Panama Maritime: A Leader in Connectivity

Panama Maritime: A Leader in Connectivity

Panama has the best maritime connection in Latin America.
Panama leads in Latin America and the Caribbean in the latest index prepared by the United Nations Conference on Trade and Development.
The port of Manzanillo, in Colón, is the one that moves the most cargo in the region.

Panama continues to have the best maritime transport connectivity in Latin America and the Caribbean, according to an index prepared by the United Nations Conference on Trade and Development (Unctad).

According to the latest measurement, corresponding to March 2024, Panama is the country that has the best connectivity for maritime transport in the region. Worldwide it occupies position No. 26, with a 6% growth compared to the previous year, despite the restrictions imposed in 2023 by the Panama Canal due to the lack of water availability.

The isthmus has a multimodal system that includes a dry canal, adjacent to the interoceanic waterway, which moves containers from one ocean to another through the Panama Railway.

Top Ports in Panama

Panama has the most important port in Latin America, the Manzanillo International Terminal “MIT”, in Colón, with more than 4.3 million TEUs moved.
The MIT, located on the Atlantic Coast of Panama, is a distribution centre for goods destined for cities within Panama and neighbouring countries in Central America and the Caribbean.

In fifth place, there is another Panamanian port, the port of Balboa, located on the Atlantic coast and managed by Panama Ports Company (PPC), which handles an average of 2.5 million TEUs.

Global Maritime Connectivity

The Shipping Connectivity Index (LSCI) assesses the capacity of a country's ports to transport 20-foot containers (TEUs) by sea to other ports.
It takes into account several factors such as the number of ships, the frequency of weekly sailings, the capacity offered, the number of services, the capacity offered, the number of destination ports, and many others.

The list of the best-connected countries in the world is headed by China, South Korea, and Singapore, followed by the United States.
Panama is one of the only countries that has a comprehensive logistics offer, providing its users with water, rail, and land connectivity.

Challenges Facing Panama's Maritime Sector

The Panama Maritime Chamber clarifies the need for a clear route and an action plan to be defined in the coming months to dispel the uncertainty and anxiety that hangs over the users of the Panama Canal.

The union observes with concern the lack of clarity and uncertainty that exists in long-term plans that aim to solve and prevent any water crisis scenario to operate the Panama Canal and supply the community.

The Chamber emphasises that it is imperative that national authorities spare no effort to protect the route and obtain tools that ensure its sustainability and competitiveness.

Panama Canal and Economic Impact

The Canal route not only benefits the country through direct revenue but also generates an important network of auxiliary and logistical maritime services and activities that make up one of the conglomerates that generate the most employment for the national treasury.

According to the Chamber, Panama's maritime and logistics conglomerate contributes 31% of GDP, with 30% of salaried employment conglomerate and 26% impact on contributions to social and educational security.

Future Outlook for the Panama Canal

The Panama Canal Authority “ACP” hopes to completely normalise ship transit in 2025, now restricted to 27 daily out of 36, due to the severe drought that has affected the artificial lakes that feed the interoceanic waterway.
The ACP continues to closely monitor precipitation patterns and will announce any updates.

Since last March 25, a total of 27 ships can cross the waterway daily, which serves more than 180 maritime routes, connecting 170 countries and reaching some 1,920 ports around the world.
The traffic restrictions applied since 2023 will cause a decrease of $800 million in canal revenues.

Although optimistic, the canal administration clarified that all adjustments to savings measures will depend on climate projections: “If the rains do not reach expectations, the Canal could maintain or apply new restrictions on the daily passage or draft.”

Multimodal Dry Canal Initiative

The Logistics Cabinet explained the benefits of the new dry canal and its contribution to trade. The members of the Logistics Cabinet explained to the diplomatic corps and representatives of international organizations accredited in the country the decree that establishes the multimodal dry canal for the transhipment of goods.

The Minister of the Presidency, José Simpson, recalled that the dry canal initiative is the product of multiple consultations with different productive initiative sectors of the local economy.

Simpson highlighted that the logistical development registered by Panama in terms of cargo transhipment at an international level is what has established the conditions to integrate the transhipment of goods.

The dry canal will operate with the coordination of competent public entities and will serve as a complement to the activities of the Panama Canal.

For her part, Tayra Barsallo, director of the National Customs Authority “ANA”, explained that the assets of the dry canal are the railway, roads, ports, and economic and free zones of Colón, Panama, and Panama Oeste airports.

The benefits of the dry canal are the reduction of transhipment and clearance times, greater traceability of cargo, and the digitalization of customs processes.
The traceability and safe loading of countries, which is the primary task of Customs, is guaranteed with the operation of the dry canal.

Sources & Footnotes

[1] United Nations Conference on Trade and Development
[2] Panama Maritime Chamber
[3] National Customs Authority (ANA)
[4] Panama Canal Authority (ACP)
[5] Shipping Connectivity Index (LSCI)