太平洋沿岸巴拿馬和中美洲港口競爭力分析

全文

(1)國立臺灣師範大學管理學院管理研究所. Graduate Institute of Global Business and Strategy National Taiwan Normal University. Competitiveness Analysis of Panama and Central America Ports in the Pacific Littoral 太平洋沿岸巴拿馬和中美洲港口競爭力分析. 裴安東 Jorge Antonio Rivera Perez 60456018o 指導教授：林舒柔博士 Advisor: Lin, Shu-Jou Ph.D.. 中華民國108年02 February, 2019.

(2) ABSTRACT. Maritime trade is a very significant key in the economic and technological development of any country, there are many factors that directly influence the competitiveness of ports and the growth of them over time. The purpose of this research paper is to carry out an analysis of the competitiveness between the ports on the Pacific Littoral of Central America, been more specifically Balboa in Panama and its main competitors in the Pacific Littoral. ECLAC classified the maritime transportation logistic sector in the Pacific littoral as fast growing and developing. This classification demonstrates the different factors that are making Balboa the first in the area. The methodology used is based on interviews done to ports services experts in the public and private sectors. Result show that the Panama is the leading competitor in the Pacific Littoral, but transshipment has been decreasing dramatically in the last 5 years. The main factors being: cost, quality of services and the lack of policies at the government level that allow boosting port development in the country.. Keywords: Port competitiveness, Port competition, factors, port, Pacific littoral, container, transshipment.. i.

(3) TABLE OF CONTENT ABSTRACT …………………………………………………………………...…..i TABLE OF CONTENT ……………………………………………….................ii LIST OF TABLES...……………………………………………………………...iv LIST OF FIGURES………………………………………………………....……..v. Chapter One Introduction ………………………………………………...............1 1.1.. Introduction Background ………………………………………………1. 1.2.. Research Motivation ……………………………………………….......5. 1.3.. Research Objectives……………………………………………………6. Chapter Two Literature Review ……….………………………………………....7 2.1. Literature Review…..……………………………………………………...8 2.2. Main Port Competitiveness Research Topics and Method………….……10 Chapter Three Methodology ………………………..…………………………...14 3.1. Secondary Data……..……………………………………….……………14 3.2. Primary Data………….…………...……………………………………...15 3.2.1 Interview main questions…………………….……...……………...16. Chapter Four Research Background …………………………………………...17 4.1. Panama Port system Administration…..………………………………….17 4.1.1. Port of Balboa……...……………………………………………..20 4.1.2 Balboa Port Operator….....………………………………………..20 4.1.3 Balboa Port Operation…...………………………………………..21 4.1.4 Panama International Terminal (PSA)............................................22. ii.

(4) 4.1.5 Manzanillo International Terminal (MIT) ……...………………...22 4.1.6 Cristobal-Panama Ports Company (PPC) ……….………………..23 4.1.7. Colon Container Terminal (CCT) ………………………………..23 4.2 Pacific Littoral traffic statistics…………………...…………..………24 4.2.1. Ports of Balboa…………………………………………………...26. Chapter Five Result………………………………………………………………30 5.1 External Factors……………….……………………………………...30 5.1.1 The expansion of the Panama Canal and the effects on the regional environment…………………………………………………………….31 5.1.2 Port competition………………………………………………….31 5.1.3 Development of shipping companies and alliances………………32 5.2 Internal Factors………………………………………………………..33 5.3 Expert Interview Results…………………………………………...…34. Chapter Six Conclusion…..………………………………………………………43. REFFERNCES…………………………………………………………...………47. iii.

(5) LIST OF TABLES. Table 1. Ports Ranking. The Top 20 in Latin America and the Caribbean (Yearly Data 2014 to 2017)……….……..…………………………………………………..5 Table 2. Panama National Port System(SPN)……………………………………...22 Table 3. TEU’s total mobilized – main Pacific ports in the pacific littoral.……….31 Table 4. Number of ships arriving to the Panamanian port system………………..32 Table 5. Load operation in the Panamanian port system…………………………..33 Table 6. Containers received in Panamanian ports by type - Full and Empty containers comparison. (2016-2018)……………………..………………………..34 Table 7. Rolling cargo operation in the Panamanian port system……………..…...35 Table 8. Mega Shipping Alliance…………………………………………………..38. iv.

(6) LIST OF FIGURES. Figure 1. Ports Ranking. The Top 20 in Latin America and the Caribbean in 2017 ECLAC………………...………………………………………………………….…4 Figure 2. Value Net - Bandenburger and Nalebuff (1996) ………..…………...….10 Figure 3. Input and outcomes LPI Indicators - Trade Logistics in the Global Economy P7……………………………….…………………………………….…20 Figure 4. Panama Dry Channel………………………………………….…………45 Figure 5. Routes of the shipping lines (2006)....…………………………………...47 Figure 6. Routes of the shipping lines (2018)……………………………………...48 Figure 7. Routes of the shipping lines (2010)……………………….…………...49. v.

(7) CHAPTER ONE INTRODUCTION Maritime transportation is one of the oldest known. It allows the transportation of large quantities of goods, over long distances and at cheap prices. Panama is a Central American country that has a great advantage over the rest. Panama Maritime-Logistics sector has been able to operate with great organization and initiative, as well as having the privilege of being the owner of the Panama Canal, which is the main source of maritime and logistics from the country. The shipping and maritime services industry has a promising future in Panama. It is probably the sector with the greatest potential for economic growth in the country. 1.1 Introduction Background In 2017, the containerized cargo movement in the ports of Panama grew 7.9%, despite the slowdown experienced by the ports located on the Pacific littoral. Extracted from the report of the Panama Maritime Authority (AMP)1. The report highlights that from January to December 2017, the six ports mobilized a total of 4,050,175 containers, a positive variation of 295,516 containers, more than the 3,754,659 transported during the twelve months of 2016. In recent statistical studies delivered by ECLAC (Economic Commission for Latin America and the Caribbean), Panama presents a more accelerated and constant growth compared to the economies of the others Latin America countries, having as its main advantage in the port system which is supported by the Panama Canal and its free zones.. 1. http://www.amp.gob.pa/newsite/spanish/planificacion/2017/diciembre1/F63%20Mov%20de%20Cont%20%20en%20el%20SPN%20En%20UNIDADES%20segun%20puertos(.pdf. 1.

(8) Panama has the best logistic performance index in the Latin American and Caribbean region in reference with the logistic performance report presented by the World Bank (LPI). However, the statistics of the AMP, shows that the ports located on the Pacific Littoral of Panama: International Terminal (PSA) and Panama Ports Company (PPC Balboa) jointly mobilized 42.7% of the total containerized cargo, while the other ports concentrated on the Atlantic Littoral mobilized 57.2% of the business. From here we can say that the cargo movement on the Pacific littoral remarkable slowdown. In the case of PSA, a port terminal located on the west side of the Pacific entrance to the Canal, the AMP data reveals that it mobilized a total of 44,488 containers, representing a 51.2% decrease compared to the previous year. When it had registered 91,076 containers. Meanwhile, the port of Balboa, administered by PCC, last year moved a total of 1,687,029, representing a decrease of 1.2%, when compared to the previous year, when its port cranes coordinated the loading and unloading of 1,707,901 containers. Figure 1, shows the representative map that is included in the bulletin Ports Ranking - Top 20 in Latin America and the Caribbean Ports, carried out by ECLAC, the report focuses on comparing the infrastructure levels, service, logistic capacity, technologically and social value that the ports present in their respective countries. Table 1, shows the Top 10 from the ECLAC Top 20 ranking published from 2014 to 2017, The Ports of Balboa in Panama occupy positions #3, Manzanillo (Mexico) #4, Callao (Peru) #6, Guayaquil (Ecuador) #7 and San Antonio (Chile) #10 respectively in 2017. Figure 1. Ports Ranking. The Top 20 in Latin America and the Caribbean in 2017 Source: ECLAC. 2.

