“Expanding Globally – Managing
Greater Complexity”
Session 6:
Panama: A Hub for Expansion
into the Americas
Dario Solis Georgia Tech Panama
Logistics Innovation and Research Center
Panama: A Hub for Expansion into the Americas
• Track: Expanding Globally Managing Greater Complexity
• Description: With the strengthening of the Central and South
American markets, and trade agreements with many countries in
those regions (including the Caribbean), Panama is bolstering its
reputation as a regional Distribution Center for the Americas.
• Panama’s geographic location and existing resources mean that it is
poised to become one of the most important trade hubs in the area.
• You will hear from experienced professionals and discover the
challenges and opportunities involved in centralizing your regional
distribution center operations in Panama.
Content
• Global Supply Chain Management Trends
• Reaching Latin America
• Panama’s Logistics and Transportation
System
• Trade Facilitation in Latin America
• North-South Trade Opportunities
• Final Remarks and Discussion
2
BASIC PROCESS DESCRIPTIONS
Import, Export, Re-export in Panama
Key processes are mapped with the objective
of giving visibility to users and suggesting ways
to streamline and make them more efficient.
For inbound and outbound logistics operations
of an international DC in Panama, knowing
these processes well is of great importance
together with the corresponding processes at
origin and destination.
IMPORTS
Broker prepares and saves customs pre-
declaration and special requirements
Container leaves port of
origin
Importer sends BL draft and invoice to
customs broker
Broker prepares customs declaration
and pays taxes at bank
Trucker goes to port and through customs
doc inspection
Container arrives at Panamanian Port
Trucker goes into yard to pick up container
Trucker leaves port with container
Start
End Trucker goes through container physical
inspection Container arrives at
warehouse
Customs brokers issue a pre-declaration and comply with special requirements
(this will depend on product type). When cargo arrives, brokers issue the
declarations and pay taxes at the National Bank. Importers will then need the
declarations and bills of lading to go through all government inspections and
retrieve cargo at the point of entry.
4
START Container arrives
at Manzanillo Port
Importer prepares
paperwork
Trucker goes to port and goes through doc inspection
Go to Free Zone’s on-site customs to
get container arrival clearance
Trucker retrieves container at port
yard
MANUFACTURING, ADDED VALUE,
ORDER PROCESSING
Arrange shipment, prepare export
paperwork
Go to single window for paperwork processing and
approval
Return to free zone and go to on-site customs with
container
Trucker delivers container at port
yard
Customs verifies export paperwork against SIGA and
places seal on container
Trucker goes to port and gets carrier, government and port’s clearance
Trucker returns to free zone to
deliver documents
END
Container is
cleared and
unloaded
Product
ready to be
exported
Trucker
goes to port
This process uses a Goods Movement Declaration document. This form validated
by customs officials registers all goods going in, out and through the special zone.
On-site customs offices at Free Zone facilities check documentation and carry out
goods inspection. They keep control by using a D6 form and a metal seal. This
form registers all non-nationalized cargo entering Panama roads network to be
moved from one customs location to another.
RE-EXPORTS
EXPORTS
Exporter prints draft and gathers
all export documents
Exporter loads container and gives export
paperwork to trucker
Product is ready to be
shipped
Exporter sends BL draft and copy of
invoice to customs broker
Broker generates and prints export declaration, fills out certificate of
origin and delivers docs to exporter
Empty container arrives 48 h prior
to ship departure
Trucker goes to port and through
customs doc inspection and
port office
Trucker goes into yard to leave container and Port unloads
container
Trucker leaves port
Trucker takes stamped export documents to
importer
Exporter gives documents to
customs broker
Broker takes documents to
single window for processing export and returns docs
to exporter
Exporter files documents
Start
End
Exports require a declaration of goods, certificate of origin and any other special
requirements (depending on the product type). Exporters or truckers will take all
documentation to port, go through document inspection and leave container at port
yard. Exporters will then need to take documentation to Single Window to register the
transaction at the Ministry of Commerce.
