When we talk about Panama, the first thing that comes to mind is the Panama Canal, the famous maritime crossing channel that connects the Atlantic and Pacific oceans, greatly accelerating world trade for more than 100 years.

Over time, Panama became more than a point of passage, evolving into a center of attraction for investments and businesses due to its legislative innovations to attract capital from all over the world, and the easy and very rapid opening process for off-shore companies (which was abused by various companies and individuals worldwide and which led to a global fiscal and media scandal, but which has since been alleviated thanks to the prompt action of the Panamanian authorities). Panama is still a great country to businesses to invest in with many benefits, particularly for those involved with buying and selling goods.

One of the reasons for this is that in the middle of the last century, Panama sought to take greater advantage of the fact that many ships passed through their country with goods and consequently created the Colon Free Zone.

What is the Colon Free Zone, and how does it help businesses?

The Colon Free Zone (Zolicol or ZLC) is a first-generation free zone located within the city of Colon, Panama, on the Atlantic entrance to the Canal. It is located in the southeastern corner of the City of Colon, occupying 2.4 square kilometers, and it is the largest free port area in ​​the Americas and the second largest in the world, after Hong Kong. It generates an annual volume of close to $20 billion dollars per year in imports and re-exports.

The Colon Free Zone allows companies to save money by avoiding many tax obligations (in Panama) related to their commercial activity while operating within this customs area. There are several available tax benefits offered by the Colon Free Zone:

• There is a tax exemption on imported products for re-export
• No import or export fees or quotas are paid
• No taxes are paid for services that have effects abroad
• Taxes are not paid for the profits obtained in operations abroad. The municipal taxes are not applicable to the companies that operate in the Free Zone
• There are no taxes on capital investments
• Low costs in the rental of land and buildings
• Only 5% tax on dividends

Within the zone, companies can enter, store, display, condition, pack, unpack, split shipments, reload, assemble, group, label, mix, conserve and generally perform all activities related to the operation and handling of all kinds of goods, products, packaging and other commercial effects for import, export and re-export.

The zone includes a collection of services and import centers, storage space, packaging and re-export opportunities for products from all parts of the world, in a diverse set of industries ranging from special electrical products to pharmaceuticals or liquors, among others.

Imports mainly come from China, Singapore and the United States, and goods are then most commonly exported throughout South America, Central America and the Caribbean.

How is the Colon Free Zone organized?

The Colon Free Zone is composed of 9 segregated areas. The most well known is the Casco Viejo, where the majority of company showcases and showrooms are concentrated. The second best known is the France Field area, where the merchandise storage center operates due to its proximity to the Manzanillo International Terminal and Colon Container Terminal ports.

The other 7 segregated areas of the free zone are Coco Solo, Coco Solito, December 20, Logistics Park, Enrique Jiménez Airport, Margarita Island and Davis, where companies like HP, Huawei, Koyo, Sanyo and Sony operate multinational distribution centers.

The transportation of goods in the Colon Free Zone operates through a multimodal transport system called the Multimodal Logistics Platform of World Trade. The system integrates the seaports at Manzanillo International Terminal, Colon Container Terminal, and Puerto de Cristobal; the Panama Railroad; the Enrique Adolfo Jiménez Airport and the Panama-Colón Highway. This free zone is visited by some 150,000 tourists a year from all parts of the world, particularly from the Caribbean, Central and South America, and the U.S.

How to operate from the Colon Free Zone

There are three ways to operate from the Colon Free Zone.

1. Leasing available land within the free zone and building a building. This lease can be signed for 20 years with the option to be renewed.
2. Another way is by renting a space destined for that purpose within the Colon Free Zone itself. This lease is monthly and is paid according to the size of the space in square meters, as well as the duration of the contract.
3. Lastly, you can opt for public storage. This is most common when the expected volume of business is not high enough to justify the rental of a space or the construction of a building. In this case a storage company can provide all the required services.

The payment of these services is usually done on a monthly basis, depending on the volume of merchandise stored. For this, previously the person or society must register with the authorities of the Free Zone.

Opportunities abound for businesses in Canada and worldwide

With all of these available benefits, it could be very interesting for some companies in Canada to establish immediate distribution operations of their products for Latin America. By doing so, they could continue taking advantage of the commercial treaties that are in force between Canada and other Latin American countries, reduce the transit time of goods, and offer more agile transactions for Canadian sellers and Latin American buyers. Companies can also hire local staff to improve customer service in their own language. It will be very advantageous for Canadian businesspersons to expand their vision to be more creative with the multiple tools that exist in the zone.