(9) Table 1. Ports Ranking. The Top 20 in Latin America and the Caribbean (Yearly Data 2014 to 2017) 3.

(10) Source: ECLAC 2017 Atlantic Littoral Port Country Position Colon Panama 1st Santos Brazil 2nd Cartagena Colombia 5th Kingston Jamaica 8th Buenos Argentina 9th Aires. Pacific Littoral Port Country Balboa Panama Manzanillo Mexico Callao Peru Guayaquil Ecuador San Antonio Chile. Position 3rd 4th 6th 7th 10th. Atlantic Littoral Country Position Brazil 1st Panama 2nd Colombia 5th Jamaica 8th Argentina 9th. Pacific Littoral Port Country Balboa Panama Manzanillo Mexico Callao Peru Guayaquil Ecuador San Antonio Chile. Position 3rd 4th 6th 7th 10th. Atlantic Littoral Country Position Brazil 1st Panama 2nd Colombia 4th Jamaica 8th Argentina 9th. Port Balboa Manzanillo Callao Guayaquil. Pacific Littoral Country Panama Mexico Peru Ecuador. Position 3rd 5th 6th 7th. Port Balboa Manzanillo Callao Guayaquil. Pacific Littoral Country Panama Mexico Peru Ecuador. Position 1rd 4th 6th 8th. 2016 Port Santos Colon Cartagena Kingston Buenos Aires 2015 Port Santos Colon Cartagena Kingston Buenos Aires Freeport. Bahamas. 10th. 2014 Port Colon Santos Cartagena Kingston Buenos Aires Freeport. Atlantic Littoral Country Position Panama 2nd Brazil 3rd Colombia 5th Jamaica 7th Argentina 9th Bahamas. 10th. 4.

(11) 1.2 Research Motivation Port competition indicators are showing how the container shipping market has been changing year by year Theo Notteboom and Wei Yim Yap, 2012, as many others competitions in the International trade. Concentration, alliance of the shipping companies and liberalization of the sea transport industry has influenced. In addition, the regular practices of port competition have changed, and the Central America Pacific littoral is not the exception, ports services need to fit into the door to door supply change demand. Terminal operating companies (TOCs) and port authorities have had to expand and improve the services that they provide to shipping companies. It is proven by many reasons. The primary and major factor being the need of costs reduction of the door to door service. The second major factor, to feed the demand and increase of cargo volume and ship sizes, which increases the demand of land space. This research study is made of port competition between two principal ports on the Pacific Littoral in Central America, Panama (Balboa) - leader in the littoral, and Mexico (Manzanillo) - main competitor since 2016, which is gaining not only in shipping service rate but also in volume of transshipment. Based on the ranking developed by ECLAC and the position of the Port System in the Pacific Littoral, Balboa from 2015 started to lose transshipment volume while the others on the area has shown a representative growth, from here the research question is stablish as following: Why is not the transshipment in the Pacific Littoral of Panama growing?. 5.

(12) Panama is a country well known for being a hub for connections and merchandise crossings. The service sector is the main source of income for the country and, as mentioned before, the maritime logistics service in Panama is the source of many jobs and the growth of companies that provide services to the different needs of the ports. 1.3 Research Objectives The focus of this study is to provide basic information not only to the different port administrations but also to the customs services, maintenance and legal services throughout Panama and Central America, in order to encourage planning since the loss of cargo in ports has a greater impact on companies added to port services.. 6.

(13) CHAPTER TWO LITERATURE REVIEW 2.1 literature Review In this literature review, as others research related to the neighbor ports competitiveness and cooperation reviewed, the main points highlighted depended on their geographical region, port infrastructure and services offer to the shippers and shipping companies for the specific trade routes. However, as the factors that influence the ports competitiveness could be varies, this will depend on the port and type of traffic analyzes or different perspective addressed. Tai, Hui-Huang., 2005, Tongzon and Heng, 2005 and Helen A. Thanopoulou & Anthony K. C. Beresford, 2010 remark the importance of the geographic position, infrastructure and prices charged for services as the top three principal factors. Key highlighted point form Notteboom (2008), n.d. give important factor focusing on logistic chain and ports upgrades for better service and competitive prices. Important relevant research findings have been obtained from studies that approach transport selection, Magan M. Sammons A. 2008, 2014, Professor D John Mangan, Professor Chunnilal Lalwani, 2002, as many others with different choice models like the one used by Malchow, M. and Kanafani, A. (2004); Tiwari, Piyush & ITO, Hidekazu & Doi, Masayuki, n.d. The importance of location of the place of origin or destination turn out to be the most important factor in port selection, Malchow and Kanafani, 2004. Second, the product. 7.

(14) mobilized characteristics such as value density and refrigeration necessity or not, influence port choice Malchow and Kanafani, 2004. This is understandable as different goods have different time sensitivity, Peter W. De Langen and Athanasios A. Pallis, n.d. Third, the number of ship and routes offered by ports are relevant Tiwari, P. Itoh, H., and Doi, M. – 2003. Also, shipping alliances, growing of vessels sizes and globalization raise the international competition between ports, forcing ports to improve. Figure 2, Bandenburger and Nalebuff (1996), suggest a value net concept as the ones used in some strategic games, were several players are identified. Although the original concept was proposed for companies, it can be taken into the port competitive industry. Figure 2. Value Net Source: Bandenburger and Nalebuff (1996). Suppliers (Governmet, Private Investors, others). Complementors. Company. Complementors. (other Ports). (Port). (other Ports). Customers (Shipping companies, Cargo owners, Agents, others.. 8.

(15) Bandenburger and Nalebuff (1996), remarked that sometimes by letting your competitors succeed is the best way to success, to promote coopetition (competitive and cooperative) with vision to a win-win opportunity. James Wang, Brian Slack, 2004 in their study mentioned that when ports are in the same littoral or region and not managed by the same firm or authority, competition may be expected. This research aims to analyze, the competitiveness between Balboa Port in Panama and Manzanillo Port in Mexico, analyzing the quality of the services provided, cooperation with the private and public sectors, and the influence of these sectors in the port activities or ground mobilization of containers. After, identify the communication technologies, port infrastructure and megastructures as some of the major factors that determine competitiveness in the industry of container traffic. Latterly, many researchers have been adding to their work different method highlighting that business are willing to pay higher prices in exchange to high quality service. Murphy and Hall (1995), mentioned that cost is not as important as the quality of the service, and emphasized three trends that shippers and shipping companies consider at the time of selecting a port: reliability as the principal consideration, time of delivery of goods and finally a preference of a shipping company. Malaga and Sammons (2008), identified several qualitative (service quality or reputation of the port) and qualitative (freight and transit time of goods and ship at the port). The literature in this study points out that the services provided by ports is not only based in how efficient it can be in its capacity. Also, other complex factors as connectivity, accessibility to markets, level of integration in the supply change and total cost per service are becoming more and more important. 9.

