The Panama Canal authorities aim to clarify the misunderstanding surrounding auction slots, emphasizing that they do not allow vessels to bypass waiting lines. Victor Vial, CFO of the Panama Canal Authority (ACP), stated, “No vessel is skipping the line.” Each auction slot corresponds to a pre-planned transit for the day, with three slots set aside daily for LPG and LNG shipments requiring immediate space.
Yumiko Casiano, a revenue management leader at ACP, elaborated that auction slots become available when there are canceled bookings, with three to five slots potentially up for grabs each day. This auction system was introduced to enhance transparency and fairness in prioritizing vessels. Vial pointed out that the market dictates the pricing, making the system demand-driven.
The auction prices have significantly risen, reflecting the high demand for transit, particularly as U.S. tankers carrying crude oil and LNG head to Asia. Prior to the war, auction slots were between $135,000 and $140,000, but they surged to around $385,000 in recent months. The ACP credits improved wet weather for enhancing transit speeds, leading to an increase in capacity.
Despite initial expectations of reduced daily transits due to tariffs, the canal is currently accommodating around 40 to 41 vessels daily, exceeding the projected numbers. This increase has resulted in the introduction of the Long-Term Slot Allocation (LoTSA) system, allowing vessels, including LNG carriers, to reserve slots in advance. A new version, LoTSA 2.5, is set to launch on April 28, offering greater flexibility for shipping companies amid ongoing disruptions.
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