Panama and the Regional Transshipment System

Over the last 15 years Panama has seen substantial investments in port infrastructure. The sustained growth of Manzanillo International Terminal, Cristobal, Balboa and Colon Container Terminal provide testimony to the success of these investments. The presence of Global Container Terminal operators such as Hutchison Whampoa, SSA and, most recently, PSA attest to the attractiveness and value of Panama as a major transshipment center. Today, these terminals continue to expand to the rhythm of growing maritime trade. Panama is the undisputed center for movement of containerized cargo in Latin America.

The growth of maritime commerce through Panama, specifically of manufactured or semi manufactured goods originating in East Asia, has been one of the main drivers of the expansion of the Panama Canal. In addition, it has compelled both Panama´s Caribbean ports (MIT, Cristobal and CCT) and Balboa, on the Pacific, to continue adding capacity to guarantee the service level and terminal productivity these cargoes require to make their transit on Panamanian soil a feasible and valuable proposition to their supply chains.

While the global transshipment incidence was around 17% of port TEUs in 1990, it climbed to more than 28% in 2008. There are several factors that underline that transshipment in Panama represents a high value proposition. The first and most obvious is the central location of Panama within the trade system of the Americas and the convergence effect on trade flows that the canal has incited over a century of operations. The Panama Canal has the effect of a narrow strait, similar to Gibraltar or Singapore where axial east-west trade routes intersect with north-south connectors, making nearby ports ideal for the transshipment of cargoes.

Panama is well placed to be the anchor point of the Caribbean transshipment triangle and of the growing trade between the economies of the West Coast of South America and Asia. Its location permits the establishment, on both coasts, of hub-and-spoke services covering relatively short distances within the America’s coastal systems and allows for interlining between long distance shipping networks. The result is additional transshipment demand from north-south connectors linking with east-west deep sea routes and east west routes relay.

Home | Contents | Media | Glossary | Links | About | Contact | Purchase

Copyright © 1998-2012, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University, New York, USA.
This material (including graphics) cannot be copied or redistributed, in whole or in part, in ANY FORM (printed or electronic) and on ANY MEDIA. For specific uses permission MUST be requested and the material must be cited.