Exporter prints draft and gathers
all export documents
Exporter loads container and gives export
paperwork to trucker
Exporter sends BL draft and copy
of invoice to customs broker
Broker generates declaration,
certificate of origin and delivers docs
to exporter
6
Maritime Connectivity
• Panamanian Seaports
• Atlantic/Caribbean
• Pacific
Maritime connectivity
• 1914 Panama Canal Inauguration
• 1999 Panama Canal under Panamanian
Administration
• Sea Ports given in Concession
• New Ports in Development
• 2007 Panama Canal Expansion Project
Panama’s Maritime Connectivity
Country Min days
Costa Rica 0
Grenada 0
Honduras 1
Venezuela 1
Cuba 1
Dominican Republic 1
Colombia 1
Ecuador 1
Jamaica 1
Guyana 1
United States 2
Guatemala 2
Puerto Rico 2
Peru 2
Curacao 2
El Salvador 3
Nicaragua 3
Bahamas 4
Aruba 4
Trinidad & Tobago 4
Mexico 5
Chile 6
Brazil 7
Haiti 7
Guadeloupe 8
French Polynesia 10
Canada 10
Country Min days
Netherlands 11
Spain 12
Germany 12
Italy 13
Belgium 13
Sweden 13
Ireland 14
United Kingdom 14
Morocco 14
Bonaire 15
Russia 16
Fiji 17
France 18
New Zealand 18
Suriname 19
Turkey 19
Japan 20
South Korea 20
New Caledonia 20
Australia 21
China 22
Taiwan 23
Portugal 23
Ukraine 23
Uruguay 35
Argentina 37
Algeria 37
Egypt 38
Lebanon 39
Malaysia 45 Min days selected from all existing services
to that country destination
US to South America
Panama to South America
US to South America
Panama to South America
Panama has better
connectivity to the West Coast
(15 services)
There are some services to
the Northeast Coast, but
only one service to the East
Coast
US to Panama
Origin country and port
Services to Panama Min transit time
(days)
United States
Charleston SC 8 3
Savannah GA 8 3
Miami FL 5 3
New York NY/NJ 11 4
Jacksonville FL 3 4
Port Everglades FL 6 5
Norfolk VA 5 5
Baltimore MD 2 5
Los Angeles CA 4 7
Freeport TX 1 7
Oakland CA 4 8
Houston TX 2 8
Gulfport MS 1 8
Long Beach CA 1 8
Wilmington DE 1 9
Philadelphia PA 2 10
Tacoma WA 2 11
Seattle WA 1 13
Portland OR 1 17
Most services have a 7 day frequency (call once a week)
Panama to South America
Most services have a 7 day frequency (call once a week)
Destination country and port Services from Panama Min transit time
(days)
Colombia Buenaventura 7 1 Cartagena, Colombia 10 1 Santa Marta 2 1 Barranquilla 3 2
Venezuela La Guaira 3 1 Puerto Cabello 5 2 Puerto Sucre 1 4 Maracaibo 1 6 Guanta 1 8 El Guamache 1 19
Guyana Georgetown, Guyana 1 1
Curacao Willemstad 3 2
Ecuador Guayaquil/Puerto Bolivar 8 2
Peru Paita 4 2 Callao 9 4
Destination country and port Services from Panama Min transit time
(days) Brazil Macapa 1 7 Manaus 2 10 Vila do Conde 1 17 Recife 1 26 Santos 1 31 Paranagua 1 40 Itajai 1 42
Chile Valparaiso 3 9 San Antonio 6 11 San Vicente 4 12
Suriname Paramaribo 1 19
Uruguay Montevideo 1 35
Argentina Buenos Aires 1 37
Luci Part I (Maritime Connectivity)
• From US and Panama to
Central America, Caribbean and
Northeast Coast of South America
– Ports and Min transit time
From Houston To Central America, Caribbean and Northeast Coast of South America
9 Services
Destination Min days
Guatemala
Santo Tomas de Castilla 3
Dominican Republic
Caucedo, Dom Rep 4
Costa Rica
Puerto Limon 4
Bahamas
Freeport, Bahamas 5
Colombia
Cartagena, Colombia 5
Barranquilla 7
Jamaica
Kingston 7
Puerto Rico
San Juan PR 7
Panama
Cristobal, Panama 8
Manzanillo, Panama 15
Honduras
Puerto Cortes 9
Venezuela
Puerto Cabello 15
La Guaira 22
From Port Everglades To Central America, Caribbean and Northeast Coast of South America
Destination Min days
Bahamas Freeport, Bahamas 1 Nassau, Bahamas 1
Cuba Havana 1
Jamaica Kingston 2 Montego Bay 3
Honduras Puerto Cortes 2
Guatemala Puerto Barrios 3 Santo Tomas de Castilla 3
Dominican Republic Rio Haina 3
Aruba Aruba 3
U.S. Virgin Islands St Thomas VI 3 St Croix VI 4
Costa Rica Puerto Limon 3