(16) Chang, Y., Lee, S., Tongzon (2008), agree on the existence of qualitative and quantitative factors, but they argue that the major shipping lines consider the cost per service more than the Feeders. 2.2 Main Port Competitiveness Research Topics and Method Recently studies related to ports competition and coopetition implemented different methods to analyze the factors that influence and impact in the world containerize trade market. These studies found that the method used for this research is not that common. On the list below introduce the main paper research used as models. Main Port Competitiveness Research Topics and Method: The study carried by Acosta, Manuel & Coronado, Daniel & Del Mar Cerban, Ma, 2011. (Acosta, 2011), named Bunkering competition and competitiveness at the ports of the Gibraltar Strait. The method used by Acosta in his research paper was like the method applied in this research study. With the difference being that Acosta focused on the factors that determine the competitiveness between the ports of the Gibraltar Strait (Ceuta – Spain, Gibraltar – British Overseas Territory, Algeciras – Spain) of fuel supply. The methodology is based on questionnaires and interviews focused in the interaction between public and private institutions involved in the port services. The results reveal that port operators influence shipping company choice of bunkering port. Geographical advantage and cost are the main factors founded in the Gibraltar Strait. Other important factors were identified related to the cost and quality of services, including port supply waiting time, tariffs, service rates, restrictive environmental regulations and customs.. 10.

(17) Another case study with the tittle of Competition and Collaboration among Container Ports. The Asian Journal of Shipping and Logistics by Hoshino, Hiroshi. (2010). Until the 1980s Japan had the major ports in East Asia, however the fast growth of the ports in China and the enhancement of port facilities in Korea has had a huge impact on the major Japanese ports, making them limited to serve as only feeder ports. This research focused in how Japan build a strategy to response to this market change in the container cargo movement. Japanese ports needed to start to collaborate with each other rather that compete. For example, the ports located on Osaka Bays start to join with the ports in Tokyo. It was even suggested that ports should be managed by the same authority to strengthen their respective positions. Wei Yim Yap, Jasmine S. L. LAM & Theo Notteboom (2006) on the paper called Developments in Container Port Competition in East Asia, Transport Reviews, 26:2, 167188. This research guides and shows us how the competitive dynamics between the principal ports in East Asia were studied by analyzing their extent and intensity. Computerized data starting from 1970 and ending 2001 of container mobilized for the ports of Yokohama, Tokyo, Taichung, Hong Kong, Kaohsiung, Pusan, Osaka, Nagoya, Kobe, Keelung. Cointegration tests were used to determine the long-run relationship between pairs ports and short run inter-port competitive dynamics. The results reveal that for the past three decades Hong Kong and Pusan are beneficiaries from inter-port competition in the region. The study highlights that the alliance between shipping lines intensify the competition of the ports located near, also that inter-port competition in the region would increase in the future as the container center cargo volume shifts to mainland China.. 11.

(18) Non-Price Competition in the Port Sector: A Case Study of Ports in Turkey. International Association of Maritime Economists Conference by Esmer, Soner & Nguyen, Hong-Oanh & Bandara, Yapa & Yeni, Kazım. (2016). Although the port competition has increase year by year, the amount of studies about the topic has been limited. The few papers and research mainly focused on market structure, marketing aspect, and others focused on non-price competition strategies. This paper’s main objective was conducted to study the combination marketingeconomic perspective, evaluating their effect on the port sector and various aspects of nonprice competition. The author proposed and analytical framework on non-price competition, mentioning the external and internal factors that can affect port competition. Port competitiveness from the users' perspective: An analysis of major container ports in China and its neighboring countries, a research studied by Yuen, Chi-lok Andrew & Zhang, Anming & Cheung, Waiman, 2012. The purpose of this research is to show from the users’ perspective the most relative and important factors that determine container port competitiveness, based on survey results from the industry experts on ports in Mainland China, Hong Kong and other Asian cities. Forwarders, shippers and shipping lines are the three parties considered in this paper. Conclude that ports operators could benchmark their performance with their competitors and identify the areas that they need to improve. Network design approach for hub ports-shipping companies competition and cooperation. Transportation Research Part A: Policy and Practice, Elsevier, vol. 48(C), pages 1-18 by Asgari, Nasrin & Farahani, Reza Zanjirani & Goh, Mark, 2013. 12.

(19) This research investigates the cooperation and competition strategies between shipping companies and two major container hub ports. Considering three scenarios, based on a game theoretic network design model: In the maritime industry, the stakeholders comprising the port authorities, shipping companies, and port operators often compete and collaborate within an ecological system. Cooperation between the shipping companies and the hub ports, perfect cooperation between the hub ports, and perfect competition between the hub ports, using empirical data from two of main ports in Asia: Singapore and Hong Kong.. 13.

(20) CHAPTER THREE METHODOLOGY As a qualitative study, to make this research more accurate with the real state, we used two types of data collection, secondary data with the expert’s interview. Expert’s interview is one of the best ways to figure out the state of a problem and solution to it. Our method to analyze data collocated for this research is posed in two sections, secondary and primary data, to get results in two factors (external, internal). 3.1 Secondary data As a main data collection, Economic Commission for Latin America and the Caribbean, gave us most updated data of ports that are mentioned in this research. This is the best internet website to find economic growth and statistical records in every content of Latin America and the Caribbean, not only provide information to study the dynamics between countries in the area but also attract foreign investments and market shares. ECLAN has been reporting and analyzing ports competitiveness in the area, however in this study we will focus specifically in the Pacific littoral in Central America, without considering Atlantic littoral as the competition on that area is purely dynamic and follow specific international laws. Panama Canal Authority (ACP) allowed us access to latest data of vessel traffic and TEUs mobilized of each port by year. From here we can find shipping line relation with the ports. Georgia Tech Panama Logistics Innovation and Research Center, facilitated access to all main Panamanian logistics assets such as the canal, seaports, airports, roadways, special economic zones and free zones along with a broad spectrum of logistics services.. 14.

(21) 3.2 Primary data The key result in this research will be conducted by expert’s interview. There are four experts from different sectors (Private, Public and Suppliers) backgrounds. In the search to collect the different points of view, experts were selected from different companies and institutions that can be involve and impact in the port competitiveness environment. The experts and position is listed below: . Evergreen – export division manager,. . Maersk Line – CAR Cluster Recovery Supervisor,. . Maritime and Logistic Group – CEO, and. . Panama Canal Authority – Marine Logistic Engineer.. With each expert, there was about one hour of interview and questions were conducted based in three main specific perspectives: customs, infrastructure and service quality offered by each port, during conversation some others detailed questions were added. The perspectives selected follow the principles that other papers used to analyze the logistic performance index (LPI). Figure,3. The logistics performance (LPI) is the weighted average of the country scores on the six key dimensions: . Customs, analyze the efficiency and the speedily service handle during customs and border clearance management.. . Infrastructure, directly measure ports capability based on to the equipment and transport infrastructure.. 15.

(22) . Service quality, study the competence and the quality of the logistic services offered. From customs brokerage to trucking and forwarding.. . Timeless, measure the time take to process each shipment having as main counter product reach destinations in the planed delivery day or scheduled.. . International Shipment, transparency and competitive standard according to international laws.. . Tracking and tracing, measure the ability and technological system to provide real time data and tracking.. Figure 3. Input and outcomes LPI Indicators Source: Connecting to Compete 2012 Trade Logistics in the Global Economy. The Logistics Performance Index and Its Indicators. P7. 3.2.1 Interview main questions 1. How important is each factor at the time of choosing port of service? 2. Currently which are the principal origin-destiny ports in the Pacific littoral and main port supplier? Why? 3. Why is not the transshipment in the Pacific Littoral of Panama growing? 16.

