[Federal Register Volume 62, Number 43 (Wednesday, March 5, 1997)]
[Proposed Rules]
[Pages 9997-10000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5396]


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PANAMA CANAL COMMISSION

35 CFR Part 103

RIN 3207-AA40


Preference in the Transit Schedule/Order of Transiting Vessels; 
Passenger Steamers Given Preference in Transiting

AGENCY: Panama Canal Commission.

ACTION: Notice of proposed rule with request for comments.

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SUMMARY: This document proposes a test of a revised vessel transit 
reservation system. The proposed rule incorporates certain new 
features, including increasing the number of

[[Page 9998]]

available reserved transit slots, creation of a third booking period, 
establishment of new booking fees for transit reservations whenever the 
total number of vessels awaiting transit is excessively high, and 
clarification and refinement of procedures concerning cancellations 
refunds, and penalties.
    The proposed rule being announced also makes certain passenger 
vessels seeking preference over other vessels in transiting the Panama 
Canal, that heretofore were exempt, subject to the revised vessel 
transit reservation system to be tested.

DATES: Written comments must be received on or before April 4, 1997.

ADDRESSES: Written comments may be mailed to John A. Mills, Secretary, 
Panama Canal Commission, 1825 I Street, NW, Suite 1050, Washington, DC 
20006-5402, Telephone (202) 634-6441, Fax (202) 634-6439, Internet E-
Mail: [email protected].

FOR FURTHER INFORMATION CONTACT: John A. Mills, Secretary, Panama Canal 
Commission, 1825 I Street, NW, Suite 1050, Washington, DC 20006-5402, 
Telephone (202) 634-6441, Fax (202) 634-6439, Internet E-Mail: 
[email protected].

