Since the discovery of the Pacific coast of Panama, visionaries dreamed of one day creating a great passageway from the Atlantic to the Pacific, thus avoiding the 12,000-mile journey around the tip of South America. That day finally came in August of 1914, after decades of planning and excavation. Although only 40 miles from shoreline to shoreline, the ingenuity and tenacity of the canal's creators are evident with each and every movement of this magnificent lake-and-lock-type canal. It's bound to be a voyage you will never forget.
The Panama Canal extends approximately 80 km. (50 miles) long from Panama City on the Pacific Ocean to Colon on the Caribbean Sea. It is widely considered to be one of the world's great engineering achievements. The United States is the largest user of the Canal in terms of cargo tonnage, as either port of origin or destination, although Asian countries are beginning to close the gap. Ships bound for Japan from the East Coast of the United States save about 3,000 miles by going through the Canal; ships sailing from Ecuador to Europe save about 5,000 miles.
Panama has one of the most advanced airport infrastructures in Latin America. Given its position, the Tocumen International Airport has become a hub for the Americas connecting North and South America, the Caribbean and Europe. Tocumen International Airport is home for COPA Airlines, the largest Panamanian Airline, and has more than 20 other actively operating airlines including Lufthansa, Air China, United, Turkish, Delta, American and more. The Tocumen International Airport is expanding at an unprecedented rate. Tocumen International Airport is the regional hub for several commercial and cargo airlines. It connects passengers and moves cargo to more than 34 countries and 84 destinations all around the world. For connecting flights, there were approximately 15.6 million passengers that used Tocumen International Airport in 2017, a growth of 5.93 % from previous year. The cargo terminal itself handled over 174,098 tons of cargo with a large proportion being transshipment. The expansion programs will provide more capacity to both passenger and cargo terminals allowing a larger number of aircrafts, cargo and passengers to use our country as a connecting point to the world. It is the home port for Copa Airlines.
When concluded the airport expansion will count with:
Regarding regional flights, the local network includes six more international airports, as well as 24 landing strips that allow passengers and a small volume of cargo to move around Panama easily and safely.
This cargo movement through air has prompted an unprecedented development of logistics parks and warehousing centers near the Tocumen airport.
The Tocumen International Airport Multimodal Zone is part of the airport expansion which aims to strengthen the airport´s strategy to modernize the cargo terminal and develop the first airport free trade zone. The project was launched in late October and over 16 international companies have already shown interest in the project. The surface of the first phase is 180.000 sq meters with the possibility of expanding to more than 300.000 sq meters of urbanized plots for the development of logistics warehouses. The Zone will be regulated under the same legal regime of Law 32 of 2011, which establishes legal regime for Free Trade Zones.
Panama has a network of state-of-the-art seaports that provide a variety of services to containerized, bulk, liquid and general cargo, as well as to passengers in cruise terminals.
Panama has several seaports in the Atlantic area mainly serving the East Coast of North and South America, and the Caribbean: Manzanillo International Terminal (MIT), Cristobal-Panama Ports Company (PPC), Colon Container Terminal (CCT) and Colon Port Terminal (CPT). At the Pacific area, the port of Balboa is currently the only terminal performing container’s handling service. Both, Balboa and Cristobal are being operated by Panama Ports Company, members of the Hutchinson Port Holdings. A new container seaport is being under construction at the Balboa area by the name of PSA Panama International Terminal, as part of the Port of Singapore group.
Also, two additional ports provide commercial services to containerized cargo: Bocas Fruit Co. terminal at Almirante and Rambala terminal at Chiriqui Grande both located at the northwestern part of Panama in the province of Bocas del Toro. These ports handle bulk and general cargo, but the container segment is dedicated to the reefer liner service of banana exports.
There is one Cruise Terminal in the Atlantic of Panama named Colón 200 and a second terminal is in the process of construction in the Pacific side, near the Canal and Panama City in Amador.
A new generation of LNG Terminals are being developed by different companies. See our chapter on Petroleum.
The small size of Panama allows a close interaction among different assets: seaports, airports, railroad, special economic zones and the local market. This condition facilitates the establishment of specialized and dedicated areas for warehousing and other third-party logistics operations that leverage the accessibility to world class transportation services and trading tradition. The multimodal logistics industry grew at a rate of 8,35% from 2006 to 2016 and the growth has continued with more infrastructure available.
Logistics parks are being developed as a new model of logistics integration in Panama where specialized operators take advantages of the existing platform. Other potential areas are being promoted and segregated to provide business opportunities and to attract new companies to set up operations for storage and distribution in the country.
One of the biggest is the new port of Corozal by the Panama Canal Authority (ACP). Though they are still working on a project to start its development, the ACP has recently announced that it expects to issue a new bid invitation during the year 2019 for prequalification and tender negotiations. The Corozal project will be developed in two stages; first they will construct a 1350-meter dock and a container park, then they will construct a second dock of 731 meters.
The international airport of Tocumen is in the process of development and promoting a free trade zone located at the cargo terminal. The plan to develop a new cargo terminal with value added logistic services is foreseen to be crystalized in the next 6 months.
Tocumen Airport will release tenders to increase the number of shops at the airport as they’ve planned to increase their capacity from 8.5 million to 10 million passengers.
Other investment projects promoted by the IDB and the Government of Panama are:
Free Trade Zone Incentives
Companies established within one of these zones receive the same benefits as those established for the Colon Free Zone, the Special Area of Panama Pacifico and of the Trade Zones in General. Below are some of those benefits:
Special immigration regime, which consist of:
Special labor conditions, which provide more flexibility than the companies in the rest of the country:
If you want to set up a business or investment in Ports, Airports or Logistics Parks, we can provide you our well-known One Stop Shop services since we have licensed real estate agents, excellent lawyers, insurance specialists, investment advisors and other professionals to assist you on all your business needs.
We can help you with:
For more information, please contact us.
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