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Evaluation of Panama´s Logistics PerformanceOctober 2012

Dr. H. Donald RatliffRegents Professor of LogisticsExecutive Director – Supply Chain & Logistics Instit ute

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Logistics Performance Index

• Index and ranking based on a worldwide survey of global freight forwarders and express carriers

• Compares 155 countries• Survey conducted every two years• Panama dropped from 51 st in 2010

to 61 st in 2012• Does it matter?• Is it fair?• How should Panama’s logistics performance be

evaluated?• How can Panama’s logistics improve?

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Logistics Performance Index

� International LPI– Qualitative evaluation of six core logistics performance components– Sorts countries by scores and ranks– Each surveyor rates 8 countries

� Domestic LPI– Qualitative and quantitative assessment of the countries logistics

environment– Provides indicators, no ranking– Each surveyor rates only the country they work in

� Ranking is only based on international LPI

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Panama’s Score International LPI

� Partial explanation– Small change in score– Small sample of opinions– Rank is from people

outside Panama– People who rank Panama

may not know Panama logistics

– Focus of LPI is on import & export not transshipment

� Currently working with World Bank to improve LPI

2.89

3.02

2.93

2.8

2.85

2.9

2.95

3

3.05

2007 2010 2012

LPI S

CO

RE

Year

LPI SCORE 2007- 2012

OVERALL…

LPI 2007 2010 2012

RANK 57 51 61

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Panama LPI Radar Chart

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2

3

4

5Infrastructure

LogisticsCompetence

Timeliness

InternationalShipments

Customs

Tracking & Tracing

2007

2010

2012

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Survey of Panama’s Logistics StakeholdersNeed for improvement to increase the productivity of

Panama trade and transport:

0%

10%

20%

30%

40%

50%

60%

70%

Seaports Airports Roads Rail

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Ability to Track and Trace Consignments

0%

10%

20%

30%

40%

50%

60%

Air Sea Road Rail

Very lowLowAverageHighVery high

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Panama’s International “Logistics” Image

� Panama Canal� Many projects underway

– Canal expansion– Roads– Metro– Bridge of the Americas– New Atlantic port

� Network connecting Panama� Ideally Panama functions

like a single port� Evaluating present and

future

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Logistics Portal

Center Approach to Evaluation

Logistics Capabilities

Logistics Risk Assessments

Global Trade Trends

Logistics Roadmap

Needs Assessments

Projects

http://logistics.gatech.pa

Analyze improvement alternatives for Panama’s logistics cabinet

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What We have learned about logistics

performance

� Network is fragile� Ports sometimes refusing business� Ports near capacity� Rail capacity dependent on port operations� Labor issues magnify the problems� Poor land connectivity on the Pacific� Arrivals coming in bigger batches � Big ships not well planned for� Inconsistent integration ports/railroad� Customers unhappy with lack of integration� Lack of visibility� Poor awareness of integration issues � SIGA perceived to be not working� Many customs activities perceived to not add value� No network performance measures

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Transshipment is Key to Panama’s Future

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Direct service

� Must measure network performance– Single data repository– Mandatory reporting

� Must improve network performance– Port/rail integration

� Must improve network visibility– New technology

� Must increase network capacity– Pacific port– Rail connectivity– Land connectivity on Pacific

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Thank You

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