UN/LOCODE: PACFZ📍 Panama

Port of Colon Free Zone (UN/LOCODE PACFZ)

❖ Coordinates: 9.3500°N, -79.9000°E

❖ Time Zone: America/Panama

❖ UN/LOCODE: PACFZ

## About the Port The Colon Free Zone (CFZ), designated by the UN/LOCODE PACFZ, is the largest free‑trade zone in the Western Hemisphere and a pivotal node in Panama’s maritime logistics network. Situated on the Atlantic (Caribbean) entrance of the Panama Canal at approximately 9.35° N, ‑79.90° W, the zone occupies roughly 1,200 hectares adjacent to the Cristóbal container terminal and the Manzanillo International Terminal (MIT). Its strategic location allows vessels to bypass the lengthy detour around Cape Horn, reducing transit times between the Atlantic and Pacific basins by up to 15 days. The CFZ operates under Panama’s Law 32 of 1948, which grants duty‑free import, export, and re‑export privileges to over 2,500 registered enterprises spanning warehousing, light manufacturing, electronics, pharmaceuticals, textiles, and high‑value consumer goods. Because the zone is not a customs‑controlled port in the traditional sense, cargo can be stored, processed, and redistributed without incurring Panamanian tariffs, making it a magnet for transshipment and value‑added logistics activities. ## History The origins of the Colon Free Zone trace back to the early 20th century, when the United States constructed the Panama Canal and recognized the need for a commercial hub to service canal traffic. In 1948, Panama’s Legislative Assembly enacted Law 32, establishing the CFZ as a semi‑autonomous economic enclave administered by the Colón Free Zone Authority (Autoridad de la Zona Libre de Colón, AZLC). The inaugural phase, completed in 1952, comprised 30 hectares of warehouses and basic infrastructure aimed at facilitating the re‑export of U.S. goods to Latin America. Throughout the 1960s and 1970s, the zone expanded rapidly, attracting Asian textile manufacturers seeking duty‑free access to Caribbean and South American markets. The 1980s saw a shift toward electronics and pharmaceuticals, driven by multinational corporations establishing regional distribution centers. A major modernization wave began in the 1990s after the transfer of canal control to Panama in 1999, prompting the AZLC to upgrade customs automation, introduce integrated IT platforms (such as the Zona Libre Online system), and deepen inter‑terminal connectivity with the newly expanded Panama Canal locks. By 2020, the CFZ handled more than US$30 billion in annual trade volume, cementing its reputation as a cornerstone of Panama’s service‑based economy. ## Infrastructure & Facilities The CFZ’s infrastructure is deliberately multimodal, integrating maritime, air, and land links to support high‑velocity cargo flows. Key components include: - **Maritime terminals:** Direct berthage at the Cristóbal Container Terminal (operated by Hutchison Ports) and the MIT, both offering deep‑water access (up to 15 m draft) and Post‑Panamax vessel handling. The zone also maintains several private docks for break‑bulk and project cargo. - **Warehousing:** Over 4 million square feet of Class‑A logistics space, featuring temperature‑controlled zones, bonded warehouses, and customs‑free storage yards. Many facilities are equipped with automated storage‑retrieval systems (AS/RS) and real‑time inventory management via RFID. - **Customs & regulatory framework:** Operated under the AZLC’s one‑stop‑shop model, which consolidates immigration, customs, health, and sanitation procedures. The electronic data interchange (EDI) portal reduces clearance times to under four hours for most containerized goods. - **Transport connectivity:** A dedicated four‑lane highway links the CFZ to the Pan‑American Highway and the Colón–Panama City railway corridor. The nearby Enrique Adolfo Jiménez Airport provides air‑freight capacity for high‑value, time‑sensitive shipments. - **Utilities & support services:** Independent power generation (including a 150 MW combined‑cycle plant), potable water treatment, telecommunications fiber‑optic backbone, and a full suite of banking, insurance, and legal services tailored to international traders. These assets enable the CFZ to accommodate a diverse cargo mix, from containerized consumer goods to oversized project cargo for infrastructure works across Central and South America. ## Economic Importance The Colon Free Zone is a primary driver of Panama’s