Bonaire Bonaire, Kralendijk 4
Colombia Cartagena, Colombia 4 Barranquilla 7 Santa Marta 8
Destination Min days
Panama Manzanillo, Panama 5 Almirante 5 Balboa 29
St Lucia Castries, St Lucia 5
St Vincent and the Grenadines Kingstown, St Vincent 5
Haiti Port-au-Prince 5
Venezuela Puerto Cabello 5 La Guaira 6 El Guamache 10 Maracaibo 11
Curacao Willemstad 5
Trinidad & Tobago Point Lisas, Trinidad 6
Grenada St George's, Grenada 7
Barbados Bridgetown, Barbados 8
Guyana Georgetown, Guyana 8
Suriname Paramaribo 10
16 Services
From Miami To Central America, Caribbean and Northeast Coast of South America
19 Services
Destination Min days
Dominican Republic Rio Haina 2 Boca Chica 3 Caucedo, Dom Rep 4 Puerto Plata 4
Guatemala Santo Tomas de Castilla 2 Puerto Barrios 3
Jamaica Kingston 2
St Maarten St Maarten-Philipsburg 3
Honduras Puerto Cortes 3
Panama Manzanillo, Panama 3 Balboa 3 Cristobal, Panama 4
Bahamas Freeport, Bahamas 4
Costa Rica Puerto Limon 4
Belize Belize City, Belize 4
Destination Min days
St Kitts and Nevis Basseterre, St Kitts 4
Antigua & Barbuda St John's, Antigua 5
Colombia Cartagena, Colombia 5 Barranquilla 6 Santa Marta 7 Puerto Bolivar, Colombia 8
Trinidad & Tobago Point Lisas, Trinidad 6
Barbados Bridgetown, Barbados 6
Puerto Rico San Juan PR 6
St Lucia Vieux Fort, St Lucia 8
Suriname Paramaribo 9
Guyana Georgetown, Guyana 10
Haiti Port-au-Prince 10
Guadeloupe Pointe-a-Pitre, Guadeloupe 10
From Jacksonville To Central America, Caribbean and Northeast Coast of South America
10 Services
Destination Min days
Bahamas Freeport, Bahamas 2 Nassau, Bahamas 3
Puerto Rico San Juan PR 2
Jamaica Kingston 3 Montego Bay 21
Panama Balboa 4 Manzanillo, Panama 9
Guatemala Puerto Barrios 5
Aruba Aruba 5
U.S. Virgin Islands St Thomas VI 5 St Croix VI 6
Dominican Republic Rio Haina 5
Bonaire Bonaire, Kralendijk 6
Haiti Port-au-Prince 7
St Lucia Castries, St Lucia 7 Vieux Fort, St Lucia 9
Destination Min days
Venezuela Puerto Cabello 7 La Guaira 9 El Guamache 28
Honduras Puerto Cortes 7
St Vincent and the Grenadines Kingstown, St Vincent 7
St Maarten St Maarten-Philipsburg 8
Trinidad & Tobago Point Lisas, Trinidad 8
Costa Rica Puerto Limon 9
Grenada St George's, Grenada 9
Guyana Georgetown, Guyana 10
Barbados Bridgetown, Barbados 10
Guadeloupe Pointe-a-Pitre, Guadeloupe 11
Colombia Barranquilla 14 Cartagena, Colombia 15
Curacao Willemstad 23
Suriname Paramaribo 28
From Savannah To Central America, Caribbean and Northeast Coast of South America
15 Services
Destination Min days
Bahamas
Freeport, Bahamas 1
Jamaica
Kingston 2
Panama
Manzanillo, Panama 3
Balboa 5
Colon, Panama 10
Dominican Republic
Caucedo, Dom Rep 4
Rio Haina 6
Guatemala
Santo Tomas de Castilla 8
Puerto Rico
San Juan PR 8
Honduras
Puerto Cortes 9
St Maarten
St Maarten-Philipsburg 9
St Lucia
Vieux Fort, St Lucia 10
Barbados
Bridgetown, Barbados 11
Guadeloupe
Pointe-a-Pitre, Guadeloupe 12
From Charleston To Central America, Caribbean and Northeast Coast of South America
11 Services
Destination Min days
Bahamas
Freeport, Bahamas 1
Panama
Manzanillo, Panama 3
Balboa 4
Colon, Panama 8
Cristobal, Panama 8
Jamaica
Kingston 4
Colombia
Cartagena, Colombia 5
From Norfolk To Central America, Caribbean and Northeast Coast of South America
11 Services
Destination Min days
Bahamas
Freeport, Bahamas 3
Guatemala
Santo Tomas de Castilla 5
Panama
Manzanillo, Panama 5
Colon, Panama 6
Balboa 6
Honduras
Puerto Cortes 6
Jamaica
Kingston 6
Dominican Republic
Rio Haina 8
Caucedo, Dom Rep 10
Puerto Rico
San Juan PR 10
St Maarten
St Maarten-Philipsburg 11
St Lucia
Vieux Fort, St Lucia 12
Barbados
Bridgetown, Barbados 13
Guadeloupe
Pointe-a-Pitre, Guadeloupe 14
From New York To Central America, Caribbean and Northeast Coast of South America
19 Services
Destination Min days
Panama
Colon, Panama 4
Manzanillo, Panama 6
Balboa 8
