Logistics: Business Stolen from Panama?

Because Colombian ports have a lower operating cost base than Panamanians, the South American country competes to appropriate the logistics business in the region.

Wednesday, February 27, 2019

Until a while ago, Panama led the logistics operations in the region, however, there are some signs that indicate that this situation could be changing, since the growth in the movement of maritime cargo in the country has reported a slowdown in recent years. For example, between 2016 and 2017 there was a 10% increase, and last year the reported rise was just 1.7%.

See "Logistics: Can Competitiveness Be Restored?"

Two of Colombia's main ports, Cartagena on the Atlantic and Buenaventura on the Pacific, are just a day's sail from the Panama Canal. Jorge Quijano, administrator of the Panama Canal, explained that "... during the period of the expansion of the Panama Canal both Colombian ports made investments of hundreds of millions of dollars to adapt and expand their infrastructure to be able to serve the neopanamax vessels that now transit through the expanded Canal."

Panama and Colombia, in addition to competing in the logistics sector, have a tariff dispute that dates back several years. The president of the Association of Users of the Colon Free Zone, Daniel Rojas, explained to Panamaamerica.com.pa that "... Colombia has no "interest" in resolving the tariff dispute it has with Panama, because it wants to enhance its free trade areas and "steal" the business."

Daniel Isaza, former president of the Logistic Business Council (Coel), said that Colombia has taken advantage of the expansion of the Panama Canal because "... They are focused on improving everything we have: ports, free zones or free-trade zones. They have taken advantage of modernization of systems, processes and human resource training. Also in the implementation of technology and data management. We must recognize that Panama is lagging behind and it is time to make transcendental decisions."

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More on this topic

Panama and Colombia Try to Resolve Tariff Dispute

June 2018

The business associations of both countries started working on a joint plan to solve a problem that has been causing them damage for the last six years.

Representatives from the Chamber of Commerce, Industries and Agriculture of Panama (Cciap) and members of the Chamber of Commerce of Bogotá, initiated talks to develop a joint plan to end the conflict that has affected them since 2012.

Logistics Panama: Change to Survive

October 2016

With a "roadmap" proposed for the next four years, the sector aims to improve conditions in the country as a logistics hub and compete better with other Latin American ports.

With the help of the CAF Development Bank, the sector of Panamanian logistics companies aims to develop a plan to improve the supply of services in the country and compete better with other logistics development poles that have improved their position in Latin America. One example is Colombia and its Cartagena and Buenaventura port terminals, explained Susana Pinilla, from the CAF.   ""...  The boats when docked in those ports do transshipment, which has access to value-added processes; or they serve the need for supplies. There is a robust supply of bunker, among other conditions referenced in catalogs on global logistics services. "

Obstacles in Panama Customs Offices

September 2014

Logistics companies and customs agents have reported inconsistencies in the application of standards and inefficiency and slowness in the computer systems that are used to carry out the processes.

Although the country is the main logistics hub in the region, employers and brokers have pointed out the presence of obstacles, such as poor management of the SIGA computer system, affecting services and preventing an improvement in the competitiveness of Panamanian trade abroad.

Extensive Damage Caused by Panama Ports Company Strike

April 2012

The direct costs incurred from diverting cargo to other ports, and the effect on Panama’s image as a safe logistical hub.

Maritime employers say that the economic losses are incalculable, but the greatest damage caused by the general strike by workers of the PPC is to Panama’s image.

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