The post How your business will benefit by operating within Panama’s free trade zone appeared first on Trade Ready.

The past few decades have brought about key advances in shipment tracking. These advances have improved safety, efficiency and security in the industry, making aspects of shipping significantly easier and less stressful than they had once been.

1. Automated Identification System (AIS)

In use since 2002, the Automated Identification System requires ships of over three hundred tons to carry transponders. These transponders transmit the ship’s position to other nearby ships, and to maritime authorities, if the ship is near land.

AIS transponders are helpful for providing accurate location information for traveling vessels. However, because they use very high frequency radio waves which travel horizontally across the globe, they only have a range of about fifty nautical miles.

Effect on trade

The biggest benefit that AIS provides is collision prevention, especially in foggy or inclement weather, or narrow waterways such as the Strait of Gibraltar. In these conditions having accurate positioning information about the ships around is crucial to preventing accidents.

For example, in 1987, the passenger ferry MV Dona Paz crashed into the MT Vector off the coast of the Philippines, killing over four thousand people. If AIS had existed at this time, the accident could likely have been prevented.

AIS also gives other important information to maritime authorities, such as speed, heading, and cargo. All of this data helps sea transport to flow more smoothly, with fewer accidents and greater efficiency

2. ORBCOMM Satellite AIS

Beginning in 2004, the company ORBCOMM began launching satellites into space to attempt to vastly increase the reach of AIS. By 2008, in partnership with the U.S. Coast Guard, ORBCOMM launched a total of six satellites. All of these satellites were equipped with an AIS transponder. This means that the satellites were capable of receiving and transmitting very high frequency radio waves from ships at sea.

These radio waves extend much further into space than they do laterally across the globe, greatly expanding the previous range of only fifty nautical miles. In fact, because of these satellites, ships can now be tracked in near real time from their departure to the time they reach their destinations.

Effect on Trade

Significantly expanding the reach of vessel tracking had many benefits. Chief among them are increased business efficacy, hazardous weather avoidance, and improved search and rescue capabilities.

With greater shipment tracking, businesses can keep a much closer eye on their vessels as they move merchandise back and forth across the oceans. This adds a higher element of security when shipping. It also enables businesses to more accurately predict when a ship will reach port.

This means that companies can unload ships faster when they do come in, because they can time the operation more precisely.

For example, if you have a cargo ship that you know will be arriving at the Port of San Francisco at 9.00 a.m., you can have your entire crew already there waiting to unload by 9.00 a.m. This is much more efficient than trying to guess the time of arrival, potentially being off by hours.

In terms of hazardous weather avoidance, it’s much easier to steer a ship out of harm’s way if you know exactly where the ship is, and where the dangerous weather is going to be. The more accurate the tracking, the more easily bad weather can be avoided. For example, if a shipping company realizes that one of its vessels is heading straight for a violent storm, it can contact the captain, and instruct him to steer the ship west for a hundred miles. Once the storm is avoided, the ship can resume its initial heading.

Finally, satellite AIS enhances search and rescue missions by providing more accurate vessel location data. Imagine trying to find a distressed vessel in the middle of the Pacific Ocean during a monsoon without advanced tracking equipment!

Satellite AIS also gives maritime authorities the power to see if there are any other vessels in close proximity to the distressed vessels. If there are, they can contact the vessel and ask the captain to help the ship that’s in trouble. This may be critical if the closest search and rescue authority is thousands of miles away.

3. Vesselfinder.com

Vesselfinder.com is a website created in 2012, offering free AIS tracking for over sixty thousand ships across the globe in real time! Anyone who wants to find a major commercial vessel can simply log on and search for the ship by name.

Vesselfinder.com represents an incredible step forward for the shipping industry. Whereas long-range AIS tracking data used to be exclusive, and require a licensing fee from ORBCOMM, Vesselfinder.com does it for free. This means that ships are now easier to track than ever before.

Effect on Trade

Vesselfinder.com has taken a complicated and expensive process and made it instantly available to anyone in real time. If your company has ordered a large quantity of parts for solar panels in Asia, you can literally log on to VesselFinder.com and watch the ship carrying your parts cross the ocean!

Vesselfinder.com has also added a new level of security to international shipping. It gives companies more power to monitor their shipments. This increased level of security gives companies more confidence in making business transactions that require international shipping. A lot of the mystery has been removed from the process and a considerable amount of oversight has been added. This is a tremendous development for international trade.

Have any of these shipping technology improvements changed your shipping practices? Any others that come to your mind?

The post Global trade professionals all love these 3 advances in shipment tracking appeared first on Trade Ready.