THE HUB CONCEPT

Panama 2014 | TRANSPORT | INTERVIEW

TBY talks to Carlos M. Urriola Tam, Executive Vice-President of Manzanillo International Terminal (MIT), on the development of maritime and logistics operations in Colón.

Carlos M. Urriola Tam
BIOGRAPHY
Carlos M. Urriola Tam is Executive Vice-President of Manzanillo International Terminal (MIT) and Senior Vice-President of Carrix Inc. He joined MIT in 1995 as its Assistant Vice-President of Marketing, and worked his way up to his current position, which he assumed in 2012. He took on his role at Carrix Inc. in 2011. He has served on numerous national and international trade and shipping organizations. He was President of the Maritime Chamber of Commerce of Panama in 2001-2002 and was reelected for a second term. He was President of the American Chamber of Commerce of Panama in 2006-2007 and also President of Junior Achievement in 2006-2007. From 2006-2009, he was Vice-President of the Caribbean Shipping Association, and subsequently President in 2009-2012.

What has your growth strategy been since commencing operations in 1995?

We began in 1995, shortly after the Noriega era, hence at a time of skepticism toward Panama in terms of investment. We decided to build a terminal on a former US base with an investment of $150 million, and to date have invested $650 million with plans to invest a further $250 million. When we arrived in Panama there was a total shipping volume of 100,000 TEUs, while in 2013 the level was at almost 7 million TEUs. As pioneers, we ourselves moved 2 million TEUs, and we became the first company to establish the hub concept in Panama.

How does Manzanillo International Terminal (MIT) contribute to national development?

When we set up in Panama, the unemployment rate in Colón was very high. Moreover, many did not believe that local labor could manage an efficient port. Therefore, we not only trained our people well, but actually created careers for them. Some of them have been with us for 18 years. MIT has created 1,200 direct jobs, and 90% of the workforce is from the Colón area. We also contribute by generating the economy surrounding the terminal. Apart from these 1,200 direct employees we also employee around 300 security guards and 500 individuals from other unions in Colón.

MIT is affiliated with Carrix Inc., whose main division, SSA Marine, is based in Colón. What is the importance of Panama for Carrix Inc. and what are its expansion plans?

Our company is based in Seattle, Washington, but our international branch was established in Panama. We did so before anyone else started to look into Panama because of its regulatory advantages. And from here we supervise our operations in Vietnam, Mexico, Colombia, Chile, Panama, and Costa Rica. We have been able to grow from here and today have three operations in Colombia.

What was the financial performance of MIT in 2013 and what are your expectations for 2014?

In 2013 there was a slight decrease in volume based on prices in neighboring countries like Venezuela, and some restrictions in Colombia. We are looking to other markets in order to resolve this issue. However, after growing by rates of 15%-20% every year, such a reduction is not significant in a business like ours. What Panama has to do is not only look at the traditional markets like Venezuela and Colombia, but also other growth markets such as Mexico, Ecuador, or Chile.

According to the Panama Canal Authority, the expansion is going to create around 30,000 jobs related to the logistics industry. What is your assessment of this estimate?

Ports are not a job-generating industry, though auxiliary industry and services involve a substantial need for logistics. The problem is that Panama today does not need to create jobs, as the available jobs outnumber the people available. We foresee more jobs being generated in the logistics supply chain, for which we need to train our people. Everyone needs to be clear about the fact that no economy can sustain this current pace of growth. We would prefer to see growth of 4%-5% over the coming years in order to avoid an inflationary environment, which Panama normally does not experience.

How would you assess Panama's port infrastructure and the government's efforts to improve its capabilities?

We probably have some of the best maritime infrastructure in the world. That is not our problem. Our problem, rather, is how to best connect that infrastructure. We need to be more dynamic in terms of the utilization of e-commerce, and we need to improve customs procedures through the use of electronic document transfers. The next step for us in Panama is to be able to move cargo between air, rail, ports, and trucks, electronically.