The Panama Canal Authority has decided to fine-tune the Transit Reservation (booking) System for Neopanamax vessels, effective October 1, 2018.
The aim is to boost the canal’s efficiency and curb unused reservations, especially in the LNG sector, by tailoring the reservation process, and restructuring cancellation fees for current LNG carrier practices.
Panama Canal Administrator Jorge L. Quijano revealed the plans to World Maritime News in June this year, explaining that the goal is have the bookings reserved closer to the very transit enabling the canal authority to have the real picture and have one booking for one transit.
Despite being the fastest-growing segment, LNG vessels currently use only 60% of the reservations they acquire. Often, the unused bookings are not cancelled in time to allow for the transit of other ships.
As such, the canal authority wanted to find a way to better streamline and accommodate LNG transits going forward, while maximizing the operation of the waterway for all segments. The ultimate goal is to improve slot utilization and service reliability, the authority explained.
Currently, three booking periods are available for customers determined by the days prior to the requested transit date. However, the announced adjustments will introduce a new booking period within the 1st booking period, called booking period 1.a, which will be accompanied by corresponding modifications to the duration and slot allocation within each booking period.
“These changes will also include a transition period for those LNG vessels that have already obtained slots during the current booking period 1, which will allow customers to release them without being charged a cancellation fee,” the authority said.
The total slots available for Neopanamax vessels and priority for certain market segments will remain unchanged.
“We are fully committed to understanding and meeting the ever-changing needs of the global shipping community,” said Panama Canal Administrator Jorge L. Quijano.
“These changes, guided by input from our customers, strategic planning and years of experience, are an essential next step in ensuring the continued availability of the Expanded Canal for all.”
“We tailored the Transit Reservation System to align with the LNG market’s spot and long-term contracts market (Annual Delivery Program) and scheduling, commensurate with the lifting of certain restrictions currently imposed on LNG vessels,” Silvia de Marucci, Executive Manager of the Panama Canal’s Economic Analysis and Market Research Division, added.
The modifications are the result of customer feedback and experience of over two years of experience transiting Neopanamax vessels, including LNG vessels, which were first introduced to the waterway with the Inauguration of the Expanded Canal in 2016.