MANZANILLO INTERNATIONAL TERMINAL MANZANILLO INTERNATIONAL TERMINAL MANZANILLO INTERNATIONAL TERMINAL MANZANILLO INTERNATIONAL TERMINAL –––– PANAMAPANAMAPANAMAPANAMACONTAINERS CONTAINERS CONTAINERS CONTAINERS • RORORORO----RO RO RO RO • BREAKBULK BREAKBULK BREAKBULK BREAKBULK • PROJECT CARGOPROJECT CARGOPROJECT CARGOPROJECT CARGO

La La experienciaexperiencia en en logisticalogistica de de manzanillomanzanillo international terminalinternational terminal

CARLOS URRIOLACARLOS URRIOLA

China hears the call of the vuvuzela

AGENDA

qConnectivity and PanamaqHow did it happen? What do we make

of it?qHow to make it sustainable?qWrap up

MORE CONCENTRATION / MORE ECONOMIES OF SCALE

WHERE DOES PANAMA RANK?LINER SHIPPING CONNECTIVITY INDEX (UNCTAD)

35

40

45

50

Canada

Panama

Mexico

China: 143.56 (1st)

USA: 83.79 (9th)Panama: highest ranked country in

Latin America (24th overall)

SELECTED COUNTRIES IN THE AMERICAS

22nd

24th

28th

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010

Mexico

Jamaica

Brazil

Argentina

Colombia

Uruguay

Dominican Republic

Chile

Peru

28th

32nd

34th

42nd

45th

48th

49th

50th

51st

A REAL DISTRIBUTION PLATFORM

AGENDA

qConnectivity and PanamaqHow did it happen? What do we make

of it?qHow to make it sustainable?qWrap up

HOW DID IT HAPPEN?

qBeware of what you pursue…

PORT PORT INVESTMENTINVESTMENTEXECUTEDEXECUTED

WHY THE HIGH MARK?

q Panama started its privatization process 15 years agoq Over that time, stevedoring rates have gone down by 50%q Terminal productivity levels have increased by 400%

(from 10MPH to40MPH)q Nearly $2B invested in port infrastructureq HR on constant training

Over time, more shipping lines are calling Panama, increasing competition and lowering freight rates. With more lines, comes the need for more port investments which, in turn, opens the opportunity for more shipping lines

OF COURSE, ALL THIS BASED ON A OF COURSE, ALL THIS BASED ON A SAFE, PRODUCTIVE PORT OPERATIONSAFE, PRODUCTIVE PORT OPERATION

EXECUTEDEXECUTED

PORT PORT INVESTMENT INVESTMENT NEEDSNEEDS

MORE MORE VESSEL VESSEL CALLSCALLS

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

PORTS’ CONTAINER THROUGHPUTPanama 1989 – 2009 (TEUs)

MIT starts operations

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

MIT Total

MIT DEVELOPMENT

qMIT: $550M invested up to date

19931993 2010

MIT LOGISTICS PARK

60,000 m² of current warehouse capacity90,000 m² of projected total warehouse capacity

COMPANIES WORKING OUT OF THE MIT LOGISTICS PARK

Consumer

Electronics

Pharmaceutical

Fast Moving Consumer Goods (FMCG)

MIT VALUE-ADDED AREA

MARITIME AND LOGISTICS-RELATED COMPANIES WITH REGIONAL OFFICES IN PANAMA

A WHOLE NEW ANCILLARY BUSINESS MODEL

q Container repairq Ship repair and maintenanceq Ship crewingq Shipchandlersq Waste management and disposalq Water provisionq Agencies and representatives

WE HAVE TO REMEMBER THE “OLD” CONCEPT

TRULY MULTIMODAL!

PANAMA: A GROWING LOGISTICS HUB

COLON FREE ZONE

HEAVY EQUIPMENT STORAGE &

REFURBISHMENT

FUTURE AIRPORT…

RAILROAD

MIT LOGISTICS PARK

AGENDA

qConnectivity and PanamaqHow did it happen? What do we make

of it?qHow to make it sustainable?qWrap up

ENHANCE CONNECTIVITY AND INCREASE OPTIONS

CARTAGENACOLOMBIA

BARRANQUILLACOLOMBIA

BUENAVENTURACOLOMBIA

WILLEMSTADCURACAO

PORT AU PRINCEHAITI

POINT A PITREGUADALOUPE

STO. TOMAS DE CASTILLA

GUATEMALA

PUERTO CORTES

HONDURAS KINGSTONJAMAICA

SAN JUANPUERTO RICO

MIAMIUSA

LA GUAIRAVENEZUELA

PUERTO CABELLOVENEZUELA

SANTA MARTACOLOMBIA POINT LISAS /

PORT OF SPAINTRINIDAD

CAUCEDO / RIO HAINADOMINICAN REP.

