Randall Castillo discusses how COVID-19 has helped redefine Panama’s international trade

The COVID-19 pandemic has upended logistics processes around the world. Initially, everything was brought to a halt as governments and businesses worked to determine the best courses of action to combat the spread of the virus. Since then, what has emerged, in many ways, is an improvement to established protocols and norms that will actually facilitate better and more efficient trade going forward.

This has been especially true in parts of Latin America, and Randall Castillo, an expert in import and export operations in Panama and Costa Rica, as well as the founder of RACO, a firm dedicated to small business finance, discusses the benefits that have emerged for Panama’s trade industry.

The National Union of Customs Brokers of Panama (UNCAP) highlights that, in the face of the Covid-19 issue, customs broker agents, the Customs Authority and all government institutions that have to do with the importation and supply of products for the country have developed customs processes digitally.

Castillo points out that an important coordination work has been developed with the Customs Authority, and this institution has been very diligent in transforming practically all its document processes in a virtual way. “This digitization has been very positive to effectively and safely streamline the entire process required when importing the products and supplies required by the country, complying with the health regulations of distancing, avoiding crowds and helping in the fight against the pandemic,” explains Castillo.

For the industry, it is important that all other government institutions join this process of modernization and technological development that will continue to have a positive impact, making the country more competitive, transparent and contributing to the economic development that the nation demands today.

Castillo indicates that there are many paperwork requirements when it comes to importing different products and goods, and the relationship of customs broker agents is permanent in order to obtain good approvals and other documents with institutions such as Aduanas, Minsa, Mida, MiAmbiente , AMP, the Fire Department, among others. Many of these processes are done physically, and digitization is imposed as a real need to improve and streamline the entire process.

Adds Castillo, “Our call is that we advance as a country on this issue of digitization, that at the end of the pandemic we maintain the positive changes that have been made in this direction and that we achieve that all other institutions reach the goal of digital transformation imposed by the new normality for the country and the world, in the logistics and financial issue with much more reason.”

Other changes, such as the growth of omnichannel, the sale of the web channel and collaborative work with internal teams and suppliers, are here to stay, as well. Castillo asserts that businesses should be sought with restriction of expenses, restriction of investment in inventories and with clients who demand quality of service and higher operating costs. Finally, he pointed out that companies that are not in a position to adapt and accommodate to changes will be very difficult to maintain their continuity.

With the current uncertainty, Castillo pointed out that changes in habits were activated, online channels began to be activated, takeaway (home delivery or delivery) was accelerated to distribute food and merchandise in general. The lines of prevention products for respiratory issues began to accelerate, with an excessive increase in the consumption of OTC drugs, which accelerated sales, contrary to the normal cycle. Regarding medium and long-term treatment lines, for more serious diseases, the country began to see that the purchase of medicines was being advanced. As a result, “Supply chains that were stable, that presented seasonal demand, began to present irregular sales, which generated a bullwhip effect throughout the chain because our internal and external supplies and those of our customers began to suffer from resilience, because As an industry we were not prepared for peaks of that magnitude. Consumption in stores decreased as there was less flow of people,” explains Castillo.

He indicated that three main axes and aspects that any industry must take into account to face the current context in the face of COVID-19 and, in the medium term, thinking about how to recover normality. These include the health and safety of people and employees, better planning and a redefinition of the consumer forecast, and how to deal with variability and high demands.

Asserts Castillo, “When we talk about channel migration, it means that we must act quickly to adapt operations and take care of working capital, guaranteeing our service level standards. As for omnicity and e-commerce, they have to be launched, but come out very solid in a long-term, profitable model and taking care of the industry.”

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