LOGISTICS
Panama Pacifico
Maritime logistics hub P
anama Canal Authority (ACP) administrator, Alberto Aleman Zubieta, says ‘the expansion has had a clustering effect in
Panama where core services related to air, rail and sea are complemented by key financial, maritime, transportation, and legal business ventures and partnerships, among others.’
The Colon Free Trade Zone, located at the gateway to the Canal on the Atlantic- side, is already the second largest FTZ in the Western hemisphere and the convergence of all these sectors in Panama presents endless possibilities and yields a unique competitive advantage for the country which has registered economic growth of 7.2% in 2010 with forecast for 2011 between 8%-9% making Panama one of the best performers of the region. Panama’s renowned consulting firm INDESA considers that with adequate policies a genuine logistics industry could surge, supported by the maritime sector, and that both sectors could reach $10bn to $15bn [16% to 17% of Panama’s GDP] in 2025. INDESA estimates that the combined sectors could provide some 40,000 jobs in 2020 and up to 72,000 jobs in 2025. ‘Although these are rough figures, they give an idea of the opportunities generated by this new industry,’ says INDESA president and former Minister of Economy Guillermo Chapman who is member of the Panama Canal Authority board of directors. In addition to the Canal expansion, Panama’s world-class transhipment terminals – that handled a total of 5.6m teu in 2010 and showed an increase of 26.4% during the first half of 2011 – have become essential for transforming the Isthmus into a transportation and logistics hub of the Americas. The ports of Manzanillo International Terminal (MIT), Colon Container Terminal (CCT) and Cristobal have shown significant growth, because of the favourable economy experienced by Panama and Latin America. ‘We believe that Brazil will be our mini China over the next four years, added to that is the expansion of the Canal, which
PANAMA MARITIME REVIEW 2011/12
makes us think that the situation will be good,’ MIT gm Carlos Urriola says. MIT has built a 16ha logistics park and distribution centre for cargo consolidation and logistics activities offering added value to its clients, says MIT vp of marketing Juan Carlos Croston. MIT has built the infrastructure, giving warehouse companies the liberty to design tailoured solutions, while 5ha are reserved for heavy equipment redistribution and refurbishment.
The Colon Free Trade Zone is the second largest FTZ in the Western hemisphere.
‘When the economy is good people buy more cars, more buildings and heavy vehicles,’ explains Urriola, who believes in including value-added products that will generate new jobs. Parallel to the growth of ports, which during the first half of 2011 was nearly 30%, the railway has also seen growth in the movement of containers from Balboa to Colon and vice versa.
‘If Panama becomes a logistics hub for the Caribbean, Central and South America, it would attract more vessels [in addition to vessels taking on bunkers in Panama] that would use other ancillary services, such as the shipyards. This would make Panama, not only a transit area but a maritime logistics hub,’ says global bunkering company CEPSA gm Javier De La Rosa.
Addressing the Council of Supply Chain Management Professionals (CSCMP) Annual Global Conference, the ACP vp of market research and analysis featured keynote speaker Rodolfo Sabonge, described how strategic planning of the global supply chain will need to change and how the post-Panamax vessels transiting the future expanded waterway will have entirely new routes available
thereby reducing commodity prices. However, with the potential to be the next great hub for global supply chains and to compete with the likes of Singapore and the Netherlands, Panama will need to improve its logistics performance by investing in technology and people. As a result, well regarded universities are also setting up in Panama.
In 2010, the Supply Chain and Logistics Institute of Georgia Tech launched the Logistics Innovation and Research Centre in Panama City. The Massachusetts Institute of Technology and its Colombian affiliate, the Centre for Latin American Logistics Innovation, have also announced their intent to open an education centre in Panama. Currently, in the country, more than 50 multinational companies from around the world are operating and have relocated their regional headquarters to Panama. The listing of multinationals that have established their regional headquarters in Panama reads like an international business directory. The Panama-Pacific (Panama Pacifico) Special Economic Area (the former US Howard Air Force base) being developed by UK’s London and Regional Properties Panama (L&R), has helped to boost investment and numerous foreign companies are taking advantage of the duty free facilities. Panama Pacifico has created synergies for the maritime and other sectors of the economy that have attracted logistics companies aiming to take advantage of the future canal expansion. Providing the transport network continues to be developed as planned, the vision of Panama as a logistics hub for the Americas has every chance of succeeding in its aims. More than 30 international and local companies, including Wartsila, MEC Stores and Shipyard, a Colombian printing plant, and several shipping agencies are already on location or have re-located to Panama Pacifico because it offers a legislation granting companies favourable legal, tax, customs, labour and worker immigration regulations. •
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