7 Reasons Panama is the Latin American Supply Chain Capital with Demo Perez

[00:20] Opening / Introduction

[00:51] Tell us about yourself and what you do in Panama.

• I was born and raised in Panama and manage a 3PL.
• My main role is to promote the hub that Panama offers to the world.

[02:19] What was your first job in logistics?

• A relative of mine had a parcel company that got a contract with a multinational.
• He learned that he needed to serve a different area than he was in, so he called all his friends and family to help him launch. I was one of them.
• I started delivering parcels for him.

[03:52] You’re the General Manager of Logistics Services Panama. What type of customer do you serve there?

• We serve global multinationals, typically US-based.

[05:12] Latin America has so much opportunity because of their growth, but they’re hard to work with. Panama understands how to work with those markets, which is why the country is so important. Please elaborate.

• The difference with Latin America is that every country has their own culture and consumer behavior. It’s hard for companies to penetrate these markets.
• We have specialized in enabling our customer’s products to pass through tariff barriers.

[07:46] You didn’t have to work with these smaller companies back in the day, but now it really matters.

• There are many countries in Latin America that are growing.
• Panama is becoming more interesting, and not only for the US.

[10:40] Tell us a little more about Panama.

• It’s strategically located in the very middle of the continent.
• Spanish colonies decided that Panama would be a good path to discover new territories because it could be used to cross from the Atlantic to the Pacific in a short period of time.
• We have about 4,000,000 people.

[17:13] What’s the first reason that Panama is Latin America’s supply chain capital?

• This is one of the elements you must have to serve your end customer.
• The Panama Canal is the backbone of the hub.
• It’s about fifty miles from the Pacific to the Atlantic. I can see the Pacific from my kitchen window, and the Atlantic from my office window.
• We also have very fast internet.

[20:45] What is the number-two reason that Panama is Latin America’s supply chain capital?

• Our ports and location.
• We have developed a really good working infrastructure. We’re not only crossing ships, but servicing them as well.
• We are moving over 7,000,000 containers per year.

[23:15] What is the number-three reason that Panama is Latin America’s supply chain capital?

• The time it takes to move a container from Asia to the US and then to Latin America adds a lot of costs. In Panama, you wouldn’t have those.
• The costs will be at least 50% less than doing all the processing in the US.
• Regarding the new tariffs between the US and Mexico, you don’t need to worry about them if you take the product right to Panama.

[28:09] What’s the fourth reason that Panama is Latin America’s supply chain capital?

• Our economy. It’s growing and has allowed us to develop the infrastructure needed for logistics.
• Panama is the most competitive market in Latin America and the US dollar is used.

[31:22] What’s the fifth reason?

• The free trades zones that we have.
• Long ago the country found a free trade agreement from Louisiana, translated it into Spanish, and implemented it.
• There’s now a free trade zone being developed in the airport.

[33:20] What’s number six?

• We’re a business-friendly country. There are over 150 Latin American headquarters for multinational companies in Panama.
• We don’t have issues with visas.

[35:59] What is number seven?

• We understand the market. Latin America is a very different place to do business and we know that.
• We create different labels for different countries. If there’s something we can do for our customers, we do it.

[40:41] Now in the US, we’re expecting to see things we ordered online on our front porch in a few days. Latin American consumers will say the same thing, so we need inventory close to them.

• The future of Latin American ecommerce is bright.
• Because everyone lives online, people here will see new products at the same time as the US. The product needs to be available to the end customer.

[45:08] What do you have to say to wrap this up?

• Every day, there are new disruptions in this industry. We need to react as fast as possible.
• It’s no longer the big beating the small, but the fast beating the slow.
• The ones reacting fast are gaining business, and Panama makes reacting easier.

[46:14] What’s going on at your company?

• We want to move more into light manufacturing and assembly.
• We are getting better every day with our operational excellence.