SUPPLEMENTARY INFORMATION: On April 1, 1983, the Panama Canal 
Commission (PCC) implemented the vessel transit reservation system 
described in 35 CFR 103.8.
    Section 1801 of the Panama Canal Act of 1977, as amended (22 U.S.C. 
3811), authorizes PCC to prescribe and, from time to time, amend 
regulations governing the passage and control of vessels through the 
Panama Canal or any part thereof, including the locks and approaches 
thereto.
    For the reasons discussed below, PCC proposes to adopt an interim 
rule to test certain improvements and modifications to the current 
vessel transit reservation system, formerly known as the Panama Canal 
Transit Booking System.
    Technological advances now permit the shipping industry to schedule 
vessels for arrival and transit of the Panama Canal earlier than the 
current 21-day limitation stipulated in 35 CFR 103.8. Additionally, a 
significant number of Canal customers (especially those who utilize the 
reservation system) operate on regular fixed schedules that are planned 
and published as much as a year in advance.
    The sixteen (16) reserved transit slots currently available are 
based on what the sustainable Canal capacity was in 1983 when the 
current vessel transit reservation system was put into effect. Today, 
due to major Canal improvements and more efficient use of PCC's 
operational resources, the sustainable Canal capacity has been 
significantly increased, thereby allowing reserved transit slots to be 
increased to 21.
    Under the current vessel transit reservation system, when reduced 
Canal capacity attributable to maintenance and other factors coincides 
with unusually high vessel arrivals, transit bookings frequently are 
suspended. Canal customers complain that it is during just such periods 
that the vessel transit reservation system is the most beneficial to 
shipping and, for that reason, Canal authorities should continue taking 
reservations.
    In response to these customers complaints, when due to various 
operational factors sustained Canal capacity is expected to be reduced, 
Canal authorities will continue to book transits, although the number 
of available reserved transit slots may be reduced. To better reflect 
the market value of the transit reservation service being provided to 
Canal customers whenever the total number of vessels awaiting transit 
is excessively high, customers wishing to reserve transit slots during 
these periods will be required to pay a premium booking fee.
    Since 1925, certain passenger vessels have been given preference 
over other vessels in transiting the Panama Canal; the original 
justification being that such vessels carried the bulk of overseas 
travelers and mail and, unlike most other vessels, operated on fixed 
published schedules. When the current vessel transit reservation system 
went into effect in 1983, passenger vessels were exempted from the 
provisions thereof and continued to receive preference in transiting. 
Today, the focus of the passenger vessel industry is luxury leisure 
cruising. Also, many other types of vessels now operate on fixed 
published schedules.
    In fairness to all Canal customers seeking timely transits, 
commercial passenger vessels, as a condition to continuing to receive 
preference in transiting the Canal, should be required to reserve 
transit slots and pay prescribed booking fees.
    Technological improvements in PCC's communications capabilities 
will permit Canal customers to request transit reservations 24 hours a 
day.
    Cancellations of transit bookings on short notice by Canal 
customers is disruptive to vessel transit operations. Shortened 
deadlines coupled with financial incentives will encourage customers to 
give Canal authorities greater advance notice of cancellations.
    Summarizing, PCC hereby proposes to implement an interim rule, 
which would test certain modifications and refinements of the existing 
rule, in the following particulars:
    1. Make commercial passenger vessels subject to the vessel transit 
reservation system as a condition of continued preferential treatment 
in transiting;
    2. Increase the number of reserved transit slots from 16 to 21;
    3. Permit reservation requests to be made via fax, 24 hours a day, 
with processing handled on a first come-first served basis;
    4. Permit transit reservations to be made up to 365 days in 
advance;
    5. Increase booking fee whenever the total backlog of vessels 
awaiting transit is projected to be, within 48-hours, 90 or more 
vessels, to $0.69 per PC/UMS Net Ton;
    6. Use shortened deadlines and financial incentives to reduce 
cancellations of transit bookings on short notice; and
    7. Clarify policies and procedures concerning refunds and 
penalties.
    The test of the interim rule will be 120 days in duration, or 
longer, to afford PCC a fair opportunity to determine whether the 
refinements to the current rule discussed herein, are feasible and 
beneficial to PCC and its customers.
    PCC strongly encourages all interested persons to submit written 
data, views or arguments before PCC publishes the interim rule in the 
Federal Register. All timely written submissions will be considered by 
PCC. Wherever suggested revisions to the proposed rule are indicated, 
revisions based thereon will be made. The test of the interim rule will 
commence upon its publication in the Federal Register, but no earlier 
than the expiration of the comment period announced in this notice.
    PCC is exempt from Executive Order 12866. The provisions of that 
directive, therefore, do not apply to this proposed rule. Even if the 
Order was applicable, this proposed rule would not have any significant 
economic impact on any substantial number of small entities under the 
Regulatory Flexibility Act of 1980.
    Additionally, PCC has determined that implementation of this 
proposed rule will not have an adverse effect on competition, 
employment, investment, productivity, innovation, or the ability of the 
U.S.-based enterprises to compete with foreign-based enterprises in 
domestic or export markets.
    The Secretary of PCC certifies that these proposed regulatory 
changes meet the applicable standards contained in sections 3(a) and 
3(b)(2) of Executive Order No. 12988 of February 7, 1996.

[[Page 9999]]

List of Subjects in 35 CFR Parts 103 and 104

    General provisions governing vessels, Panama Canal, Vessels.

    For the reasons set forth in the preamble, PCC proposes to amend 35 
CFR Chapter 1 by removing Secs. 103.8 and 103.9, and adding a new part 
104 to read as follows:

PART 104--VESSEL TRANSIT RESERVATION SYSTEM

Sec.
104.1  Applicability and scope.
104.2  Definitions.
104.3  Booking periods; allocation of booking slots.
104.4  Booked transits.
104.5  Passenger vessel preference.
104.6  Booking Fees.
104.7  Penalties.
104.8  Re-scheduling; refunds.
104.9  Cancellations.
104.10  Regular transits.
104.11  Temporary suspension of system.
104.12  Further implementation.

    Authority: 22 U.S.C. 3811.


Sec. 104.1  Applicability and scope.

    Subject to the limitations imposed by Article III of the 1901 
Treaty to Facilitate the Construction of a Ship Canal, entered into by 
the United States and Great Britain, and by Articles II and VI of the 
1977 Treaty concerning the Permanent Neutrality and Operation of the 
Panama Canal, between the United States and the Republic of Panama, 
Canal authorities have implemented a vessel transit reservation system 
that allows vessels desiring transit of the Panama Canal to reserve 
transit slots by complying with the provisions of this part.


Sec. 104.2  Definitions.

