Expanding Globally Managing Greater Complexity

Transcription

1 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

2 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.

3 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

4 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.

5 IMPORTS 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. Start Container leaves port of origin Importer sends BL draft and invoice to customs broker Broker prepares and saves customs predeclaration and special requirements Container arrives at Panamanian Port Broker prepares customs declaration and pays taxes at bank End Container arrives at warehouse Trucker leaves port with container Trucker goes through container physical inspection Trucker goes into yard to pick up container Trucker goes to port and through customs doc inspection 4

6 RE-EXPORTS START Container arrives at Manzanillo Port Importer prepares paperwork Trucker goes to port and goes through doc inspection Trucker retrieves container at port yard Go to single window for paperwork processing and approval Arrange shipment, prepare export paperwork Product ready to be exported MANUFACTURING, ADDED VALUE, ORDER PROCESSING Container is cleared and unloaded Go to Free Zone s on-site customs to get container arrival clearance Return to free zone and go to onsite customs with container Customs verifies export paperwork against SIGA and places seal on container Trucker goes to port Trucker goes to port and gets carrier, government and port s clearance Trucker delivers container at port yard 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. Trucker returns to free zone to deliver documents END

7 EXPORTS Start Product is ready to be shipped Exporter sends BL BL draft draft and and copy copy of of invoice to to customs broker Broker generates Broker generates and prints export declaration, declaration, fills certificate of origin out certificate of and delivers docs origin to exporter and delivers docs to exporter Exporter prints draft and gathers all export documents Empty container arrives 48 h prior to ship departure Trucker takes stamped export documents to importer Trucker leaves port Trucker goes into yard to leave container and Port unloads container Trucker goes to port and through customs doc inspection and port office Exporter loads container and gives export paperwork to trucker Exporter gives documents to customs broker Broker takes documents to single window for processing export and returns docs to exporter End Exporter files documents 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. 6

8 Maritime Connectivity Panamanian Seaports Atlantic/Caribbean Pacific

9 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

10 Panama s Maritime Connectivity Min days selected from all existing services to that country destination 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

11 US to South America

12 Panama to South America

13 US to South America

14 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

15 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)

16 Panama to South America 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 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 Most services have a 7 day frequency (call once a week)

17 Luci Part I (Maritime Connectivity) From US and Panama to Central America, Caribbean and Northeast Coast of South America Ports and Min transit time

18 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

19 From Port Everglades To Central America, Caribbean and Northeast Coast of South America 16 Services Destination Min days 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 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

20 From Miami To Central America, Caribbean and Northeast Coast of South America 19 Services Destination Min days 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 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

21 From Jacksonville To Central America, Caribbean and Northeast Coast of South America 10 Services Destination Min days 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 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

22 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

23 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

24 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

25 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

26 From Panama To Central America, Caribbean and Northeast Coast of South America 41 Services (31 from Manzanillo) Destination Min days 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 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

27 Luci Part II (Maritime Connectivity) From US and Panama to the West Coast of South America Ports and Min transit time

28 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

29 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

30 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

31 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

32 Luci Part III (Maritime Connectivity) Port Connectivity Comparison

33 New York to the World

34 Norfolk to the World

35 Savannah to the World

36 Miami to the World

37 Port Everglades to the World

38 Panama to the World

39 Air connectivity

40 Connectivity for airfreight COPA DHL Indirect connections = 1 intermediate stop

41 Airfreight Connectivity (DHL) Destination country and airport M o Flights per day Tu W e Th Fr Sa Su Time (hours) Colombia El Dorado Intl :30 Costa Rica Juan Santamaría Intl :20 Ecuador José Joaquín de Olmedo Intl :00 Guatemala La Aurora :17 Honduras La Mesa Intl 1 1 2:07 Venezuela Simón Bolívar Intl :13 Arturo Michelena Intl 1 1 2:00 United States Cincinnati Northern Kentucky Intl (HUB) Miami :51

42 COPA Airfreight

43 Connectivity for Passenger Flights (may also carry cargo)

44 Added slides

45 Melissa slides

46 PANAMA LOGISTICS ASSETS Panama Canal Locks Sea Ports Airports Road Network 47 Special Economic Zones

47 MAIN CONTAINER PORTS Cristóbal CCT MIT PSA Balboa

48 LOGISTICS CLUSTER IN THE ATLANTIC AND PACIFIC

49 SPECIAL ECONOMIC ZONES Colon Free Zone Panama Pacifico Free Zones (Law 32)

50 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)

51 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 reexports 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)

52 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

53 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

54 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

55 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, submanufacturing 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

56 Logistics Opportunities in Free Zones Opportunity to relocate production and distribution points to increase speed and access to markets

57 Henri slides

58 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

59 Panama Cold Chain project 486 km from Panamá 80 km from Panamá 20 km from downtown Panamá 252 km from Panamá 32 km from Panamá 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

60 Cold Chain Markets and Post-Harvest Centers within Zones of Influence

61 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

62 Future infrastructure projects 4th bridge over the Pacific side of the Panamá Canal Adjudication: vehicle lanes and center light rail tracks Cost no yet determined Permit expansion of Metro lines to the West suburbs of the capital

63 Future infrastructure projects 3rd bridge over the Atlantic side of the Panamá Cal Anticipated opening: Q2, vehicle lanes Investment: $365 million

