers awarded Long-Term Slots (LoTSA) will enjoy the following privileges without additional charges:
1.1 Unlimited swaps and substitutions requested at least 8 days prior to the transit date.
1.2. Flexibility may be granted for transit up to 2 days following the booking date, provided that the request is made no less than 8 days prior to the booking date and subject to evaluation by the ACP. The newly requested date will not have an in-transit time guaranteed. Any other cases will be assessed the corresponding booking tariffs applicable at the time the service is requested.
1.3. Customers with higher bids will have priority over customers with lower bids when choosing their transit dates.
2. Customers awarded Long-Term Slots (LoTSA) have the same options as other booking slots such as Just in time and transit date advancement, subject to an additional fee as per the published Official Maritime Tariffs. Please note that all the rules and conditions published in A-13-2024 and Notice to Shipping N-07-2024 will remain in effect.
3. Booking slots acquired via the LoTSA method will be exempt from the High Demand surcharge.
4. The Customer Code, the bid amount, number of packages, payment method and guarantor bank will be the only information required to place a bid in the Panama Canal Transit Auction System.
5. A different username is required for each Customer Code that participates in the sealed bid process, as currently required in the Panama Canal Auction System. The system will validate the username and the Customer Code used to place the sealed bid and will create a key with this information.
6. These sealed bid auctions will be published not earlier than 0800 hours on day one and the closing time will be at 1200 hours on the next day.
7. The auction closing time will not be extended.
8. The initial or base price of the sealed bid auction for each slot included in the package will be $200,000 USD (Two Hundred Thousand US dollars).
9. Since several LoTSA packages will be offered at the same time, these packages will be awarded to the customer who submits the highest bid during the auction in descending order. If two or more customers submit the same bid amount at the time the auction closes, the allocation of packages between them will be based on the time each bid was received, in descending order.
10. In case there are customers interested in more than one package, and the number of packages offered exceeds the number of customers participating in the auction, one package will be allocated to each customer that participated in the auction by their bid amount, in descending order (from highest to lowest) and the remaining packages will be allocated individually using the same bid amount order within the customers that are interested in more than one package. For example:
10.1. Example 1: 7 packages offered with 7 or more bidders in the auction interested in more than 1 package: the packages will be awarded according to 7 highest bids, in descending order. If two or more customers submit the same bid amount at the time the auction closes, the allocation of packages between them will be based on the time each bid was received, in descending order.
10.2. Example 2: 7 packages offered; and less than 7 bidders in the auction, in which there are some of them interested in more than 1 package: the packages will be awarded according to the highest bids in descending order, and the remaining packages will be awarded between the bidders interested in more than 1 package, according to the highest bid, in descending order.
11. Similar to the current auctioned slots procedure, customers awarded Long-Term slots shall submit a particular date booking request in The Transit Reservation System (Booking) Application according to the acquired LoTSA week or month and the following priorities:
11.1. First priority is 70-60 days prior to the awarded LoTSA week: Highest bid of offering #1 and #2
11.2. Second priority is 59-55 days prior to the awarded LoTSA week: Rest of the customers from offering #1 and #2
11.3. Third priority is 54-50 days prior to the awarded LoTSA week: Highest bid of offering #3 and #4
11.4. Fourth priority is 49-35 days prior to the awarded LoTSA week: Rest of the customers.
In this request, the customer shall introduce the package code and check the “Long-Term Slot” box.
Note: In addition, Full-daylight restricted vessels, tug-and-barge units and non-self[1]propelled vessels are not allowed to participate to book their transit through the LoTSA initiative.
12. For each recurring week the same priority procedure presented above will apply.
13. Under this scheme, a LoTSA slot is booked to transit in a specific week or month. The specific transit date should be defined no later than 35 days prior to the beginning of the month of the intended LoTSA week. If the customer fails to submit the desired booking date request for the acquired LoTSA week, the slot will be forfeited, and the customer will be assessed a cancellation fee equal to the sealed bid amount.
14. In the event of a LoTSA slot cancellation request, a fee equivalent to the auctioned bid amount for the booking slot will be applied. Furthermore, cancellations made with less than 2 days prior to the transit booking date will incur an additional fee of $250,000 USD, in addition to the original sealed bid amount for the slot.
15. Slots are not transferable to other customers unless the customers operate within an alliance and meet the requirements specified in Notice to Shipping N-7-2024 and the Customer Code Issuance, Consolidation and Deactivation Procedures.
16. Once the package is awarded through the LoTSA method, the customer or his corresponding local shipping agent must submit the appropriate LoTSA request at the time the package is awarded. At this time, the customer must specify the payment method that will be used at the time the vessel´s visit is assigned to the LoTSA slot; that is, line of credit, payment gateway, revolving fund or bank guarantor. The request form includes each of the acquired slots based on the auction bid amount. Further information will be announced in a timely manner.
For additional information, please reach out to our operators at operations@nortonlilly.com.pa
Norton Lilly International (Panama) S.A.
Bldg. 3825 – Office 204
Howard – Panama-Pacifico
Panama, Rep. of Panama
Tel: (507) 304-4600
Main email: operations@nortonlilly.com.pa (24 hours)