Cristobal, Panama 11
Bahamas
Freeport, Bahamas 4
Dominican Republic
Puerto Plata 5
Rio Haina 6
Caucedo, Dom Rep 8
Jamaica
Kingston 5
Montego Bay 10
Puerto Rico
San Juan PR 5
Colombia 9
Cartagena, Colombia 9
Haiti
Port-au-Prince 12
St Maarten
St Maarten-Philipsburg 13
St Lucia
Vieux Fort, St Lucia 14
Barbados
Bridgetown, Barbados 15
Guadeloupe
Pointe-a-Pitre, Guadeloupe 16
From Panama To Central America, Caribbean and Northeast Coast of South America
41 Services (31 from Manzanillo)
Destination Min days
Grenada
St George's, Grenada 0
Costa Rica
Puerto Limon 0
Dominican Republic
Caucedo, Dom Rep 1
Rio Haina 4
Puerto Plata 5
Jamaica
Kingston 1
Montego Bay 5
Colombia
Cartagena, Colombia 1
Santa Marta 1
Barranquilla 2
Cuba
Havana 1
Venezuela
La Guaira 1
Puerto Cabello 2
Puerto Sucre 4
Maracaibo 6
Guanta 8
El Guamache 19
Honduras
Puerto Cortes 1
Guyana
Georgetown, Guyana 1
Destination Min days
Puerto Rico
San Juan PR 2
Curacao
Willemstad 2
Guatemala
Santo Tomas de Castilla 2
Puerto Quetzal 4
Puerto Barrios 4
El Salvador
Acajutla 3
Nicaragua
Corinto 3
Aruba
Aruba 4
Trinidad & Tobago
Point Lisas, Trinidad 4
Port of Spain, Trinidad 12
Bahamas
Freeport, Bahamas 4
Haiti
Port-au-Prince 7
Guadeloupe
Pointe-a-Pitre, Guadeloupe 8
Bonaire
Bonaire, Kralendijk 15
Suriname
Paramaribo 19
Luci Part II (Maritime Connectivity)
• From US and Panama to the
West Coast of South America
– Ports and Min transit time
From Port Everglades To the West Coast of South America
1 Service
Destination Min days
Ecuador
Guayaquil/Puerto Bolivar 8
Peru
Callao 11
Chile
San Antonio 16
San Vicente 17
Colombia
Buenaventura 27
From Charleston To the West Coast of South America
2 Services
Destination Min days
Ecuador
Guayaquil/Puerto Bolivar 9
Peru
Callao 12
Colombia
Buenaventura 13
Chile
San Antonio 17
San Vicente 18
Arica 19
Coronel 24
From New York To the West Coast of South America
2 Services
Destination Min days
Ecuador
Guayaquil/Puerto Bolivar 13
Colombia
Buenaventura 16
Peru
Callao 16
Chile
San Antonio 21
Arica 22
San Vicente 22
Coronel 27
From Panama To the West Coast of South America
15 Services (10 from Balboa)
Destination Min days
Colombia
Buenaventura 1
Ecuador
Esmeraldas 1
Guayaquil/Puerto Bolivar 2
Peru
Paita 2
Callao 4
Matarani 10
Chile
Iquique 6
Arica 7
Mejillones 8
Valparaiso 9
San Antonio 11
Coronel 11
San Vicente 12
Luci Part III (Maritime Connectivity)
• Port Connectivity Comparison
New York to the World
Norfolk to the World
Savannah to the World
Miami to the World
Port Everglades to the World
Panama to the World
Air connectivity
Connectivity for airfreight
http://logistics.gatech.pa/en/assets/airports/connectivity/#/cargo
Indirect connections = 1 intermediate stop
COPA DHL
Airfreight Connectivity (DHL)
Destination country and airport
Flights per day Time (hours) M
o Tu
We
Th Fr Sa Su
Colombia El Dorado Intl 1 1 1 1 1 1 1:30
Costa Rica Juan Santamaría Intl 1 1 1 1 2 1 1:20
Ecuador José Joaquín de Olmedo Intl 1 1 1 1 1 1 3:00
Guatemala La Aurora 1 1 1 1 1 2:17
Honduras La Mesa Intl 1 1 2:07
Venezuela Simón Bolívar Intl 1 2 1 2 1 1 2:13 Arturo Michelena Intl 1 1 2:00
United States Cincinnati Northern Kentucky Intl (HUB) 1 1 1 1 1 Miami 1 2 1 1 1 1 2:51
COPA Airfreight
Connectivity for Passenger Flights (may also carry cargo)
Added slides
Melissa slides
PANAMA LOGISTICS ASSETS
47
Sea Ports
Airports
Panama Canal Locks
Road Network
Special Economic Zones
MAIN CONTAINER PORTS
Cristóbal CCT MIT
PSA Balboa
LOGISTICS CLUSTER IN THE ATLANTIC AND PACIFIC
• Colon Free Zone
• Panama Pacifico
• Free Zones (Law 32)
SPECIAL ECONOMIC ZONES
SPECIAL ECONOMIC ZONES
• Colon Free Trade Zone
– Established on 1948
– Biggest free zone in the
Western Hemisphere
– 1680 acres
– $19 Billion commercial
activity (import and exports)
Special Economic Zones
• Colon Free Trade Zone – No sales tax, no production tax.
