Logistics ParksH. Donald RatliffExecutive Director

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Logistics “Clusters”

A group of firms with logistics operations– Logistics service providers (e.g., transportation providers, storage providers

and freight forwarders)– Companies whose primary business is logistics operations (e.g., distributors

and light manufacturers)– Logistics operations of large firms (e.g., retailers and spare parts providers)– Logistics management, training, research and development (e.g., regional

headquarters, training facilities, research and development centers) Evolution of logistics clusters

– Unstructured groups located to take competitive advantages of being near transportation hubs (e.g., seaports, airports, rail terminals, customers or other logistics assets)

– Managed logistics parks (e.g., developed by real estate developers or government agencies often with special tax structures)

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Panama’s Current Logistics Parks

MIT Industrial Park – seaport

Colon Free Zone – seaport

Panama Pacifico – ?? Parque Sur – airport Las Americas Industrial

Park – airport Panama Logistics Park

– airport Costa Del Este – city

Parque SurCosta Del Este

Industrial Park

MIT Industrial Park

Panama Pacifico

Colon Free Zone

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Panama’s Logistics Clusters

Sea Port

Cluster

Sea Port

Cluster

Air Port Cluster

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Port-centric Logistics Parks

Leverage seaports and/or airports Types of port-centric parks

– Export-oriented (China)– Import-oriented (Los Angeles)– Transshipment-oriented (Singapore and Panama)

Keys to success of transshipment-oriented parks– Frequent services between port many other ports– Fast and dependable transshipments (no disruptions)– Competitive transshipment cost– Efficient connectivity between logistics park and port– Good and cost effective transportation between park and port– Limited bureaucracy to move products between park and port– Limited taxes and fees on product movements

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Current Panama Connectivity

Increasing opportunity– Shipments from/to Asia– Big main line ships– Transshipments via mega hub– Feeders to US east coast– Feeders to Central America– Feeders to South America– Feeders to Caribbean

Increasing challenge– Dependability of Panama

logistics network– Integration of ports and rail– Quality and cost of

transshipment

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Transshipment Port-Centric Logistics Parks Activities Storing and full and empty containers for export Storage, distribution, and inventory management for domestic or

international manufacturers, distributors and retailers (decrease inventory and improve response times)

Trans loading between sea or air containers and land transport units Packaging and packing products for export Freight forwarding and consulting services Quality control (inspection) and testing of products before being sent to

customers Light manufacturing tasks such as assembly and customizing to country-

specific adding parts and manuals Reverse logistics activities such returning empty packaging and the

recycling of used goods back into the commodity chain. Providing specialized storage facilities (e.g., to support cold chains) Provide research, education and training

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Advantages of Logistics Parks

Investment in public infrastructure (e.g., roads and internet) Investment in private infrastructure (e.g., warehouses and office

buildings) Ease of tenants getting started Role models (e.g., anchor tenants) Taxation Access to technology and services Research and education Ease of collaboration and knowledge exchange Asset sharing Land use Marketing

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Challenges for Atlantic Logistics Parks

Land use Road

connectivity Congestion Cost of local

container moves

New Terminal

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Challenges for Pacific Logistics Parks

Land availability near Balboa

Port at Corozal PSA port

– Road connectivity to Balboa– Rail connectivity to Colon

Bridge for truck and rail Rail capacity

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Challenges for all Panama Logistics Parks

Capacity limitations on Pacific Disruptions in port/rail/port

connectivity Cost to transship Rail connection fees and delays Canal connection fees Necessity for collaboration Nobody is in charge

Pacific Cluster

Atlantic Cluster

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Logistics Parks in Panama

Benefits– Employment creation – Attract capital investment– Increased distribution efficiency and lower costs to consumers– Encourage innovation– Increased trade – Reduced congestion and emissions

Challenges– Sustainable transshipment– Land availability– Planning and collaboration