Transport & Logistics
From The Report: Panama 2015
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Making up 18.5% of Panama’s GDP at a value of $6.6bn in 2014, the transport, storage and communications sector has historically been a pillar of Panama’s growth. The solid performance of the transport and logistics sector, which grew more than 17% annually between 2007 and 2014, is set to continue, driven in large part by planned substantial public investment. According to the Strategic Government Plan 2015-19, investment in transport and logistics will total some $6.5bn in that period, with $3.28bn earmarked for logistics projects and $3.21bn for urban transport. The $2bn second metro line in Panama City is one of the plan’s flagship projects for the sector. Beyond the opportunities that this will generate for private players, the increased investment is expected to enable Panama to maintain regional leadership in the highly competitive sector.

This chapter contains an interview with Aitor Ibarreche, CEO, Panama Ports Company.

Articles from this Chapter

Overview

Ahead of the game: Investments in port capacity and value-added services are diversifying the sector
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Making up 18.53% of the country’s GDP at a value of $6.6bn in 2014, transport, storage and communications has historically been a pillar of Panama’s growth. The opening of the Panama Canal in 1914 and the subsequent handover of the passage from the US to local authorities at the end of 1999 has been a catalyst of the country’s economic success. Many activities related to logistics such as transhipments, multi-modal transport, storage, consolidation, deconsolidation and others have also formed…

Analysis

Ambitious plans: Public investment is focusing on logistics, mass transport and highways
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Panama has a long history of transport and logistics infrastructure investment, with one of the most significant certainly being the widening of the Panama Canal. With an initial budget of $5.25bn, recurrent costs have raised the cost of the project to more than $6bn. Some estimate the grand total may reach $7bn, over 30% more than originally planned. Cost overrun claims from contractors reached $463m in compensation from which $233m were approved (related to concrete and basalt), and $130m in 2014,…

Interview

Aitor Ibarreche, CEO, Panama Ports Company: Interview
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Interview:Aitor Ibarreche What changes will local ports undergo in response to the completion of the Panama Canal expansion? AITOR IBARRECHE: Trade running from Asia to the east coast of the US continues to be the dominant contributor to the US container market. Currently, these containers arrive from Asia and are transferred at Panama’s Pacific ports. Once the canal expansion is complete, the same ship will be able to pass through the Panama Canal without transferring cargo by rail, as it must today. High volumes of cargo are also being trans-shipped via the Pacific from the west coast of South America to the east coast of the US.…

Analysis

Mixed modes: Expanding cargo capacity for intermodal transport
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Although historically the Panama Canal has been the top revenue earner, the contribution of canal revenues as a percentage in the transport and logistics sector has been gradually declining. In 2008 income from the canal represented 46.6% of sector GDP, while in 2013 it amounted to 37%. This shows that other transport modalities, mainly land-based cargo, have increased in size. Most of this success comes from the sector’s expanded capacity for intermodal transport options. The most important intermodal…

Analysis

Competitive edge: Preparing for increased competition with new projects
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With access to both the Atlantic and Pacific Oceans within a few kilometres of each other, Panama is one of the best-located countries for maritime activities globally. Added to its location, the Panama Canal and its expansion make it a key player in world commerce. The current container-handling capacity for the Pacific side of Panama is estimated at 5m twenty-foot equivalent units (TEUs). Canal expansion-related projects are expected to boost capacity up to 6m TEUs by 2016 and 8m TEUs by 2020.…