Source: Autoridad Maritima de Panama.
Prior to the mid-1990s, Panama was handling limited container volumes, most of them related to domestic demand, such as for the Colon Free Zone. These volumes did not exceed 200,000 TEUs per year and were mainly handled by the ports of Colon and Cristobal on the Caribbean coast. The subsequent growth of container traffic handled by Panamanian ports can be divided into three phases.
The first phase, between 1995 and 2002, corresponded to the initial privatization of Panamanian ports through concessions to private terminal operators. This led to the construction of new container terminal facilities, such as Manzanillo International Terminal (Carrix/SSA) in 1995 and Colon Container Terminal (Evergreen) in 1997. Panama Ports Company (HPH) took control of the Cristobal and Balboa facilities in 1996, which were then modernized and expanded. The reopening of the Panama Canal Railway in 2001 further supported the repositioning of transshipment containers between the Pacific and Atlantic coasts.
The second phase took place between 2002 and 2011 and marked the setting of Panama as a major transshipment hub. The Port of Balboa gained the most during this phase, which is indicative of the emerging transshipment function that Panama is playing for the transpacific and the west coast of Latin America. This led to a rebalancing of the distribution of the cargo activity between the Pacific and Caribbean coasts. While the Pacific coast accounted for only 5% of the container cargo activity in 2000, this share surged to 50% in 2015. Yet, the majority (more than 90%) of all this activity is related to transshipment and little from domestic demand. This is prone to uncertainties since transshipment traffic may shift to other port facilities if shipping lines change their service configurations.
The third phase is illustrative of a maturity in the role of Panama as a transshipment hub. Since 2011, Panamanian ports have experienced limited growth and a further rebalancing of the traffic towards the Caribbean facade. In 2012, Panama International Terminal (PSA) started operations on the Pacific side, competing with Balboa. While the terminal had an initial capacity of 250,000 TEU, this capacity was expanded to 2 million TEU in 2017 underlining the willingness of PSA to capture additional traffic. On the Caribbean side, growth was initially leaning more on a zero-sum game where a terminal benefits at the expense of another. The expansion of the Panama Canal in 2016 resulted in a decline in transshipment activity as some of the cross-isthmus transshipment could be avoided by using larger containerships.