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Panama: logistic capital of the Americas

Monday, November 28, 2016

Being the logistic capital of the Americas is not easy

The Suez Canal route - shorter than the Panama option by some 4,000 kilometers - may get a major share of traffic, as maritime trade grows between the East coast of the United States and Southeast Asia, mainly Indonesia, Malaysia, Thailand and Vietnam.

As far as air transport is concerned, several Boeing and Airbus aircraft can connect any West European city with any city in Latin America, without a stop-over in Panama.

Meanwhile, Panama-based Copa Airlines could be affected by the start this year of low-cost competition in Central America.

On the other hand, Panama is the shortest route between China and the Eastern United States.

Chinese exports to the United States last year were worth $500 billion, nearly ten times more than the total of Indonesia, Malaysia, Thailand and Vietnam

China - US traffic via Panama is likely to grow, as the expanded canal, inaugurated last June, takes ships carrying up to 6,240 containers.

Previously, ships with more than 2,250 containers had to go through Suez.

From Hong Kong or Shanghai, the distance to New York is around 1,000 kilometers shorter via Panama than Suez.

The difference is even greater when it comes to ports in the southeastern United States.

To attract additional traffic for transhipment in the region and for free-zone production, Manzanillo International Terminal will invest some $270 million to expand its facilities at the Atlantic side of the canal.

The terminal operation is a joint venture between Carrix, a United States-based logistics company, and a Panamanian consortium led by key investors in Copa Airlines.

Meanwhile, APM Terminals, CMA CGM, and PSA International have been approved to bid on a container terminal at Corozal on the Pacific side.

APM is a subsidiary of Danish-based Maersk Group, the world’s largest container shipper.

Marseille-based CMA CGM is the third largest container company.

PSA, formerly known as Port of Singapore Authority, participates in more than 60 port operations worldwide.

In relation to air transport, stock market are bullish on Copa, which last month  launched Wingo, a low-cost airline, with operations mainly in Central America and Colombia.

Copa stock was valued at $92 at the end of last week, compared to $52 a year earlier.

Panama’s Tocumen International for its part has more connections to the Caribbean and South America than any other airport.