– Tax exemption on income derived
from abroad.
– No tax or duty on imports to or re-
exports from the Free Zone to
foreign countries.
– Income tax for companies
established in the Colon Free Zone
is the same one that applies at
the national level (1% over total
yearly income)
Special Economic Zones
• Panama Pacifico
– Former U.S. military base
(Howard)
– 3,460 acres
– At Pacific Entrance of the
Panama Canal
– Mixed Real Estate (Industrial
and Residential)
– World-class commercial and
business hub capitalizing on its strategic location
Special Economic Zones
• Panama Pacifico
– One-Stop Shop
– Special Immigration and Labor Standards
– Special Custom Regime
– Tax Incentives
– Investment Stability Law
– Single Registration
– Training Center
Logistics Opportunities in Free Zones
• Reductions on transportation costs by establishing free zones closer to
ports, airports or railroad
• Establishing free zones closer to local sources (suppliers, raw materials,
etc.)
• Fiscal exemptions enable:
– Importing and exporting goods without paying duties
– More competitive final goods
– Improve velocity of movement through customs
• Special labor provisions allow for:
– Reduction of labor cost due to more flexible provisions and migratory incentives
• Opportunities to locate in areas that will allow for future expansion
Logistics Opportunities in Free Zones
• Cluster development– dedicated to products or activities
• Warehousing – storage capacity
– Seek low costs for building or leasing warehousing space
– Flexibilty to design facilities based on specific needs
• Market specialization services (kitting, labeling, sub-manufacturing or assembly, repackaging, localization of
product features, etc.)
• Inventory – Postponement, Cross-docking, Service and Parts
distribution, Customer Service programs
• Transportation–transhipment, consolidation, direct store
delivery for select markets
• Improve service levels
Logistics Opportunities in Free Zones
• Opportunity to relocate production and distribution points to increase speed and access to markets
Henri slides
Panama Metro Project
• $1.88 billion for line 1 to be operational Q1, 2014
• Lenght: 14km
• Extension project for line 1 to be completed Q4, 2014
• Line 2 project to be awarded Q4, 2013
• Initial capacity: 15,000 per hour each way
Panama Cold Chain project
• Improve quality, distribution and longevity of perishable food products
• Investment: $288 million
• 4 post harvest centers(Volcan, Cerro Punta, Dolega, El Ejido)
• 5 markets(David, Chitre, Panama, Chorrera, Colon)
• Planned completion Q1, 2014 and fully operational Q3, 2014
252 km from Panamá
486 km from Panamá 80 km from Panamá 20 km from downtown Panamá
32 km from Panamá
Cold Chain Markets and Post-Harvest Centers
within Zones of Influence
Panama Road System improvements
• Via Brazil interconnect to North and South corridors
• 4th of July and Albrook tunnels and overpasses
• Via Tocument expansion to 6 lanes
• Cinta costera phase 3
• Panamá Colon freeway
• Total investment of around $1 billion
Future infrastructure projects
• 4th bridge over the Pacific side of the Panamá Canal
• Adjudication: 2014
• 6 vehicle lanes and center light rail tracks
• Cost no yet determined
• Permit expansion of Metro lines to the West suburbs of the capital
Future infrastructure projects
• 3rd bridge over the Atlantic side of the Panamá Cal
• Anticipated opening: Q2, 2015
• 6 vehicle lanes
• Investment: $365 million
Future infrastructure projects
• Investment: $900 million
• Capacity 2 million TEUs/year
• Area: 92 hectares
• Yard capacity: 36,000 TEUs
• Anticipated opening Q4, 2014
Panamá Colon Container Port Corozal Container Port
• Investment: $600+ million
• Area: 120 hectares
• 2.5 km quay
• Anticipated opening: N?A
Future infrastructure projects
• Investment: $700 million
• Area: 80,000 sq meters
• 20 gates
• Anticipated opening: Q4, 2016
Tocumen Airport South Terminal
Galores Cold Storage Solutions
• Area: 28,000 sq. Meters
• 20,000 pallet positions
• 20 docking spaces
• Blast freezing tunnel
Tocumen Airport South Terminal
Panamá Ports Expansion Projects Pacific Side
Balboa Port
• Expansion of yard space
• Additional RTG equipment for yard
Panamá International Terminal
• 800m of additional berth
• 10 new PPX STS cranes
• Expansion of yard to manage an annual
throughput of 2 Million TEUs.