(23) CHAPTER FOUR RESEARCH BACKGROUND Panama has had an important influence on commercial traffic between the Pacific and Atlantic oceans, generating a greater and better distribution of the services that can provide for container, bulk, liquid and general cargo, as well as passengers in the cruise terminals, becoming one of the most important transshipment centers. Likewise, an important network of national ports has been developed, dedicated to a wide variety of activities that benefit both the local and international markets. This chapter will provide more details of how is the administration of the ports in Panama and an explanation of each port to have a better understanding of it infrastructure and others. 4.1 Panama Port Administration Table, 3. The Panamanian ports within the National Port System (SPN) are divided into two groups: private ports and state ports. Private ports have been granted to port operators after a process of privatization of some state ports (concession). While the national ports are still operated by the State under the administration of the Panama Maritime Authority (AMP) providing berthing services and related services for local and coastal users. The Panamanian territory has several container ports that serve mainly the East Coast of North and South America, as well as the Caribbean, among them are the 5 most important in the nation (for this study we will highlight and mainly focus on the two ports of the Pacific Littoral).. 17.

(24) Table 2. Panama National Port System(SPN) Source. The author (C) Container, (L) Local, (GC) General Cargo, (F) Fuel, RoRo (RR), Dry Bulk (DB). Passenger (P); (1) includes reefer containerized cargo; (2) includes raw/frozen goods Type of cargo Type of Seaport Location Managemen C L GC F RR DB P t PTP (Rambala) Bocas del  Concession Chiriqui Toro Grande Chiriqui Grande Bocas del   State (Muelle Toro Fiscal) Bocas Fruit Bocas del 1 Concession Co. Almirante Toro Bocas del Almirante   State Toro Bocas del Isla Bocas   State Toro PTP Charco Chiriqui  Concession Azul Pedregal Chiriqui  Concession Armuelles Chiriqui   State Aguadulce Cocle   State Cristobal Colon     Concession Manzanillo International Colon    Concession Terminal (MIT) Colon Container Colon  Concession Terminal (CCT) Colon Port Terminal Colon    Concession (CPT) Colon 2000, Terminal Colon  Concession Cruceros Desarrollo Posicional Colon  Concession (Muelle 16 Cristobal) Terminal Petrolera Colon  Concession Bahia Las Minas 18.

(25) (Refineria Panama) Terminal Granera Bahia Las Minas Terminal Samba Bonita La Palma Boca Parita Mensabe Balboa PetroAmerica Terminal, S.A. (PATSA) Rodman PSA Panama International Terminal Terminal DECAL, Taboguilla Vacamonte Taboga Puerto Panama (Muelle Fiscal) Puerto Panama (Mercado del Marisco) Coquira Fuerte Amador Resort y Marina, S.A. Mutis Melones Oil Terminal, Inc. Colon Oil and Service S.A. Telfer Tanks. . Colon Colon Darien Herrera Los Santos Panama.    . . Concession.    . State State State Concession. Panama. Panama. Concession. . . . . . Concession. . Concession . Panama. Concession. Panama Panama.  . 2 . State State. Panama. . . State. Panama. . . State. Panama. . . State . Panama Panama. . . . Concession State. Panama. . Concession. Colon. . Concession. Colon. . Concession. 4.1.1 Port of Balboa. 19.

(26) Balboa has its origins in the old French port of La Boca. Since its reopening in 1909, this port was vital for maritime trade in the Pacific, because in its category it was the only one existing between Salina Cruz, Mexico, and El Callao, Peru; what represented for the large-scale vessels of the time (3,000 tons) a crossing of two thousand miles between the two points. The Port of Balboa has had the possibility of growing at the rhythm of the demands of the world markets for being a center of distribution of merchandise, connecting in turn with the main line services from the Far East and North America, towards the West Coast of South America, Central America and the Caribbean. This has put it in the sights of the largest shipping lines in the world. Currently, Balboa is one of the only two container terminals in full operation from the Pacific; serving the different shipping lines for the loading, unloading and transshipment of goods to the region. The port works with 25 gantry cranes (10 Post Panamax, 8 Panamax and 7 Super Post Panamax) and 47 RTGs and has a total of 40 hectares dedicated to the storage of containers and 5 docks for container ships. 4.1.2 Balboa Port operator The port of Balboa is operated by HUTCHISON PORTS HOLDINGS, an affiliate of the multinational conglomerate CK HUTCHISON HOLDINGS, specialists in development and port operations in Asia, the Middle East, Africa, Europe, America and Australasia. HUTCHISON PORTS, is the ports and related services division of CK HUTCHISON HOLDINGS LIMITED. Over the years, Hutchison Ports has expanded into other logistics and transportation-related businesses, including: cruise terminals, airport operations, distribution centers, rail services and ship repair facilities. 20.

(27) In 2017, Hutchison Ports handled, altogether, 84.7 million TEUs. It manages the ports of Cristóbal and Balboa, located at both ends of the Panama Canal, serving as a distribution network for Atlantic and Pacific trade routes. 4.1.3 Balboa Port operations The port of Balboa has changed from two separate docks originally built for general cargo handling, to a modern container terminal capable of simultaneously receiving three Neo-panamax vessels, one Panamax and one Feeder. This port is equipped with technology to handle containers, Ro-Ro cargo, solid and liquid bulk, as well as general cargo. The port system of Balboa manages to serve super Post Panamax ships, ships with dimensions of 333 meters in length (length) and 43 meters in Manga (width) efficiently, because it has a lot of last generation resources for it. The container terminal of Balboa presents a depth between 12.6 to 17 meters, this port system has the ability to service a super post ship Panamax after the extension of the canal. The terminal has self-sustaining electric power, also has more than three thousand connectors for containers that need refrigeration. In its administrative scheme, it has a physical plant where there are entities of control such as Customs and Agricultural Quarantine, as well as an area of phytosanitary control, migration and AUPSA (Panamanian food authority). Today the Port of Balboa is in the development of a project for its fourth phase of expansion, which will help increase the capacity of TEUs to 5 million per year.. 4.1.4 Panama International Terminal (PSA) With headquarters in Singapore and Belgium, PSA International is one of the leading port groups globally with participation in some 40 terminals in 16 countries in Asia, Europe and the Americas and a workforce of more than 30,000 people. 21.

(28) In March 2007, Panama International Terminal was created. One of the main ports located towards the Pacific Ocean, built by PSA International in the place where the old American naval base of Rodman was located. This port operator started activities in December 2010 with the receipt of iron products and other supplies for the expansion of the Canal. Its first phase has a 330-meter-long dock and is equipped with 3 Post Panamax cranes and 9 RTGs. The second phase has 2 springs with length of 400m each, 12 cranes mounted on rails and 8 additional gantry cranes with a reach of 24 containers wide to serve vessels of 18,000 TEUs. In total, it has the capacity to handle 2.5 million TEUs. 4.1.5 Manzanillo International Terminal (MIT) MIT started operations on April 16, 1995, in a location near the Atlantic entrance to the Panama Canal, immediately adjacent to the Colon Free Zone (ZLC). MIT complies with all aspects of the CSI (Container Security Initiative) agreement established between the United States and Panama, the BASC (Business Alliance for Safe Commerce) program, PGCC (Global Container Control Program) of the UNODC (Office of the United Nations Against Drugs and Crime), C-TPAT (Strategic Association CustomsIndustry against terrorism) and the code PBIB (Code for the Protection of Ships and Port Facilities). The port also offers: . Security for the ship and the terminal. . Access control and IDS (Intrusion Detection System). . More than 150 employees in the security area. . Canine anti-narcotics, anti-explosive and patrol units. . CCTV and Monitoring and Control Center. . Seal program with shipping lines 22.

