Amidst escalating geopolitical tensions gripping the world, logistics remains a crucial point of convergence. In the strategic city of Panama, the FIATA World Congress 2024 was held bringing together more than 700 professionals from across the industry, representing 71 countries. In his opening address, FIATA International Federation of Freight Forwarders Associations President Turgut Erkeskin noted that sanctions have affected freight forwarding, leading to near-shoring whereby production is being done closer to the point of consumption, with the origin of goods shifting to Africa and Latin America, though Asia still remains a significant factory of the world. Another development is longer transit times, which have led to demand for more ships at the base as loading takes longer. As always logisticians are guided by reality, that is, looking at international trade as it is rather than what it might be.
In the course of the congress, recent developments were highlighted such as the purchase by DSV of DB Schenker making it the largest freight forwarder in the world, the continuation of the development of a future instrument on negotiable multimodal transport documents and the uptake of artificial intelligence in predictive modelling of logistical operations increasingly replacing probabilistic methods. The industry continues to flourish despite headwinds.
Insights from Panel Discussions
Recognising that the challenge today is not only technology but also the acceptance of variances between systems implemented in different countries, Nachi Mendelow warned that if companies incorporate the use of AI by nitpicking the information they seek, it is likely that the insights they want to find will not be what they need to follow. A remedy he suggested is to track data using multiple sources and adopt industry know-how to interpret the information. Otherwise if we’re not keen AI can lead us to make mistakes faster and more accurately than ever before. Furthermore it’s important to recognize the needs of your company. While some technologies sound more exciting like blockchain, it may be more useful for your business to incorporate simple solutions like digital documents. Not taking for granted that blockchain is an incredible solution, the trouble is defining what the problem is in order to adopt the solution.
On greening logistics, Maxim Rebolledo pointed out that it’s important to make a distinction between products and transportation. Meaning is a product really green or is it greenly transported? While it is key to continue shifting to green logistics, it doesn’t negate the fundamentals of product development and making sure the entire value chain from product to process is becoming more sustainable.
A land divided A world united: The Panama Canal
The congress offered an opportunity to visit one of the modern hubs of logistics in the idyllic city of Panama, the Panama Canal. Acknowledging its value, during his welcoming address Carlos Hoyos Boyd, Minister In Charge of Commerce and Industries of Panama, highlighted the role the Canal plays in the region. The Canal handles between 32-37 ships a day and around 3-5% of world commerce with 300 million tonnes of goods passing through it every year.
“People that come here fall in love with the place and make it better.” Carlos Hoyos Boyd, Minister in Charge of Commerce and Industries, Panama
The Canal has a rich history. The SS Ancon, the first ship to cross the original canal, made its maiden journey in 1914, less than one month after the start of the First World War. As a result of the ongoing conflict this achievement went largely unnoticed. The availability of three natural features made it possible to build the canal at its location: a narrow isthmus, a robust river and abundant rainfall. A dam was set up, after which a navigable man-made lake (Lake Gatún) was created about 26 metres above sea level. To control the flow of the water lock gates are used. Based on a Leonardo da Vinci design from the 15th century, the lock gates are eight stories high, the largest ever made at the time of construction. Three-tier locks link the lake to the Atlantic Ocean (the Gatún locks). The lake further links to the Pacific Ocean through another set of locks (the one-step Pedro Miguel Locks and two-tier Miraflores Locks. Between them lies the Miraflores Lake). Today a computerised hydraulic system controls the gates but for a hundred years they were controlled manually.
To steer the vessels, Panameño pilots board each one and guide it across the canal. Vessels over 700 feet (213.36 m) in length require two pilots, while those over 900 feet (274.32 m) may require three. To keep things simple only the pilot speaks to the command centre. A vessel can be guided by a tug boat or locomotives called mules. Each locomotive can pull 31,000 tons of haulage. It takes eight locomotives to steer the largest vessels. The locomotives aid in towing the vessel, braking and remaining centered to avoid collision with the walls. The widest Panamax leaves less than sixty centimeters of space on each side of the lock walls, making it a daunting effort to navigate the space. The average transit duration through the Panama Canal is from 8 to 10 hours.
Rainforests attract rain, which feeds the water to the lake which is then used by the canal. The water in the canal is moved by gravity. There is no single pump in the canal. The water provides the electricity that powers the gates and valves. The Canal produces fresh water for half of the population of Panama.
The decision to expand the Canal was approved through a referendum. Prior to the construction of the new canal animals were moved, later trees were replanted to ensure the biodiversity of the area surrounding the canal would be maintained. The new canal has rolling gates in comparison to the original canal with miter gates. These double gates allow for contingency whereby one can be repaired in situ without traffic having to be stopped. The new locks host water saving chambers that allow for 60% of the water used in each cycle to be recycled. On the Atlantic side the new locks are called Agua Clara, named after one of the villages that flooded during creation of Lake Gatún. On the Pacific side the new locks are called Cocoli, named after one of the African tribes that were brought to the New World as slaves and later inhabited that area.
There are ambitions for the future such as achieving carbon neutrality by 2050 including by transitioning to the use of hydro-powered tug boats.
Panama City has other logistical value points such as Copa Airlines’ training centre Academia Latinoamericana de Aviación Superior which attracts students from across the Americas; Tocumen International Airport the largest in Central America connecting to over 65 cities; 12 free zones and generally serves as a critical connection across the Pacific and Atlantic Oceans. Indeed it was a strategic choice of a location, at a time when the region’s importance in international trade is increasingly more visible.
References:
Guide to the Panama Canal (2023) Ediciones Balboa, Villena Artes Graficas, Panama.
