Blocks and Costs to the Region

The protests in Costa Rica, which affect vehicle circulation in the country and border crossings, will have a short-term impact on intraregional trade and cargo transport costs.

Tuesday, October 6, 2020

In order to access the $1.75 billion credit that it intends to request from the International Monetary Fund (IMF), the Costa Rican government proposed to tax financial transactions, raise the tax on the profits of companies and individuals, and increase the tax on real estate.

The proposed measures generated a series of protests in the country, and although on October 4 the Alvarado administration reversed the initial proposal to request funding and called for an inter-sectoral dialogue, by October 5, Costa Rica was still semi-paralyzed by blockades on various roads in the country.

In addition to the roadblocks, which until the morning of October 5 totaled more than 30, during the weekend and because of the demonstrations, cargo transport was prevented from passing through the border point of Paso Canoas, which is shared by Costa Rica and Panama.

Rodolfo De La Guardia, president of the Council of the Logistics Company (Coel) of Panama, said to Laestrella.com.pa that "... the blockades are bringing impacts to our economy since they make impossible the exports that are made from Panama and the traffic of merchandise that is sent from here (to other countries of the region). An economic impact on the logistic load is expected, but at this moment it is still too early to give a concrete figure on the losses that would be generated."

The executive explained that although the movement has already begun to restore, it is estimated that between 300 and 500 transport units were affected by the blockades.

Hector Fajardo, member of the Central American Federation of Transport (Fecatrans), informed Prensalibre.com that "... the blockades went from seven to 23 strategic points where cargo transport circulates in Costa Rica, and during last weekend the demonstrators took machinery to be able to obstruct the passage with earthen volcanoes and rocks."

Fajardo added that "... In addition to the delays, the failure to comply with the immigration deadlines established by Costa Rica for heavy cargo pilots is a consequence of the blockades. The five-day deadline is about to expire for most of the pilots, and if they do not free their way, they will stay longer in that country, and there is no option to return either."

According to the member of Fecatrans, there are fines in the cases of the pilots who do not comply with the immigration deadlines. This and the delays, could push up the costs of cargo transportation.
 
See article from Laestrella.com.pa "Businessmen evaluate economic impact of closing Paso Canoas" and from Prensalibre.com "Crisis in Costa Rica: This is what each transport unit loses due to daily delays".



More on this topic

Threats to Cargo Transport Continue

October 2020

Arguing that there is unfair treatment in the other countries of the region, Costa Rican drivers of cargo vehicles block the transit through the border posts of Penas Blancas and Paso Canoas.

The conflict dates back to May of this year, when the Costa Rican government decided that only transporters who made direct border-crossings would enter its territory, arguing that this measure was intended to mitigate the spread of covid-19. On that occasion, most countries decided to apply reciprocity policies.

Cargo Transport: Guatemala Applies Reciprocal Measures

June 2020

Because Costa Rica has imposed several restrictions on the movement of goods entering its territory, the Guatemalan government announced that it will apply reciprocal measures to Costa Rican transporters from June 9.

Guatemala joins the list of Central American nations applying similar measures to those imposed by Costa Rica, which, arguing that it is trying to mitigate the spread of Covid-19 in its territory, decided that from 18 May only transporters carrying out direct border-to-board transit would enter, whose units would have to be subject to police surveillance.

Maritime Transport: Too Expensive to Be Sustainable

June 2020

Currently, transporting goods by sea between Central American countries can increase freight costs by at least 60% compared to the land option, which represents an obstacle to changing the way goods are transferred in the region.

As a result of the closure of the Penas Blancas customs crossing, on the border between Costa Rica and Nicaragua, some businessmen in the region had to resort to the sea route in order to deliver their orders.

Central America: Threats to the Supply Chain

May 2020

Since El Salvador, Costa Rica and Panama have set a 72-hour time limit for freight drivers operating in the region, hundreds of units have decided to halt their operations as a measure of pressure.

Due to the health crisis resulting from the covid-19 outbreak, Salvadoran, Costa Rican and Panamanian authorities decided that the drivers of the cargo transport units entering the country will have only 72 hours to make the formalities at the borders, and to unload and reload the goods from the vehicles.

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