MOIN / LIMONCOSTA RICA

ALTAMIRAMEXICO

VERACRUZMEXICO

MANZANILLOMEXICO

LA/LBUSA

LA HABANACUBA

CAYENNEGUYANA

PARAMARIBOSURINAME

PT. EVERGLADES USAJACKSONVILLE USA

NEW YORK USA

CHARLESTON USASAVANNAH USA

NORFOLK USA

MARACAIBOVENEZUELA

SANTIAGOCUBA

PROGRESOMEXICO

NEW ORLEANSUSA

HOUSTONUSA

ACAJUTLAEL SALVADOR

… plus some top niche carriers:q Seafreightq King Oceanq CFSq SCLineq Crowley

COLOMBIA

GUAYAQUILECUADOR

CALLAO PERU

SAN ANTONIO /VALPARAISO

CHILE

SAN VICENTECHILE

ITAJAIBRASIL

RIO GRANDEBRASIL

SANTOSBRASIL

BELEMBRASIL

VITORIABRASIL

MONTEVIDEOURUGUAYBUENOS AIRES

ARGENTINA

PAITAPERU

GUYANA

ANTOFAGASTACHILE

VILLA DO CONDO /MANAUS

BRASIL

All top15 shipping lines working out of Panama…

The Panama Canal 1914

The Panama Canal Today

EXISTING vs. NEW CANAL CAPABILITIES

Post Panamax Locks OperationPost Panamax Locks Operation

WSB 1 WSB 2 WSB 3

With the water saving basinsthe new locks will use 7% lesswater than the existing locks

With the water saving basinsthe new locks will use 7% lesswater than the existing locks Existing LocksExisting LocksNew LocksNew Locks

Water Utilization

Water Utilization

Wildlife Rescue – Atlantic SideWildlife Rescue – Atlantic Side

Zone 4

Zone 3

Zone 2Zone 6

Source: GUPC Submittal 01 35 29 - 009

Zone 1Zone 5

PAC-1/ Camino de Cruces National Park (Panama)

PAC-2 /Campana National Park (Western Panama)

PAC-3/ ANAM Center for Forestry Reearch (Chiriqui)

PAC-3/ Gral. Omar Torrijos (Piedras Gordas – Cocle)

PAC-2/ Parque Nal. Gral. Omar TorrijosNational Park (Bajo Grande/Ojo de Agua–Cocle)

Dreding of the Lake / Baru Volcano National Park (Chiriqui)

PAC-3/ Chagres National Park (Panama-Quebrada Oscura)

PAC-2 /Gral. Omar Torrijos National Park (La Rica/Caño Sucio–Cocle)

PAC-4 / Montuoso Forest Reserve (Herrera)

PAC-3 y PAC-4 / Center for Forestry Research ANAM (Chiriquí)

Reforestation Projects under Execution

0 10 20 30 40 50 60 70 80 90 100

Rev. Mar-2010

100%

100%

100%

100%

100%

100%

100%

100%

7%

8%

BaruVolcano30 Ha

BaruVolcano30 Ha

Gral. Omar Torrijos180 Ha

Gral. Omar Torrijos180 Ha

Campana30 Ha

Campana30 Ha

Camino de Cruces115 ha

Camino de Cruces115 ha

Chagres40 Ha

Chagres40 Ha

Forestry Research Center 100 Ha

Forestry Research Center 100 Ha

Montuoso Forest

Reserve 50 Ha

Montuoso Forest

Reserve 50 Ha

All projects include 5 years of MaintenanceAll projects include 5 years of Maintenance

New Atlantic Locks UpdateNew Atlantic Locks Update

Cleaning and Grubbing of Atlantic Locks AreaCleaning and Grubbing of Atlantic Locks Area

1939-1942Excavations1939-1942

Excavations

July 2009July 2009

March 2010March 2010

Clearing of Pacific Locks AreaClearing of Pacific Locks Area

Pacific Locks AreaPacific Locks Area

Pacific Locks SitePacific Locks Site

Cleaning and Grubbing – Pacific Locks AreaCleaning and Grubbing – Pacific Locks Area

The Suez Canal will compete with Panama for markets in Asia. It is cheaper for markets west of the black line to use Suez. The line shifts depending on the relative cost of Suez to Panama.

But the success of the Suez route will depend on USEC ports’ ability to handle the cargo. They are not there yet.

Corozal Market Study35

VietnamLaos

Cambodia

Thailand

Myanmar

Bangladesh

India

Malaysia

Philippines

IndonesiaSUEZ

PANAMAVietnam

Laos

Cambodia

Thailand

Myanmar

Bangladesh

India

Malaysia

Philippines

IndonesiaSUEZSUEZ

PANAMA

On the Asia-USEC trade, there is a huge increase in the “accessible market” simply by switching to an 8000 TEU ship, implying that the Canal route gains share.

4000 TEU ship46% of US market

8000 TEU ship63% of US market

Corozal Market Study36

Assumptions$400/MT bunkerCanal tolls based on 2011 proposalCurrent ship charter ratesInland move by rail

Based on Halcrow, Princeton Consultants route cost model – June 2010

IMPROVE LOGISTICS CAPABILITIES

q Tocumen Airport

IMPROVE LOGISTICS CAPABILITIES

qPanama-Pacifico Project

IMPROVE LOGISTICS CAPABILITIES

qAditional terminals in the Pacific side

IMPROVE LOGISTICS CAPABILITIES

qRailroad connectivity

IN THE LONG RUN…

qSituation awareness

AGENDA

qConnectivity and PanamaqHow did it happen? What do we make

of it?qHow to make it sustainable?qWrap up

SSAMEXICO - MANZANILLO

TUXPAN

Last…. comments

qFair competition is good.qMonopoly is good , if its yours.qLogistic is the flavor of the monthqAdded valueqTotal cost- no ratesqTotal cost- no ratesqTrade+ securityqCustoms-Quarantine.qFree trade agreementsqEnvironmental issues qSlow steamingq You are as good as your last ship

THANKSTHANKSTHANKSTHANKS