Because Colombian ports have a lower operating cost base than Panamanians, the South American country competes to appropriate the logistics business in the region.
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.
The Uber technological platform, which in Central America is currently transporting people and food, is planning to expand its service offerings to the freight transport business.
Uber and Uber Eats, platforms for transporting people and delivering prepared food, respectively, are already operating in the countries of the region. However, the U.S. company's new bet for Latin America is to use Uber Freight to transport cargo.
To be able to ship cargo throughout the region, Central American business leaders are exploring options for moving goods using alternative methods, such as shipping.
Representatives from the Costa Rican government and the union of exporters met to address the issue of blockades in Nicaragua and the logistical drawbacks that they have caused, since Costa Rica transports by land about five thousand containers to the other Central American countries every month. As a result of this meeting, both parties concluded that the most viable option is to use maritime transport.
I Panama companies warn that container traffic will drop if the implementation of the new tariffs for food import inspections are not stopped.
The Business Council Logistics (Coel) is concerned that if the new tariffs do come into force of on July 3, "... the window will open for other state institutions to suggest similar increases, putting at risk the second most important sector of the Panamanian economy after the Panama Canal. "
Free Zone users require another type of measures on top of the proposals the government has discussed in the Assembly, such as reducing the charges for renting.
The bill that was discussed in Congress and which seeks to increase the competitiveness of the Colon Free Zone (CFZ), (already approved in the first debate) is not enough for entrepreneurs. Marco Tellez, president of the Association of Users (AU), told Prensa.com that "...
In response to requests from the private sector, approval has been given to the creation of the Ministry for Competitiveness and Logistics, a dependency of the Ministry of the Presidency.
The main function of the new Secretariat will be to coordinate and propose, together with other public institutions, solutions for improving issues related to the economy logistics and competitiveness policy.
Businesses are complaining that upward adjustments in rates proposed by the Maritime Port Authority will make them less competitive.
Companies providing these services assert that the adjustments proposed by the Maritime Port Authority to the tariff regime amount to a 1,000% increase in the cost of the operating license. Currently this sector "... is going through a global adjustment process and if the rates for services increase, the cargo will be more expensive, as well as the logistics platform of the country."
Employers from the logistics sector support the government's decision to create an entity focused on the development of the sector, but are complaining about the lack of their participation in it.
Although it was the very same logistics sector that suggested to the government there was a need to create an institution or Secretariat to delineate strategies for the industry, employers are complaining that the government has not involved them in the issue.
Negotiations are being promoted with the US chain for the installation of a distribution center for Latin America in the Colon Free Zone.
Editorial
Panama reserves supermarket operations for local companies, so there could be confusion over the news report from Prensa.com, which states that "... Through a letter signed by Panamanian President Juan Carlos Varela, a group of businessmen, headed by the general manager of the Colon Free Zone (CFZ), Surse Pierpoint- are seeking to attract the attention of executives at Walmart US to install a distribution center for Latin America in Panama ", indicating the Colon Free Zone (CFZ) as 'the right place'."
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.
Central American countries need to implement a series of improvements in customs procedures in order to meet the requirements of the agreement for the facilitation of international trade.
Within two years, as part of the commitments made in the 2001 Doha Round of the Bali Agreement, signed in 2013 by 160 nations belonging to the World Trade Organization (WTO), including Central America, governments will have to harmonize their customs systems ensuring trade facilitation. However, to date institutional progress on issues established by the Agreement such as simplification, harmonization and automation of procedures for international trade have not happened, particularly in relation to the requirements and formalities for import, export and transit of border freight.
The business sector is proposing the creation of a government entity focusing on the long term development of logistics activities in the country.
Adopting logistics as a matter of state and implementing a long term national logistics strategy that takes into account all of the productive sectors involved is the proposal of the business sector to the incoming government.
The economic growth which will be generated by the canal expansion will increase the demand for skilled workers in the logistics industry.
Foreign trade, port planning and management, border management and maritime transport are some of the sectors that require skilled labor in the coming years in Panama.
Prensa.com reports that "Approximately 5000 experts will be required for the logistics sector over the next five years confirmed the president of the Logistics Business Council (Coel), Daniel Isaza".
Nearly 3 months after the award for the installation and operation of scanners at ports and customs office the cost for the service is still not known.
In the original statement of the tender which was awarded to the consortium McMillan, Ebco and Nuctech for $16.9 million it was proposed there be a percentage charged ad valorem on the country's exports and imports.
Between January and May this year 2,672,194 TEUs were transported while in the same period in 2012 the number was 2,895,544 TEUs.
Daniel Isaza, president of the Business Logistics Council (Coel), said that "from 2011 to 2012 growth went from 6.7 million TEUs to 6.8 million TEUs, for the end of 2013 we had expected growth in containers, but we all know that it will not happen. "
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