GDP, contributing approximately 5 % of national output and generating over 30,000 direct jobs, with an additional 70,000 indirect positions in logistics, services, and ancillary industries. Its fiscal regime—zero import duties, no value‑added tax (VAT) on re‑exported goods, and exemptions from municipal taxes—creates a competitive cost advantage that has attracted Fortune 500 firms such as Samsung, Philips, and Procter & Gamble to establish regional hubs. The zone’s annual trade turnover consistently exceeds US$30 billion, positioning it among the top ten free‑trade zones globally by volume. Beyond direct revenue, the CFZ amplifies the Panama Canal’s value proposition by offering shippers a “one‑stop” solution: cargo can be offloaded, stored, processed, and reloaded onto transiting vessels without leaving the Atlantic basin. This synergy reduces inventory carrying costs and enhances supply‑chain resilience, particularly for just‑in‑time manufacturing sectors. The zone also serves as a conduit for foreign direct investment (FDI) into Panama, with cumulative FDI inflows linked to CFZ operations surpassing US$12 billion since 2000. ## Trade Routes & Major Cargo The CFZ’s trade flows are heavily oriented toward the Americas, Asia, and Europe, reflecting its role as a transshipment and value‑addition platform. Principal maritime routes include: - **Atlantic‑Pacific corridor:** Container ships departing from Asia (China, South Korea, Vietnam) transit the Panama Canal, offload at the CFZ for de‑consolidation, labeling, or light assembly, then reload onto vessels bound for the U.S. East Coast, Caribbean islands, or South American markets (Colombia, Brazil, Argentina). - **North‑South littoral trade:** Feeder vessels connect the CFZ with Caribbean hubs such as Kingston (Jamaica), Caucedo (Dominican Republic), and Cartagena (Colombia), facilitating regional distribution of consumer electronics, apparel, and pharmaceuticals. - **Europe‑Atlantic link:** Roll‑on/roll‑off (ro‑ro) and bulk carriers transport machinery, automotive parts, and agricultural commodities from European ports (Rotterdam, Antwerp, Hamburg) to the CFZ for onward shipment to Central American markets. Major cargo categories handled within the zone are: 1. **Electronics & telecommunications equipment** – comprising semiconductors, consumer devices, and network infrastructure, often subjected to kitting, configuration, and warranty services. 2. **Apparel & textiles** – garments and fabrics destined for Latin American retailers, benefitting from duty‑free re‑export and value‑added labeling. 3. **Pharmaceuticals & medical supplies** – temperature‑controlled storage and repackaging for distribution to public health programs across the region. 4. **Automotive components** – engine parts, tires, and accessories assembled into kits for just‑in‑time delivery to assembly plants in Mexico and Brazil. 5. **Project cargo & heavy lift** – oversized modules for energy, mining, and infrastructure projects, utilizing the zone’s specialized berths and heavy‑duty cranes. The CFZ’s ability to seamlessly integrate storage, light manufacturing, and redistributive functions makes it a linchpin of global supply chains that demand speed, flexibility, and cost efficiency. As Panama continues to invest in canal expansion, digital customs modernization, and intermodal connectivity, the Colon Free Zone is poised to retain—and potentially expand—its status as the premier logistics gateway of the Western Hemisphere.

Port Intelligence

UN/LOCODE

PACFZ

Country

Panama

Province / Region

Colón

Latitude

9.350000

Longitude

-79.900000

Timezone

America/Panama

Nautical Map (OpenSeaMap)

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Frequently Asked Questions

What is the UN/LOCODE for Port of Colon Free Zone?

The official UN/LOCODE for Port of Colon Free Zone is PACFZ.

Where is Port of Colon Free Zone located?

The Port of Colon Free Zone is located in Panama, Colón. Its coordinates are 9.3500°N, -79.9000°E.

What time zone is Port of Colon Free Zone in?

Port of Colon Free Zone operates in the America/Panama time zone.

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About the World Port Index

This data is sourced programmatically. The UN/LOCODE is the official geographic coding scheme used by the United Nations for trade and transport locations.

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