The Panama Canal Authority (ACP) is launching an innovative new system for booking transit slots, called the Long-Term Slot Allocation (LoTSA). This pilot program aims to provide better planning and visibility for canal users, particularly those operating Neopanamax vessels. Here’s what you need to know about LoTSA:
WHAT IS LoTSA?
LoTSA is a long-term transit reservation system that offers booking slot packages for different market segments. It allows customers to secure transit slots up to a year in advance, providing unprecedented long-term planning capabilities.
KEY FEATURES
- Duration: The pilot program runs from January 5, 2025, to January 3, 2026
- Slot Availability: 28 slots per week (4 per day)
- Direction: 5 northbound (1 restricted) and 4 southbound (1 restricted) slots
MARKET SEGMENTS AND PACKAGES
The LoTSA system offers a variety of packages tailored to different market segments and transit needs.
- For Full Containers, there are two package types: one offering 104 slots per year (one slot per direction each week) and another with 52 slots per year (one slot each week). These packages provide consistent weekly transit options for container vessels.
- LNG and LPG vessels have two package options as well. The first offers 24 slots per year, allowing for two transits per month. The second provides 12 slots per year, enabling one transit per month. These packages cater to the specific needs of the LNG/LPG market, which typically requires less frequent transits compared to container ships.
- For vessels that don’t fit into the specific Full Container or LNG/LPG categories, there’s an “All Segments” package. This option includes 6 slots per year, allowing for no more than one transit per month. It provides flexibility for various vessel types that may need occasional canal access. Each package is designed with a specific transit frequency and direction.
Full Container packages offer a mix of northbound and southbound transits, while LNG/LPG and All Segments packages focus on southbound transits. The number of slots in each package determines how many transits a customer can secure over the year-long period from January 5, 2025, to January 3, 2026.
The variety of packages allows customers to choose the option that best fits their transit needs and frequency requirements, providing long-term planning capabilities and improved resource allocation for both canal users and the Panama Canal Authority.
HOW DOES IT WORK?
Bidding Process:
- Participants will submit bids through a sealed auction system.
- Each slot has a base price of $200,000 USD.
- The highest bidder for each slot wins the reservation.
Auction Dates:
The sealed bidding process for the first calendar year period, covering booking dates from January 5, 2025, to January 3, 2026, will be held according to the following schedule:
For LNG/LPG market segment:
- September 9, 2024: Auction for 6 packages with 24 slots each
- September 11, 2024: Auction for 18 packages with 12 slots each
For Full Containers market segment:
- October 1, 2024: Auction for 7 packages with 104 slots each
- October 3, 2024: Auction for 7 packages with 52 slots each
For All market segments:
- October 7, 2024: Auction for 1 package with 6 slots
Slot Allocation:
- Slots will be allocated based on the bidding results and the timing of bids:
- 70-60 days before transit: Highest bidders for the first two offerings get priority.
- 59-55 days before transit: Remaining bidders from the first two offerings.
- 54-50 days before transit: Highest bidders for the next two offerings.
- 49-35 days before transit: All remaining customers can secure available slots.
BENEFITS AND FLEXIBILITY
- Long-term Planning: Secure slots up to a year in advance
- Swapping and Substitutions: Allowed free of charge up to 8 days before transit date. The slots bought in LOTSA could be Swapped and Substituted with regular bookings.
- Date Changes: Possible up to 2 days after the original date without charge, if requested 8 days prior
- Transfers: Slots can be transferred to vessels within the same alliance
- Important Considerations
- Late cancellations (2 days or less before transit) incur a $250,000 fee
- Failure to comply with booked date results in slot forfeiture and full charge
- LoTSA slots are not subject to High Demand Day fees
- Not applicable for “Full-daylight”, “tug-and-barge units”, and Dead-tow vessels
- Vessels must belong to the awarded market segment
HOW TO PARTICIPATE
- Register user and customer code
- Select payment method
- Provide guarantor bank information
- Specify the number of packages interested in
- Submit bid amount
For further assistance or to participate in the LoTSA program, please contact your Inchcape Shipping Services representative at Panama.ISSOPS@iss-shipping.com or fernando.ayala@iss-shipping.com
LoTSA represents a significant change in Panama Canal transit bookings, offering customers greater certainty and flexibility in planning their transits. As a pilot program, it may be subject to changes based on its effectiveness and user feedback. For more details, please see the attached documents below.