(29) 4.1.6 Cristobal- Panama Ports Company (PPC) The port of Cristobal is one of the oldest ports in operation in Panama. Operating commercially for more than 150 years, Cristobal was built to receive workers and materials during the construction of the Trans-Isthmian Railway. Cristóbal is operated by Panama Ports Company (PPC) who is in charge of its administration and of Balboa on the Pacific side since 1997, after receiving a concession granted by the State and extensible for 25 years under the Law number 5 of 16th of January, 1997. Since then, Panama Ports Company began the process of transforming the docks and adapting them to the new patterns of world trade. With a handling capacity of more than 2 million TEUs, this port has land access to the Colon Free Zone and an interface with the railroad within its facilities that easily allows the movement of containers, with a total of 1,143 connections for reefer, 3 docks for containers and 12 hectares dedicated for handling and storage of containers, 13 gantry cranes and 36 RTGs. 4.1.7 Colon Container Terminal (CCT) Container Terminal Colón, S.A. is a modern port specialized in container handling cargo and rolling cargo, with high-tech equipment to provide efficient and faster transport of cargo. The port operated by the multinational Evergreen is located three (3) kilometers from France Field with a modernization investment of US $ 110.0 million. With ability to move 34 TEUS per hour and container yard capacity to store 400,000 TEUS. Equipped with five (5) gantry cranes. And total staff of 350 workers, including administrative staff and operators, who generate an efficient and organized freight movement.. 23.

(30) Area of the terminal: 37 hectares; 600-meter diameter maneuvering dock; 982 meters of dock (docks 1, 2 and 3). 14 meters deep (springs 1 and 2) and 15 meters deep (pier 3), respectively. Inspection ramp and phyto-zoo sanitary zones certified by the Executive Directorate of the Ministry of Agricultural Development of Panama. Customs, Quarantine and Migration services; area for 160 TEU intended for high risk containers; Adjacent intermodal connection provided by Panama Canal Railway Co. 4.2 Pacific Littoral traffic statistics Table 4. Based on the data obtained from the ECLAC – Top 20 Port’s ranking in the Latin America and the Caribbean from 2014 to 2017, the Balboa port total mobilizing loads in TEU’s decrease of 9.02%, Mexico and other countries on the Pacific littoral shows strong increase by each year, Mexico 5.16%, Guatemala 1.12%, El Salvador 0.3%, Honduras 0.41%, Nicaragua 1% and Costa Rica 1.02%. On the other hand, the graph made it from Table 4 shows the period decrease of load on Balboa port as in contrast to an in increase in Manzanillo and the other ports in the Pacific littoral.. Table 3. TEU’s total mobilized – main Pacific ports in the pacific littoral. Source. ECLAN Maritime and Logistic Profile of Latin America and the Caribbean, 20142017. 24.

(31) TEU's Total Mobilized - Main Pacific Ports 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2014. 2015. 2016. 2017. Balboa. Manzanillo. Quetzal. Acajutla. San Lorenzo. Corinto. Caldera. Expon. (Balboa). Linear (Manzanillo). Table 5. For the period, January-June 2018, a total of 44,329 ships arrived at Panamanian ports (Private and National), which represented an increase of 37.48% compared to the same period of 2017. Thanks to the inauguration of the new canal locks during the second semester of 2016 which increased the capacity to attend larger ships.. Table 4. Number of ships arriving to the Panamanian port system. 25.

(32) Source. Maritime Authority of Panama. Statistical maritime port report 2018. 4.2.1 Ports of Balboa Panama have five (5) port facilities dedicated to the traffic of containers: three (3) in the province of Colon – Atlantic littoral, and two (2) located in the province of Panama Pacific littoral. Table 5 shows the period between January-June 2018. The movement of containers in units was 1.9 million, registering a decrease in activity of 4.1%, compare this same period with the year 2017. Four of the terminals, in the period January-June 2018, recorded increases in its container movements in units; these were: the port of PSA (Panama International Terminal) with 176.3%, Colon Container Terminal with 10.6 %, and Manzanillo International Terminal 8.4%, compared to the same period of the year 2017. It should be noted that, in the ports of Panama Ports Company Balboa registered decreases of 21.7% and Panama Ports Cristobal Company with 2.4%, compared to the same period of the year 2017.. Table 5. Load operation in the Panamanian port system. Source. Maritime Authority of Panama. Statistical maritime port report 2018. 26.

(33) It is also necessary to have a reference of the containers that arrived empty to the Panamanian port system, which in one way or another affects the statistics of the load. Table 7. These containers generate income to the ports, since their cargo handling or discharge usually costs a value similar to the value of that of a fully filled container. This is extremely expensive for the different shipping companies that continuously look for Cross docking system avoiding these cost overruns. Behavior of movement of container per type in units.. Table 6. Containers received in Panamanian ports by type - Full and Empty containers comparison. (2016-2018) 27.

(34) Source. Maritime Authority of Panama. Statistical maritime port report 2018.. Full. Empty. 1,600,000 1,417,853 1,400,000. 1,390,310. 1,241,634. 1,200,000 1,000,000 800,000 600,000. 573,360. 596,155. January-June 2016. January-June 2017. 539,416. 400,000 200,000 0 January-June 2018. At present, in the National Port System, it comprises two ports that carry out the operation of unloading and loading of rolling cargo, which are Manzanillo International Terminal in the Atlantic littoral and Panama Ports Co. Balboa in the Pacific littoral. Table. 8. For the period, January-June 2018, this activity registered an amount of 79,202 vehicles, of which landed 49,228 and embarked 29,974. The disembarkation of vehicles represented 62.2% of the total movement, of which 42.7% corresponds to the local condition and 57.3% to the transshipment condition. Similarly, for boarding of vehicles represented 37.8% of the grand total; 2.5% corresponds to the local condition and 97.5% to the transshipment condition. Table 7. Rolling cargo operation in the Panamanian port system. Source. Maritime Authority of Panama. Statistical maritime port report 2018 28.

(35) CHAPTER FIVE 29.

(36) RESULT. From the globalization of the economy, how to face the competition has become a challenge for many companies. A technique to successfully answer this question is strategic planning. Currently, many companies are going through a difficult situation. Some fail to overcome and others survive even if reactive. Only a few anticipate and bet to be owners of their own destiny. They choose in a determined and active way, to influence their future. Leading a company is to develop a vision of the future of what I want the company to be. It's not just theory. It does not help to make an endless statement of values and objectives and hang them on the company's website. We must take actions, design a plan is the best way to predict it. It is time for companies to lead and know the vision of your business and share it with all your collaborators to have the commitment to fulfill it. It is time to bet on a mission, vision, strategy, and it is time to bet on people. To have a clear way of understanding, the results in this study has been divided in external and internal factors, data analysis and interview result. 5.1 External Factors The competitive environment of Panama has grown due to the new strategies that have been developed to increase its economy in reference to world trade. The geographic position of Panama and the short distance between the Atlantic and Pacific Oceans are competitive advantages that elevate and position the ports of Panama as the most appropriate option to establish any commercial and logistics company. The international economy has encouraged commercial activities within Panama to prosper. Currently, the country exports goods and services equivalent to between 35% and. 30.