Panamá Ports Expansion Projects Atlantic Side
Colon Container Terminal:
• New berth No. 4 and dredging to
16m depth
• Additional land concession to
expand yard capacity
Cristobal Port
• 8 ha of new yard space
• Additional yard equipment
Manzanillo International terminal
3 new berths
38 ha additional yard space to
increase yearly throughput to 4
Million TEUs
Additional yard and berth equipment
Central America Pacific Corridor
• 3,200 km from Panamá to Puebla, Mexico
• Investment: $2.5 billion
• Travel time: 48 hours from Panamá to Mexico
• Estimated completion: 2018
• Will reduce travel time from 9 to 2 days
• 72% of EU exports to Central America trucked
from Panama
Tocumen Airport South Terminal
USPA PPT / slides
Definition of Logistics Platform
• “a defined area within which all activities relating to transport, logistics and the distribution of goods, both for national and international transit, are carried out by various operators. It must encourage intermodal transport … served by a multiplicity of transport modes (road, rail, deep sea, inland waterway, air)… run by a single body, either public or private, … equipped with all the public facilities to carry out the above mentioned operations”. European Association of Freight Villages EUROPLATFORMS
http://www.freight-village.com/definition.php
Logistics Platforms Types
• Unimodal distribution centres – storage facilities for managing product flows and
stocks
– operated by one or several firms, and do not necessary involve joint operations
– typically ground transportation only
• Logistic areas
– involve integrated operations, stock consolidation, local and re- directioning activities…include traffic concentration and freight division points for switching to different transport modes…enabling geographical (or distribution) postponement and cross-docking activities
– Typically air or maritime freight centers
Logistic Platforms Types
• Multimodal Logistics Platforms – logistic nodes connecting different modes of
transport, emphasising added value services and not the specific transport modality used
– also known as hubs, which are usually linked to ports, in order to make the most of scale economies on international routes
– Their nodal function does not only include transport-related activities but also national and international logistics and distribution
– They are generally run by several operators
– Due to the large volumes handled and their excellent locations, they enable the implementation of nearly all different postponement strategies (geographic, manufacture and assembly)
Why Panama?
• Panama has a great potential to become the Trade Hub
of the Americas
• Ideal geographical position
• Well positioned to consolidate exports from Latin America to North America, Europe and Asia
• A natural regional distribution center for Latin America
• Excellent maritime and aerial connectivity for efficient, timely and safe movement of people and cargo
• World-class logistics assets – Panama Canal, two ocean seaport operations, free zones and
special economic areas, road and rail transportation, Tocumen International Airport, etc.
