TBY talks to Juan Carlos Croston, Vice President Marketing & Corporate Affairs of Manzanillo International Terminal-Panama (MIT-Panama), on creating capacity when volumes are down, its CSR initiatives in Colón, and future goals.

 Juan Carlos Croston
Juan Carlos Croston is an active member of the Maritime Chamber of Panama (president of the board 2014-2015), the Caribbean Shipping Association (current vice-president 2015-2016), and other local and international organizations. In 2014, Croston was granted the Distinguished Alumni Award by the International Maritime University of Panama and in 2015 was named by Lloyd’s List in their “Next Generation 2015” list of worldwide maritime leaders, the only one from Latin America. He holds a BS degree in nautical engineering from the former Nautical School of Panama and an MSc degree in maritime affairs from the World Maritime University in Malmö.

How do you apply your company's values of efficiency, productivity, and readiness for the future in Panama?

The greatest challenge in this business is trying to create capacity when volumes are down and being prepared to take care of the capacity when volumes go up. The trick here is to create capacity in a way that can match demand without spending a large amount of money. What we have done in many cases in our terminal is to use the same footprint that we have and add more technology. In the end, it helps to move more cargo to the same terminal. We seek to do a little bit through more advanced technology equipment to lower costs. The biggest problem that we have is that Panama's population is only 4 million; therefore, we cannot compete with larger markets. The challenge is to predict what is next and sometimes we hit the target and sometimes we get close and then adjust. We cannot, however, just invest a large sum of money and wait for the market; we have to create capacity and normally it takes 18-24 months to create capacity and a new dock.

How is the company positioned to boost the development of Colón?

When we started in 1995, we had no idea what corporate social responsibility was. All we knew was that people lived there and we wanted them to work with us so we decided to have a two-phase program that focused on giving people the best place to work and a great place for them to live. We focused on our people and then looked outward and built hospitals and schools and invested in baseball and soccer teams, as well as in education. We need to keep the people of Colón in Colón, because if they all migrate elsewhere, we will not see the benefits. We are involved in many activities and are the biggest in Colón in this respect. The most important thing is that our people now run operations in Haiti, Colombia, and Vietnam because in the end the idea was to offer a career and not just a job. This has worked and is one of the things that we are truly proud of; all the other parts such as equipment, cranes, and technology can easily be found in any part of the world. The part we are concerned with now is that the type of labor we need requires another level of education that we are not getting. This is the biggest challenge; how we do the job on the existing education level. We need more than what the schools give us; we need what the market demands.

What are your targets, priorities, and ambitions for 2017?

We need to consolidate our logistics hub but change the concept a little as we have to go more into developmental high-tech products as the real cost of labor in Panama makes the prices of products uncompetitive. We need to look into products where we add labor costs. This is where we are talking about high tech. We also have to look at electronic services such as Amazon and Alibaba because all companies need a place where they can dispatch orders. In Latin America, having a Miami zip code is a bonus; customers send everything to the Miami zip code and everything gets forwarded to their country. Why can't we do this in Panama and become a major center of distribution of e-commerce as well? The free zone concept is there but it will not grow much more. We need to have free zones, added value, e-commerce, an airline hub, as well as cargo as we do not handle enough. The dream is to consolidate this and not just have each sector grow individually; when we put it together the package and value proposition that we can put into commerce—this is the ideal scenario. This is great for business because that generates cargo.