    (a) Booked for transit means that a vessel, in advance of arriving 
at the Canal, has been assigned a specific date by Canal authorities on 
which it will be moved through the Canal and that the vessel has 
otherwise complied with the provisions of this part.
    (b) Regular transit means movement through the Canal of a vessel 
that has not been booked for transit.
    (c) Required arrival time means the date and the hour of the day 
established by Canal authorities as the deadline by which a vessel 
booked for transit must arrive at a terminus of the Canal in order to 
transit on its reserved transit date.


Sec. 104.3  Booking periods; allocation of booking slots.

    (a) Vessel agents only may request reserved transit slots for 
vessels during the following booking periods:
    (1) First period--365 to 22 days prior to the requested transit 
date.
    (2) Second period--21 days to 4 days prior to the requested transit 
date.
    (3) Third period--3 to 2 days prior to the requested transit date.
    (b) A total of 21 reserved transit slots will be made available for 
all three booking periods, allocation of which among the booking 
periods is to be determined by Canal authorities. Canal authorities, 
from time to time, may adjust the total number of available reserved 
transit slots to ensure continued safe and efficient operation of the 
Canal.


Sec. 104.4  Booked Transits.

    (a) The specific order vessels transit the Canal, whether booked or 
regular transits, shall be determined by Canal authorities. Except as 
provided in this part, a vessel booked for transit may not transit 
prior to its reserved transit date, unless Canal authorities determine 
that assigning the vessel an earlier transit slot would not impair safe 
and efficient operation of the Canal.
    (b) Notwithstanding any subsequent assignment of an earlier transit 
slot, a vessel booked for transit will be charged the prescribed 
booking fee.
    (c) Substitution of reserved transit slots between or among vessels 
booked for transit will be permitted only on conditions specified by 
Canal authorities.


Sec. 104.5  Passenger vessel preference.

    To the extent consistent with efficient operation of the Canal, and 
subject to being booked for transit, commercial passenger vessels 
running on fixed published schedules will be given preference over 
other vessels in transiting, as determined by Canal authorities.


Sec. 104.6  Booking fees.

    (a) The booking fee for reserving a transit slot for a vessel 
measured in accordance with Sec. 135.13(a) of this chapter, shall be 
$0.26 per PC/UMS Net Ton.
    (b) The booking fee for reserving a transit slot for a vessel 
subject to transitional relief measures and measured in accordance with 
Sec. 135.13(b) of this chapter, shall be $0.23 per Panama Canal Gross 
Ton, as specified on the last tonnage certificate issued to the vessel 
by Canal authorities between March 23, 1976 and September 30, 1994, 
inclusive.
    (c) Notwithstanding any contrary provision, whenever the total 
number of vessels awaiting transit at both terminuses of the Canal is 
projected by Canal authorities to be, within 48-hours, 90 or more 
vessels, any vessel booked for transit that transits the Canal while 
this condition is in effect shall automatically be assessed a booking 
fee of $0.69 per PC/UMS Net Ton.
    (d) Notwithstanding any contrary provision, the minimum booking fee 
for any vessel booked for transit shall be $1500.


Sec. 104.7  Penalties.

    (a) The reserved transit slot of a vessel booked for transit will 
be cancelled by Canal authorities and a penalty fee assessed in a sum 
that is the greater of the prescribed booking fee or $1,500, in the 
following situations:
    (1) When a vessel that is subject to transit restrictions (e.g., 
clear cut, clear-cut daylight) has been booked for transit and does not 
arrive at a terminus of the Canal by 0200 hours of the day of the 
scheduled transit;
    (2) When a vessel that is not subject to transit restrictions has 
been booked for transit and does not arrive at a terminus of the Canal 
by 1400 hours of the day of the scheduled transit; or
    (3) When a vessel booked for transit arrives on time but cannot or, 
at the vessel operator's election, does not transit as scheduled, 
despite the readiness of Canal authorities to proceed.
    (b) Canal authorities may waive assessment of a penalty fee if the 
vessel agent presents acceptable proof that late arrival of the vessel 
was due to a medical or humanitarian emergency arising during the 
voyage, or a naturally occurring, extraordinary phenomenon or event of 
major proportions that could not have been reasonably predicted in 
advance.
    (c) Failure of the vessel agent to provide complete and accurate 
information required by Canal authorities when requesting transit 
bookings may result in rejection of the booking request or cancellation 
of the vessel's reserved transit slot.
    (d) When a vessel's reserved transit slot is cancelled, and unless 
otherwise directed by the vessel agent, upon arrival, Canal authorities 
will re-schedule the vessel for regular transit.


