Trucking Components and Operations

Area restrictions

Panama City access to the west part of the country is through the Centennial Bridge and there are some restrictions regarding the time when certain trucks can circulate within the city. Trucks with loads bigger than 3.5 tons are allowed to circulate within the blue and red zone from 9:00 p.m. to 6:00 a.m. (See picture below)

Boundaries for load movement within Panama City.

Weights and Dimensions

The Law 10 (Ley 10 de 24 de enero de 1989) regulates weights and dimension of trucks moving loads in public ways. The main regulations the law points out are:

  • Every vehicle that uses 6 wheels or more wheels, or special characteristics of dimensions or weight should carry the “Weigh and dimensions” permit.
  • The “Weigh and dimensions” permit is issued by the Ministry of Public Works (Ministerio de Obras Publicas). The permit should always be in the truck.
  • It is not allowed that the load surpasses more than a meter lengthwise behind or in front the vehicle. The load should have red flags at its extremes when surpasses the vehicle dimensions.
  • Special permits will be defined by the Ministry of Public Works (Ministerio de Obras Publicas). And follow other certain constraints. These special permits are related to oversized and over weighted freight.
  • Vehicles from Central America entering the country should also stick to this law.

The following table shows the maximum lengths and weights allowed to transit around Panama:

Stations

The document establishes 8 weigh and dimensions stations to verify that the trucks are in compliance with the law.

The weigh and dimensions stations main function is to make sure that the law is being followed. The truck drivers have to show their driver license, truck permit, and then the truck is weighted. The weigh and dimensions stations locations are shown in the following picture.

Location of weight stations

  1. Paso Canoas, Chiriquí
  2. Gualaca, Chiriquí
  3. El Embalsadero, Veraguas
  4. El Roble, Coclé
  5. El Espinal, Los Santos
  6. Pacora, Panamá
  7. Chepo, Panamá
  8. Agua fría, Darién

Weigh stations 1, 2 and 4 are the ones that register the trucks leaving from Panama City going to the rest of Central America. All of the stations are situated along the Pan-American Highway.  

Fuel

One of the main aspects to take in consideration in the rate is “fuel”. According to Alberto White of the Commerce, Industrial and Agriculture Chamber of Panama (CCIAP); if the fuel is increasing at a 12% rate, in the same way, the freight rate will increase. In this sense, fuel can be considered as 50% of the cost of transportation (Harris).

Price of Diesel from 2010 to 2014. Source: World Bank 

Among the Central American countries, Panama is the cheapest country in terms of fuel, according to SIECA.  The low price of diesel in Panama comparing it to other countries in Central America is due to low taxes and global position, according to Wolfram González, Hydrocarbons Director. The following table shows the taxes of Diesel in Central American Countries in 2010.

Country USD/gal.
Panama 0.25
Guatemala 0.48
El Salvador 0.57
Honduras 0.61
Nicaragua 0.70
Costa Rica 0.80

Taxes of Diesel in 2010. Source: Cepal.

 

Another factor is the regulation and change of prices in each country. The following table has a summary of regulatory issues per country in Central America. 

Country Type of Regulation Price change (days)
Panama Government 14
Guatemala No Regulation 7
El Salvador No Regulation 14
Honduras Government 7
Nicaragua No Regulation 7
Costa Rica Government 30

Characteristics of the Price in 2012. Source: Cepal.

 

Other aspects that have an impact the rates are seasonality, emergent markets, market falls, and more competition.