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The journey of the tires in the Colon Free Zone

Colon Free Zone Entrance
The Colon Free Zone generates 15,000 direct jobs | Shark Optimization

In 2023 the Colon Free Zone (CFZ) will celebrate 75 years since its foundation in 1948. Despite the passing of the years, it continues to be the largest free zone in the American continent and an important logistics distribution platform in Latin America. The CFZ brings together both regional companies specializing in the distribution of apparel and footwear for international brands, as well as multinationals from the pharmaceutical and technology industries. In this article we will review the main products moved through this free zone and the markets it serves.

In 2021, the CFZ received imports equivalent to 944,522 metric tons, of which new tires, beer, air conditioners and footwear stand out. The value of the goods received amounted to USD 9,037 million. Products such as medicines, perfumes, electronic devices and copier/scanner machines make up the ranking by value.

Electronics, apparel, footwear, and tires often come from Asia, specifically China. Unlike most of the cargo in the free zone, medicines and perfumes do not come from Asia, they are manufactured in European countries and in Mexico. Alcoholic beverages have various origins, the beer that is handled in the free zone is manufactured in Mexico and Belize, while the whiskey comes from the United Kingdom.

The value of merchandise re-exported through the CFZ represented USD 9,603 million last year. The cargo processed in this free zone is usually destined for markets in Central America, the Caribbean and northern South America. These are the destinations for footwear products, apparel, household appliances.

However, in recent years the scope of the CFZ has been expanded with flows of electronic devices to Chile, Argentina, Colombia, Peru and Ecuador, in addition to destinations in Central America and the Caribbean. Perfumes have a significant market in the United States, while medicines are distributed mainly in Central American countries.

An interesting flow is the new tires handled in the free zone. These tires manufactured in China, South Korea, Brazil are distributed to destinations as distant as Paraguay, the Netherlands and the United States.

The logistical advantages and tax benefits of the Colon Free Zone allow the mobilization of products as diverse as tires and medicines. At the same time, its reach has extended beyond the Caribbean region and Central America with electronic and communications devices going to countries of South America. The analysis of the flows in the free zone in the last year shows that the CFZ remains the preferred distribution platform for Latin American countries.

About Shark Optimization

Shark Optimization supports companies in improving the performance of their supply chains through import/export market intelligence, demand and inventory planning solutions, and supply chain optimization. Contact us to learn more.


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