64 Future infrastructure projects Panamá Colon Container Port Investment: $900 million Capacity 2 million TEUs/year Area: 92 hectares Yard capacity: 36,000 TEUs Anticipated opening Q4, 2014 Corozal Container Port Investment: $600+ million Area: 120 hectares 2.5 km quay Anticipated opening: N?A

65 Future infrastructure projects Tocumen Airport South Terminal Investment: $700 million Area: 80,000 sq meters 20 gates Anticipated opening: Q4, 2016

66 Galores Cold Storage Solutions Tocumen Airport South Terminal Area: 28,000 sq. Meters 20,000 pallet positions 20 docking spaces Blast freezing tunnel

67 Panamá Ports Expansion Projects Pacific Side Balboa Port Panamá International Terminal Expansion of yard space Additional RTG equipment for yard 800m of additional berth 10 new PPX STS cranes Expansion of yard to manage an annual throughput of 2 Million TEUs.

68 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

69 Central America Pacific Corridor Tocumen Airport South Terminal 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

70 USPA PPT / slides

71 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

72 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

73 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 transportrelated 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)

74 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

75 Well Positioned Logistics Platform

76 Global Competitiveness Report (World Economic Forum) Venture Capital Availability Prevalence of Foreign ownership Country Availability of Ease of Access Capacity to financial service to Loans Attract Talent Soundness of banks Affordability of financial services Gov't procurement of Quality of port advanced tech infrastructure products 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 Finland Panama Norway Norway Norway Barbados Canada Luxembourg Bahrain South Africa United Kingdom Finland Dominican Rep Panama Canada Ireland Netherlands Finland Brazil Taiwan, China Oman Spain Spain Morocco U. Arab Emirates Hong Kong SAR N/A * Foreign Direct Investment (FDI)

77 Logistics Performance Index 2012 Center Action Lines PANAMA Performance by Category RANK Customs 74 Infrastructure 51 International shipments 79 Logistics competence 63 Tracking & tracing 57 Timeliness 56 61

78 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

79 Panama Platform Services Canal Transits Transshipment Re-export Export Import In-country logistics People mobility Tourism

80 Seaports Customs Airports Road network Panama Logistics Environment Panama Canal Panama- Pacifico Area Rail Road Colon Free Zone

81 82

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

83 Panama as Singapore slides

84 Annual Growth (%) Annual Growth (%) Economic Outlook 2009 Crisis influenced the world economic growth. The Panama Miracle 14 GDP Annual Growth: GDP Annual Growth: Year Latin America & Caribbean Panama World Source: World Bank (2013) World Data Base Year Argentina Brazil Colombia Panama Peru Source: World Bank (2013) World Data Base

85 Number of MHQ US Dollar Growth rate Panama s today vision Panama's GDP growth rate: 2008/ /2011 Panama is a growing economy Increasing direct foreign investment and Multinational Head Quarters Year Source: INEC, Contraloria General de la Republica (2013) Direct Foreign Investment in Panama: (million of US Dollar) 2500 Multinational Head Quarters established in Panama: Year Year Source: INEC, Contraloria General de la Republica (2013) Source: MICI, Multinational Head Quarters Office

86 Government s National Economic Plan Four Pillars Four Pillars Agroindustries Turisms Financial Services Logistics (Canal, Ports, Airport, SEZ, VAS)

87 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 Source: Singapore Economic Development Board (2010)

88 Comparing Singapore and Panama: what they have in common? Strategic geographic location Global & Regional connectivity Business & Finance Centers Attractiveness for Global Players

89 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.

90 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

91 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

92 ABB Analysis of using Panama as your logistics platform GT Panama Center helps companies to decide why to use Panama Information Needed * Description of company s operations and businesses * Information of products - amount - type - frequency * Questions to be answered * Future Plans Analysis that can be done * 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

93 Danna and William slides

94 Guatemala Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

95 Costa Rica Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

96 Panama Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

97 Brazil Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

98 Peru Imports &Exports * Source: Penta Transaction DB 2012 ** Source:

99 Uruguay Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

100 Chile Imports & Exports * Source: Penta Transaction DB 2012 ** Source:

101 Saturno slides

102 Panama s Free Trade Agreements Free Trade Agreement Commercial Agreement 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

103 Panama s Free Trade Agreements 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 EFTA : Europe Free Trade Association (Joint Declaration for Cooperation)

104 Panama s Free Trade Agreements STATUS U.S. - Panama Trade Promotion Agreement entered into force in October 31, 2012 Canada ADA Association Agreement betw een EU and Central America (28 countries) EFTA - Europe Free Trade Agreement (Iceland - Liechtenstein - Norw ay - Sw itzerland) South Korea Central America (Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, Panama) Mexico Colombia Cuba Dominican Rep. Aruba Trinidad and Tobago Israel Rep. of China (Taiwan) In force Signed In negotiation Source: Ministry of Commerce and Industry Peru ALADI: Latin America Integration Association ADA: Association Agreement between EU and Central America EFTA: Europe Free Trade Agreement Chile ALADI (13 countries) Argentina Brazil Bolivia Chile - Colombia Cuba Ecuador Mexico - Paraguay Peru - Venezuela Uruguay - Panama Vietnam Singapur

105