The tendency to reduce costs in logistics: Panama

Panama has been considered a logistic point since its discovery in 1513. Its location and native design give it incomparable and unrepeatable geographical advantages. First of all, it has access to two seas: the Atlantic and Pacific oceans are 80 kilometers away. The geographical location of Panama in the center of the Americas unites the North with the South and the West with the East; These characteristics allowed the construction of the Panama Canal and its subsequent expansion. With the construction of the Canal, multiple international developments followed, which gave the country fame for being the center of commercial activities such as banking and finance, insurance, international trade, communications and distribution. The development of Free Zones in Panama has allowed the establishment of regional headquarters and multinational companies dedicated to the logistics business. Additionally, fiscal, labor and commercial incentives packages have been instituted to promote the establishment of foreign corporations in the country. Panama has the most modern and efficient port infrastructure, interoceanic rail, transisthmian highway, airports in the Pacific and the Atlantic, air hub for both passengers and cargo, which allows the development of competitive international logistics business. It is important to note that its commercial and geographic positioning has opened the doors to Panama to the markets of the Americas, Asia and Europe.

We currently observe that there is a continuing interest, as well as an increase in investment, in the logistics business by national developers and international investors. New development areas for logistics parks are being established in different parts of the country. In the Atlantic area, there are sectors developed specifically for logistics activity with models that integrate expedited reception, release and clearance of goods, specialized storage service and cross docking. In the Pacific area, we find logistics sectors within the city of Panama and its surroundings.

In 1948, what is currently considered the largest free zone in the Americas and the second in the world was founded: the Colon Free Zone. Given the advantages that Panama has for the logistics sector, in recent years we have seen a transformation not only in the legal field that allows the establishment of more free zones, but also in the same commercial sector, since there is currently a boost in the construction of free zones for the establishment of companies focused on the production of goods and services, high-tech manufacturing, distribution, scientific research, higher education, as well as logistics, environmental, and health services.

It can not be denied that logistics services are efficient in Panama because of its legal framework, and the fiscal incentives granted by it, as well as its geographical position. In addition to this, the expansion of the Panama Canal promises to change the flow of world trade and with it, the logistics business. The reduction of transportation costs and time classifies Panama as the main protagonist of this new commercial flow structure.