(37) 90% of its gross domestic product (GDP), generating, in turn, foreign currency to import materials that are produced within the territory. 5.1.1 The expansion of the Panama Canal and the effects on the regional environment The expansion of the Panama Canal is the ones of the main factor since now the ships can travel with more cargo so it is not necessary to make connections from / to Asia in the Pacific. The fact that the post-panamax ship type navigate the route, impacts on the use of cargo transfer stations (transshipment), there are many important ports on the Pacific coast of America competing for transshipment cargo. Most of these countries have a larger population than Panama, so it is more attractive for shipping companies to capture local cargo and transshipment, larger volumes, Panama is only attractive for the position (including the Canal). 5.1.2 Port competition The competition framework with respect to the ports of the Panamanian environment in relation to Asia is very broad. Some of these services already operate vessels of more than 13,000 TEUs and serve the main ports on the west coast of the region. Panama's main competitors in terms of transshipment are: 1.. Manzanillo (Mexico). 2.. Lazarus Cárdenas (Mexico). 3.. Buenaventura (Colombia). 4.. Guayaquil (Ecuador). 5.. Callao (Peru). 6.. San Antonio / Valparaíso (Chile). 31.

(38) Likewise, the main countries that stand out as port competition for Panama are Mexico, Costa Rica, Colombia and Peru, thanks to their terminals being located in strategic sectors and ports that increase the transshipment capacity. 5.1.3 Development of shipping companies and alliances Table, 9. Among the possible factors that have influenced the decrease are the mega shipping alliances. Since the conglomerates that handle most of the container shipping routes in the world merged to lower their costs and optimize the load on larger ships. Table 8. Mega Shipping Alliance. Source: The Author Alliance Members 2M. Details of the Alliance. . HMM,. . Vessels: 223 ships. . MSC,. . Capacity: around 2.4 million TEUs. . Maersk. Operation: 25 weekly services globally. Ocean Alliance. The Alliance. . Port Connectivity: 1327 port pairs. . Cosco Group,. . Vessels: 323 ships. . OOCL. . Capacity: around 3.5 million TEUs. . CMA-CGM,. Operation: 40 weekly services. . and Evergreen.. globally . Port Connectivity: 1571 port pairs. . Hapag Lloyd,. . Vessels: 241 ships. . NYK,. . Capacity: around 3.3 million TEUs. . Yang Ming,. Operation: 32 weekly services. . MOL,. globally. . K-Line. . Port Connectivity: 1152 port pairs. In addition, since April 2018, the start of operations of the mega-alliance conformed by Mitsui O. S. K. Line (MOL), Nippon Yusen Kaisha (NYK Line) and K Line, Inc (K Line).. 32.

(39) The mega-alliances are one of the great advantages of which Panama must take, but there is also the threat to the country, since it cannot cover the demand of cargo of these large ships, and for that reason, we see them go to other neighboring ports. 5.2 Internal Factors A business plan concept that looks perfect on paper may be imperfect in the real world. Sometimes, the failure is due to the internal environment: the finances, the administration or the machinery. Internal factors, refer to all the things that are within the business and under its control, regardless of whether they are tangible or intangible. Also, they determine how the organization advances, both as an autonomous organizational entity and in response to its external environment. Based on the research background information the internal factor elements that could be affecting the growing of the transshipment on the littoral pacific of Panama are: the port modernization, the costs charged by the government to the containers that pass through the Dry Channel, the changes in the transshipment networks of the Shipping Companies and the Government's Commercial Role. Panama has the best transshipment offer in the region for its Dry Channel. However, it must maintain its port offer updated according to market demand and competitive prices to remain the best option in the region For Panama, it is very important to remain as the main transshipment point of the region as part of the strategy of maximizing the use of the geographical position, attract more cargo and thus can develop the Logistics Hub of the Americas. However, things are not developing as smoothly as they could.. 33.

(40) The government has shown the political will in the Logistics Cabinet to review the total of unnecessary costs that weigh on the Dry Channel. However, this is an entity that has no authority over the ministries that apply these costs. 5.3 Expert Interview Results To understand more thoroughly the main factors that have influenced the loss of transshipment load in the pacific coast, we consulted experts in the subject. What are the main factors based on the Logistic Performance index? During interviews with the 4 interviewees, multiple factors were indicated according to how they are affected. However, we could find 5 main factors that have influence on the slowdown of the transshipment in the pacific coast of Panama: . Pacific cargo movement has slow down. . The port upgrades in the region,. . Costs charged by the Government to containers passing the dry channel. . Changes in the transshipment nets of the shipping lines,. . The commercial role of the government.. During the interview with Maritime and Logistic Group – CEO, the transshipment of containers in the Panamanian port system is stuck, not growing at all, as you could see from the data of the Panama Maritime Authority (PMA), from 2012 to 2017. In addition, what has been handled this year 2018 does not reflect anything different. The only way to motivate the transshipment growth in Panama is for the government to start growing more interest in the transshipment industry, which is the second most important maritime business in the country after the Panama Canal; this could be achieved through a public-private alliance where the government is willing to sacrifice small incomes in favor to generate thousands of jobs, where the government joins efforts with the private enterprise through a commercial alliance 34.

(41) Panama is the leader in transshipment cargo movement in the Americas with 6,877,8826 TEUs (20´container) moved in 2017, according to official statistics of the PMA, out of which 6,009,562 TEUs correspond to transshipment movements. If we analyze the first five months of 2018 versus the same period of the last 6 years, we can note that there has been no growth, and that the ports maintain an unstable cycle, with the best year in 2012. The port upgrades in the region versus Panama. The country counts with a port investment of more than 3.5 billion dollars in port infrastructure for handling transshipment of containers in global port operators, in five world class ports. However, the investments and port upgrades in the region do not stop and Panama slowed down in terms of investment and port expansions. In the Pacific, Mexico, Guatemala, Colombia, Peru and Chile have attracted multimillion dollars’ investments in global operators (DPW, APMT, PSA, SSA, HPH), looking for important domestic cargo generated in these countries. In the Atlantic, something similar happens, Cartagena (Colombia), Moin (Costa Rica), Caucedo, (Dominican Republic) with important investments in expansions and port upgrades. In the case of Cartagena, it invested in the transshipment market with great success. The port market of the Atlantic and the Caribbean Evergreen – Export Division Manager, Both Littoral can’t be compare to each other as each littoral have different rules and it does not only depend on the port. In the Atlantic and Caribbean market, it is important to highlight that the transshipment is mandatory as the vessels that cross Canals coming from Asia towards the East Coast of the US. After passing the Canals, they must choose a port in the Atlantic-Caribbean for the transshipment of cargo to the region. As the same. 35.

(42) happens using mother vessels passing through the Panama Canal with the destination to ports of the East Coast of the United States. The port market of the Pacific - In the Pacific, the transshipment is not mandatory as in the Atlantic. In fact, prior to Balboa’s development, almost the entire cargo moved through direct services. The transshipment is only done by the big shipping lines with many services in the region. For them it is more a matter of efficiently combining their routes or in alliance with other shipping line to try to cover the small markets with feeders. So that the mother vessel only stop in one or two transshipment centers. In the Pacific, Panama have two ports and eight piers (Two of them started operations in April 2018) for container vessels, which in 2017 handled 2.986 million of TEUs with substantial low values to its best year in 2012 when it handled 3.303 million of TEUs. Figure, 1. In the Pacific, the competition is given by Manzanillo-México (2.83 million of TEUs in 2017), at which 35% is transshipment for the Pacific of Central America; Lazaro Cardenas-Mexico with a Hutchinson Terminal and another one of APMT (1.15 million of TEUs in 2017) with 25% of transshipment mainly for the Central America Pacific market; Buenaventura in Colombia with a terminal of the Port Society, another of PSA one more of APMT (920 thousand TEUs in 2017) with 40% of transshipment for the Pacific of South America, but also with north destinations through the Panama Canal; Callao in Peru (2.25 million TEUs in 2017) with 20% of the transshipment to the intraregional market. As you can see, there are several ports of the Pacific competing with Panama in transshipment, by offering very modern world-class facilities. The port modernization. 36.