• Long term economic growth and political stability
• Thriving financial sector
Well Positioned Logistics Platform
* Foreign Direct Investment (FDI)
Global Competitiveness Report 2013-2014
(World Economic Forum)
12 11 10 10
2013-2014
2012-2013
Venture Capital Availability
Prevalence of Foreign
ownership
Country Capacity to
Attract Talent
Availability of financial service
Ease of Access to Loans
Soundness of banks
Affordability of financial services
Gov't procurement of advanced tech
products
Quality of port infrastructure
Quality of air transport
infrastructure
Business impact of rules
on FDI
Mobile Telephone
Subscriptions
FDI and technology
transfer
RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY RANK COUNTRY
1 Hong Kong SAR Luxembourg Switzerland Switzerland Qatar Canada Hong Kong SAR Qatar Netehrlands Singapore Ireland Hong Kong SAR Ireland 1
2 Qatar Hong Kong SAR Singapore South Africa Hong Kong SAR New Zealand Luxembourg Singapore Singapore Hong Kong SAR Sinagapore Kuwait U. Arab Emirates 2
3 United States Singapore Qatar Hong Kong SAR U. Arab Emirates South Africa Qatar U. Arab Emirates Hong Kong SAR U. Arab Emirates Hong Kong SAR Gabon Panama 3
4 Norway United Kingdom United Kingdom Luxembourg Singapore Hong Kong SAR Singapore Malaysia U. Arab Emirates Netehrlands Luxembourg Panama Qatar 4
5 Sweden Czech Republic Hong Kong SAR Singapore Malaysia Singapore Switzerland Rwanda Finland Panama Panama Saudi Arabia Singapore 5
6 Singapore Ireland United States United Kingdom Oman Finland Finland Saudi Arabia Panama Finland Bahrain Russian Fed Costa Rica 6
7 Malaysia Slovak Republic U. Arab Emirates United States Bahrain Panama Panama Panama Belgium Switzerland Rwanda Suriname Luxembourg 7
8 Israel Australia Luxembourg Finland Panama Norway Norway Taiwan, China Iceland Germany U. Arab Emirates Oman Saudi Arabia 8
9 Taiwan, China New Zealand Canada Canada New Zealand Australia Bahrain Israel Germany Norway Mauritius Montenegro Lithuania 9
10 U. Arab Emirates Estonia Panama Panama Sweden Chile United States Brunei Darussalam Sweden France Chile Kazakhstan Bahrain 10
11 Finland Panama Norway Norway Norway Barbados Canada Luxembourg Bahrain South Africa United Kingdom Finland Dominican Rep 11
12 Panama Canada Ireland Netherlands Finland Brazil Taiwan, China Oman Spain Spain Morocco U. Arab Emirates Hong Kong SAR 12
8 7 7 7 6 5 5 4 3
17 9 N/A 4 12 4 2 11 4 6 5 2 3
RANK
Customs 74
Infrastructure 51
International shipments 79
Logistics competence 63
Tracking & tracing 57
Timeliness 56
Logistics Performance Index 2012
PANAMA
Performance by Category
Center Action Lines
61
Improvement Process
• Determine where we are through the development of a
baseline and models that take into account all Panama logistics assets and servicies
• Define and evaluate logistics performance index and
compare Panama to world leaders
• Articulate main country level logistics services and their relation with logistics assets and individual logistics services
• Identify bottlenecks and technological gaps in all processes
associated to country level logistics services
• Consolidate research results with best practices captured
through the NLC collaboration platform and in this way
proceed to validate proposed actions for the Logistics
Cabinet
• Assess impact of actions and begin the process again
Panama Platform Services
• Canal Transits
• Transshipment
• Re-export
• Export
• Import
• In-country logistics
• People mobility
• Tourism
Seaports
Airports
Panama Canal
Rail Road
Colon Free Zone
Panama-Pacifico Area
Road network
Customs
Panama Logistics
Environment
82
Final Remarks
• Improved Panama´s Competitiveness Performance Year to Year
• Excellent set of Logistics Assets that is in expansion
• Serving local, regional and global markets
• Essential Government-Industry collaboration model for growth being implemented
• Analytical capacity to support decision making is being developed with the support of Georgia Tech Panama Logistics Innovation and Research Center
• Great opportunity for Global and Regional Supply Chain Optimitzation that will result in new value adding activities for Panama and the Region
Panama as Singapore slides
Economic Outlook
Source: World Bank (2013) World Data Base
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2007 2008 2009 2010 2011
An
nu
al G
row
th (
%)
Year
GDP Annual Growth: 2007 - 2011
Argentina Brazil Colombia Panama Peru
Source: World Bank (2013) World Data Base
-4
-2
0
2
4
6
8
10
12
14
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
An
nu
al
Gro
wth
(%
)
Year
GDP Annual Growth: 2003 - 2011
Latin America & Caribbean Panama World
2009 Crisis influenced the world economic growth. The “Panama Miracle”
Panama’s today vision
• Panama is a growing
economy
• Increasing direct
foreign investment
and Multinational
Head Quarters
0
500
1000
1500
2000
2500
3000
2007 2008 2009 2010 2011
US D
olla
r
Year
Direct Foreign Investment in Panama: 2009 - 2011(million of US Dollar)
Source: INEC, Contraloria General de la Republica (2013)
10.1
3.9
7.5
10.8
10.7
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Gro
wth
rat
e
Year
Panama's GDP growth rate:
2008/2007 - 2012/2011
Source: INEC, Contraloria General de la Republica (2013)
Source: MICI, Multinational Head Quarters Office
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013
Nu
mb
er
of
MH
Q
Year
Multinational Head Quarters established in Panama:
2007-2013
Government’s National Economic Plan – Four Pillars
Four Pillars
• Agroindustries
• Turisms
• Financial Services
• Logistics
(Canal, Ports, Airport, SEZ, VAS)
Some facts
• 17 of top 25 global 3 PLs have a significant presence in Singapore
• World’s 2nd Logistics Hub (World Bank, 2010)
• World’s easiest place to do business (World Bank, 2010)
• 90% of electronic permit applications processed within 10 minutes
• All physical cargo cleared within 13 minutes • Changi International Airport is served by over 80 airlines
operating over 4500 weekly schedule flights linking Singapore to 200 cities in 60 countries.