Sec. 104.8  Re-scheduling; refunds.

    (a) Except as otherwise provided, a vessel agent, without penalty, 
may request cancellation of a vessel's reserved transit slot and 
rescheduling of the vessel for regular transit or, alternatively, may 
request assignment of an alternate reserved transit slot, in the 
following situations:
    (1) If for whatever reason Canal authorities cancel or 
significantly delay the transit of a vessel booked for transit that is 
otherwise ready to proceed as scheduled;

[[Page 10000]]

    (2) If for whatever reason Canal authorities delay the transit of a 
vessel booked for transit to such a degree that the delay is likely to 
cause the vessel to be unable to meet its required arrival time for a 
later, second reserved transit, booked before the delay of the first 
reserved transit occurred; or
    (3) If a vessel is booked for transit on the assumption that the 
vessel will pay the booking fee prescribed by Sec. 104.6(a) or (b) but, 
subsequently, a change in traffic conditions occurs triggering the 
higher booking fee prescribed by Sec. 104.6(c).
    (b) A vessel booked for transit will be deemed to have transited 
the Canal on its reserved transit date if the vessel arrives at the 
first set of locks at either terminus of the Canal prior to 2400 hours 
that day and its in-transit time (ITT) is 18 hours or less. ITT begins 
when the vessel enters the first set of locks at either Canal terminus 
and ends when the vessel departs the last set of locks at the opposite 
terminus. No booking fee will be charged if ITT, through no fault of 
the vessel, exceeds 18 hours.


Sec. 104.9  Cancellations.

    (a) A vessel agent may cancel the transit reservation of a vessel 
by giving notice prescribed by Canal authorities. In such event, and 
except as otherwise provided, a cancellation fee will be charged. The 
amount of the fee will depend on the amount of notice (days or hours) 
received by Canal authorities in advance of the vessel's required 
arrival time, according to the following schedule:

------------------------------------------------------------------------
                                                 Cancellation fee  (the 
            Advance notice periods                    greater of)       
------------------------------------------------------------------------
31 days or more..............................  None.                    
30 to 11 days................................  20% of booking fee or    
                                                $500.                   
10 to 7 days.................................  40% of booking fee or    
                                                $750.                   
6 to 2 days..................................  60% of booking fee or    
                                                $1,000.                 
1 day to 8 hours.............................  80% of booking fee or    
                                                $1,200.                 
------------------------------------------------------------------------

    (b) Receipt of notice of cancellation of a transit reservation by 
Canal authorities after the vessel's required arrival time will result 
in levy of a cancellation fee equal to the entire prescribed booking 
fee.


Sec. 104.10  Regular Transits.

    Vessels not booked for transit will be scheduled for movement 
through the Canal on the date and in the order determined by Canal 
authorities. In establishing the daily schedule of vessels to be moved 
through the Canal, the order in which vessels arrive is only one of 
several considerations. In general, regular transits will equal or 
exceed in number, one-half the total number of daily vessel transits.


Sec. 104.11  Temporary Suspension of System.

    (a) Canal authorities may temporarily suspend, in whole or in part, 
for whatever period of time deemed necessary, the vessel transit 
reservation system established by this part, whenever Canal authorities 
determine that such action is necessary to ensure continued safe and 
efficient operation of the Canal.
    (b) No penalty or fee shall be levied against any vessel booked for 
transit whose reserved transit slot is cancelled by reason of a 
temporary suspension of the system pursuant to this section.


104.12  Further Implementation.

    In order to ensure safe and efficient operation of the system, 
Canal authorities may establish additional policies and procedures, 
define additional terms and issue clarifications and interpretations 
not inconsistent with the provisions of this part, which periodically 
will be published and distributed to Canal customers through notices to 
shipping or other appropriate means.

    Dated: February 28, 1997.
John A. Mills,
Secretary, Panama Canal Commission.
[FR Doc. 97-5396 Filed 3-4-97; 8:45 am]
BILLING CODE 3640-04-P