(43) happening in the Pacific of Latin America from Mexico to Chile has increased the competition in the transshipment sector because the shipping lines relay on more options and have seen an opportunity to do transshipment. Some of them reduce the transshipment in Panama, which causes no growth due to high costs and lack of the relative government institutions efficiency in processing. Maersk Line – Asia-Latin America Logistic Operation Supervisor - The costs of the Government on the Transshipment Dry Channel. Figure, 4. Panama counts on a unique transshipment service in the region, using the Dry Channel, that no other country can offer in the Americas. This consists in downloading the container in a port of the Pacific; sending it by truck-road or railroad to another port in the Atlantic to be uploaded to its destination in the Atlantic of Central/South America, the Caribbean or the United States/North of Europe and the Mediterranean. Figure 4. Panama Dry Channel Source: copyrights of Maritime and logistic Group. Railroad Truck. Railway. Pacific Littoral Atlantic Littoral. The Dry Channel is use by the services that come from Asia with destination to all the pacific coast of South America, since using the Dry Channel they can attend the market. 37.

(44) of the Atlantic and Caribbean without the ship transiting the Panama Canal, then keeping its route to Chile, and returning to Asia. The dry channel fees applied by the government institutions have been paid by shipping lines in the last years, these costs affect the competitiveness of the transshipment center and the shipping lines try to avoid them by doing transshipment in another country. Therefore, this decreases the business for Panama, in ports on both ends, Pacific and Atlantic. Nowadays, the direct cost applied by the State through Customs/MIDA/AUPSA to a refrigerated container coming from South America, disembarking in the Pacific using the terrestrial way (railroad-truck) to move towards the Atlantic and embarking in another port with destination in USA/Europe/Caribbean could reach up to $25.00 in permissions, tax, forms, seals, and others for these three government institutions. In addition, every container disembarking in the Pacific and embarking in the Atlantic pays to the government an average of $13.00 charged to the port operators, by contract law. The tariffs that the ports charge to the shipping lines for moving a container are usually low to be able to compete and keep clients. The State should do its part to attract more transshipment cargo to Panama and reduce costs. For example, the transshipment tax per container is 5.00 USD which is charged by customs to the shipping lines, this charge does not have a reason. Another charge is for the seals of each of the three entities, generating an average of $12.00 for three seals, which could be reduced to only one seal and charge the cost accordingly which could reach as much $1.00 per container replacing the $12.00 charged today.. 38.

(45) This cost that has being paid for years by the shipping lines, for them is not necessary to pay anymore as there are other and new options in the route, such as disembarking in Buenaventura and embarking in another vessel that will go through. The dry channel of Panama is unique in the region, but the government costs is reducing cargo and competitiveness. Evergreen – Export Division Manager, - The changes in the routes of the shipping lines, the port modernization of the region has facilitated the shipping lines to change its transport network in the Pacific. As these ports can receive neo-panamax vessels these days, offer better transit times mainly for the refrigerated cargo, and reduce costs. Figure 5, Between 2006 and 2018, the routes have noticeably changed. In 2006, due to the lack of modern ports in Chile and Peru, these ports received the cargo transshipped in Panama for services arriving directly to Panama from Asia. From here they turned around to return to Asia, this being the service which more cargo provided to Panama and the dry channel. Figure 5. Routes of the shipping lines (2006) Source: copyrights of Maritime and logistic Group. Figure, 6. Panamax or Post Panamax vessels with destinations to south America, West Coast previously only arrive in Panama, whereas in 2018 ports in South America 39.

(46) such as Chile, Peru, Ecuador are offering the neo-panamax vessels services from Asia and then come to Panama. Figure 6. Routes of the shipping lines (2018) Source: copyrights of Maritime and logistic Group. Figure 7. In 2010, there were services with neo panama vessels from Asia to Mexico and then arriving to Balboa-Panama, going to Chile and then coming back to Panama to go to Mexico and then to Asia. These services have changed and nowadays they first stop in Mexico, go to Balboa, then to Chile and from there return directly to Asia, which reduces transshipment cargo to the ports and the dry channel of Panama. The competition for the cargo apart from being affected by the tariffs for transshipment movement, and the transit time of the cargo (especially for the refrigerated or perishable cargo), in which Panama is disadvantaged because transshipment time is much longer in comparison with others ports in the pacific littoral.. Figure 7. Routes of the shipping lines (2010) Source: copyrights of Maritime and logistic Group. 40.

(47) These route changes have reduced the transshipment cargo to ports in both oceans, but mainly to the Pacific ports, as it is reflected in official statistics. Panama Canal Authority – Marine Logistic Engineer. The Government Authorities role and related authorities are influencing directly in the transshipment cargo are Customs, MIDA, UPSA, PMA. The main task of Customs is to charge import taxes to the cargo and avoid smuggling, amongst other things. It is a task of Customs to facilitate and incentive the transshipment, however, if the country wants to grow in transshipment it is important to check these tasks, modernize the institution and eliminate the continuous delays in the customs offices (when moving a transshipment container from one port to the other). Eliminating the transshipment tax charged to containers moved by road and eliminating the cost and custom seals and replace it by a unique tax charged directly to the container shipping line. The main task of MIDA-Quarantine is to avoid the entrance to the country of any plague which could affect the agriculture heritage of the country, it is a task which hardly interferes with transshipment, however as well as Customs it requires of tech upgrades and. 41.

(48) avoiding the seal cost charge to the cargo of quarantine and replace it with the verification and validation of the shipping line seal. The main task of AUPSA is the control of foods entering the country; the task of verifying food transshipped in Panama to another country is out of place and only adds more bureaucracy and costs to the transshipment cargo, such as permits, seals, and others. The Panama Maritime Authority is a regulating entity for the maritime activity, the role to incentive the transshipment is imperceptible, even more then it is noticeable the dynamics in the Shipping Registry, activities in domestic ports, and other regulatory activities related with the Auxiliary Maritime Industry. It is important that the PMA develop a commercial role that helps, in alliance with the private port operators, to boost the transshipment in Panama to be the voice of the industry in the cabinet councils in order that the State/Government eliminates the excess of surcharges imposed by the authorities to the transshipment cargo. To turn the entity into an institution gathering the shipping lines to look for the way to move more transshipment cargo in the benefit of Panama.. 42.

(49) CHAPTER SIX CONCLUCION In less than a year we will commemorate the 20 years of the Canal transfer. Those of us who participated in that memorable event can say that Panama has achieved many significant transformations. In 1999, Panama's gross domestic product (GDP) was just over $ 11 billion. For the year 2017 it already exceeded $ 40 billion, and it is possible that by the end of 2019 it will exceed $ 45 billion, that is, it will have quadrupled. This growth cannot be attributed to a particular sector, but it should be noted that in those same 20 years the Panamanian port industry evolved from moving a little more than 700 thousand to about 7 million TEU, that is, it multiplied by 10. Thus we can continue listing many growth rates in the maritime sector. However, that growth is little with respect to what it could become. In 1995, when the Assembly included in the constitutional title on the Canal that it would be part of the National Maritime Strategy (MNE), many did not understand what it was about; but even so it was approved by the two regulatory legislatures. Later, when the Organic Law of the Panama Canal Authority (ACP) and the Panama Maritime Authority (AMP) were approved, the explicit reference to the National Maritime Strategy was again in both texts, and in 2004 the Mireya government Moscoso approved the first National Maritime Strategy by decree. Later, during the government of Martín Torrijos, the strategy was expanded to include the logistic activities that were part of the same value chains, and in 2009 the new version was approved by decree. The two subsequent governments left the National Maritime Strategy aside and concentrated on developing a National Logistics Strategy (ELN), which was delivered in 2017 and is currently in force. The fundamental fact that I wish to highlight is that while it is true that the National Logistics Strategy 2030 is a milestone in the logistics development 43.