• PSA Singapore Terminal handle about one-fifth of the world’s total container transshipment throughput. Over 25 million TEUs in 2009.
Source: Singapore Economic Development Board (2010) www.sedb.com
Comparing Singapore and Panama: what they have in common?
• Strategic geographic location
• Global & Regional connectivity
• Business & Finance Centers
• Attractiveness for Global Players
Comparing Singapore and Panama: In what they differ?
• Singapore looks toward one ocean with all ports next to each other, facilitating transshipment Panama deals with 2 oceans requiring interconnection (rail/road) which is sensitive to externalities.
• Panama has 15 years in port expansion and 10 in aviation. Singapore has over 50 years orienting its economy as a global platform.
• National Strategy for utilizing resouces and developing capabilities in a long term agenda.
• Cultural differences.
Need for Efficiency and Competitiveness
Decision making process must be supported by Thought
Leadership, and Scientific and analytical thinking to
improve capacity and quality of the services.
All process should be efficient and less bureaucratic
Supported by new technologies: e-commerce and e-
logistics
All stakeholders are part of an integrated system, therefore
for a continuous process: collective knowledge
Final Comments
• Historical opportunity for developing a
logistics platform and trade
• Improvement will be driven by emerging
I+D+i, this requires Public and Private sector
support
• This PP relationship need formal and
structured forums for a continuous discussion
• Information is valuable for the decision
making process
• Define short, medium and long term
strategies for national scale up
ABB email Analysis of using Panama as your logistics platform
• GT Panama Center helps companies to
decide why to use Panama
* Description of company’s operations and businesses * Information of products - amount - type - frequency * Questions to be answered * Future Plans
Information Needed * Logistics analysis of maritime distribution network between 2 ports * Origin and destination * Inbound logistics needed * Assembling operations * Logistics Services available * Distribution analysis * Maritime Connectivity (liner services) * Logistics processes for imports and re-exports in Panama * Estimation of time/cost to ship inventory to/from Panama
Analysis that can be done
Danna and William slides
Guatemala Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Costa Rica Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Panama Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Brazil Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Peru Imports &Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Uruguay Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Chile Imports & Exports
* Source: Penta Transaction DB 2012 ** Source: http://www.ustr.gov/countries-
regions/americas
Saturno slides
Panama’s Free Trade Agreements
In America
• Canada
• USA (Trade Promotion Agreement)
• Central America
o Guatemala
o Honduras
o Nicaragua
o El Salvador
o Costa Rica
• Cuba
• Dominican Republic
• Trinidad and Tobago
• Colombia
• Peru
• Chile
Commercial Agreement
Free Trade Agreement
Rest of the world
• Taiwan
• Singapore
• Israel
• Vietnam
• EFTA - 4 Countries
o Norway
o Iceland
o Switzerland
o Liechtenstein
• ADA - 27 countries
Association Agreement
between EU and Central
America
Panama’s Free Trade Agreements
EFTA : Europe Free Trade Association (Joint Declaration for Cooperation)
South Korea
EFTA - Europe Free Trade Agreement
(Iceland - Liechtenstein - Norw ay - Sw itzerland)
Singapur
Rep. of China
(Taiwan)
Peru
Cuba
In force
Signed
In negotiation
Central America (Costa Rica,
El Salvador, Honduras,
Guatemala, Nicaragua,
Panama) Colombia
Canada
Trinidad
and Tobago
Chile
Aruba
Source: Ministry of Commerce and Industry
Dominican Rep.
ADA Associat ion Agreement
between EU and Central
America (28 countries)
ALADI (13 countries)
Argentina
Brazil
Bolivia
Chile - Colombia
Cuba
Ecuador
Mexico - Paraguay – Peru
- Venezuela – Uruguay -
Panama
Panama’s Free Trade Agreements STATUS
Israel
Mexico
Vietnam
ALADI: Latin America Integration Association
ADA: Association Agreement between EU and Central America
EFTA: Europe Free Trade Agreement
U.S. - Panama Trade Promotion Agreement
entered into force in October 31, 2012