(50) of Panama, I think we should revisit the National Maritime Strategy and resume many of the objectives and tasks that remained pending for to be able to turn Panama into the maritime country that it must become. While it is true that Panama is much more than a Canal, the main axis of the value chains offered by Panama is in the services offered to the ship. To the extent that the shipping company receives services at competitive prices and world class, the cargo will come to Panama. And with maritime services we refer to those that range from maintenance, repair, change of crew, piloting and tugs, to financial, legal, provisioning, fuel supply, inspections, etc. We must not forget that a ship is a company whose administration requires all these services in strategically selected places by its operators. We must and can aspire to be a maritime city of a global nature, attracting shipowners and ship operators, additional shipyards, and many other services that are offered from other maritime centers globally. In the same way, we must be a center of educational excellence in maritime and logistics careers of worldwide recognition. We must be a model in compliance with international environmental regulations and promoters of compliance with these regulations. We must think about globalizing the services and expertise acquired in all maritime and logistics clusters, so that Panamanian companies operate and manage concessions of ports and logistics parks in other parts of the world, as companies from other countries in Panama do today. The competition is not easy; the topic of the transshipment tariffs per movement is an example, in Panama the average rate is in 110-80 dollars, whereas our competitors offer between 45-65 dollars. Comparing Cartagena with Panama, Panama is more expensive, as the labor cost has increased significantly in the last two government terms, and does not count with local cargo as Colombia, which is an important income that allows the furnishing of transshipment services at a lower tariff.. 44.

(51) In Jamaica, the transshipment tariffs are very low, as the port is manage by the State and it sacrifices income for jobs. In Mexico, Colombia, Peru and Chile they are low as there is a lot of local cargo. Panama counts with some advantages with the dry channel to attract more transshipment, to disembark in the Pacific and embark in the Atlantic, and is the only country that can offer this option, but this advantage is highly penalized by the charges imposed by the State to this type of transshipment in the customs topic, MIDA and AUPSA. The shipping companies are always looking for options to lower costs, and to compete for the cargo market, they also make alliances to share and lower costs. If the State/Government does not reach a public/private alliance with the main players in the transshipment business, we will not see this maritime business grow, and it will stay stuck as in the last 6 years or even can start to lose cargo. Others research study as Notteboom (2006) explained the importance and how the alliance between shipping lines has impact the market. Acosta, 2011, the way that ports are manage and service provided, ports of the Gibraltar Strait. In other areas, Hoshino, Hiroshi. (2010) in his study about the port competitive in Japan and the lesson learned from the Japanese ports to stay competitive in the Asia market using a cooperation strategic with other ports in the country. Finally, following the statements of the National Logistics Strategy 2030, we must transform Panama from a place of transit to a center for the production and transformation of goods based on innovation and technology. What we need, says the National Logistics Strategy 2030 is to take a quantitative and qualitative leap in the institutions that govern the sector, provide competent human resources and budget to develop the necessary laws and regulations, develop the priority infrastructure, including the technological platform that allows to modernize the sector, but,. 45.

(52) equally, it must create the necessary incentives to attract investments. An institutionalist that integrates and develops the potential of our maritime conglomerate, including the Canal. I am sure that the GDP of the country will more than double in the next 10 years and Panama will finally be able to say that it is a maritime country.. 46.

(53) References Georgia Tech Panama Logistics Innovation and Research Center. (n.d.). https://www.gatech.pa/. Acosta, M. &. (2011). Bunkering competition and competitiveness at the ports of the Gibraltar Strait. doi:10.1016/j.jtrangeo.2010.11.008 Asgari, Nasrin & Farahani, Reza Zanjirani & Goh, Mark, 2013. (2013). Network design approach for hub ports-shipping companies competition and cooperation. doi:10.1016/j.tra.2012.10.020 Bandenburger and Nalebuff (1996). (1996). Co‐opetition: Competitive and cooperative business strategies for the digital economy. doi:10.1108/eb054655 ECLAC. (2017). Maritime and Logistics Profile of Latin America and the Caribbean. Retrieved from http://perfil.cepal.org/l/en/portmovements_classic.html. Economic Commission for Latin America and the Caribbean. (n.d.). https://www.cepal.org/en. Esmer, S. &.-O. (2016). Non-Price Competition in the Port Sector: A Case Study of Ports in Turkey. International Association of Maritime Economists Conference. doi:10.1016/j.ajsl.2016.03.001 Helen A. Thanopoulou & Anthony K. C. Beresford. (2010, May 12). Transhipment Port Selection and Decision-making Behaviour: Analysing the Taiwanese Case. doi:10.1080/13675560310001626990 Hoshino, H. (2010, June). Retrieved from https://www.researchgate.net/publication/257737356_Competition_and_Collaboration _among_Container_Ports https://www.gatech.pa/. (n.d.). James Wang, Brian Slack. (2004, October). Regional Governance of Port Development in China: A Case Study of Shanghai International Shipping Center. doi:10.1080/0308883042000304467 Magan M. Sammons A. 2008. (2014, June). Port strategy in the era of supply chain management: the case of Hong Kong. doi:10.1080/03088839.2013.863434 Malchow, M. and Kanafani, A. (2004). (2004). A Disaggregate Analysis of Port Selection. Transportation Research Part E, 40, 317-337. . doi:10.1016/j.tre.2003.05.001 Notteboom (2008). (n.d.). ThRelationship between Seaports and the Inter-Modal Hinterland in Light of Global Supply Chains. doi:10.1787/9789282102251-3-en Peter W. De Langen and Athanasios A. Pallis. (n.d.). Coordination in Hinterland Transport Chains: A Major Challenge for the Seaport Community. doi:10.1057/palgrave.mel.9100194 Professor D John Mangan, Professor Chunnilal Lalwani. (2002). Modelling port/ferry choice in RoRo freight transportation. doi:10.1016/S1471-4051(01)00003-9 47.

(54) Tai, Hui-Huang. (2005). Analysis of hub port choice for container trunk lines in East Asia. Journal of the Eastern Asia Society for Transportation Studies. 6. 907-919. Retrieved from East Asia is the most blooming area among global container shipping services. Most of the oceangoing lines select major. Tiwari, Piyush & ITO, Hidekazu & Doi, Masayuki. (n.d.). Shippers' Port and Carrier Selection Behaviour in China: A Discrete Choice Analysis. Maritime Economics and Logistics. 5. 2339. doi:10.1057/palgrave.mel.9100062 Tongzon and Heng. (2005, June). Port privatization, efficiency and competitiveness: Some empirical evidence from container ports (terminals). Retrieved from Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(5), pages 405-424, June.: RePEc:eee:transa:v:39:y:2005:i:5:p:405-424 Wei Yim Yap, J. S. (2006). Developments in Container Port Competition in East Asia, Transport Reviews, 26:2, 167-188. doi:10.1080/01441640500271117 Yuen, Chi-lok Andrew & Zhang, Anming & Cheung, Waiman, 2012. (n.d.). Port competitiveness from the users' perspective: An analysis of major container ports in China and its neighboring countries. doi:10.1016/j.retrec.2011.11.005 https://www.prensa.com/opinion/Estrategia-Maritima-Nacional_0_5218728093.html https://www.gatech.pa/?lang=en https://www.pancanal.com/eng/. 48.

(55)