Crisis and its Impact on the Region

The complex economic and political situation that has affected Nicaragua since April continues to affect Central America, where exporters report losses of $45 million.

Monday, October 15, 2018

In the past months, cargo transport faced difficulties in moving goods along Nicaragua's highways due to demonstrators' blockades and insecurity, seriously affecting Central American companies. According to data from the Federation of Chambers and Associations of Exporters of Central America and the Caribbean (Fecaexca), 92% of intraregional trade is by land transport.

See "Regional Cargo Transport Stranded in Nicaragua"

Regarding the situation, Laura Bonilla, president of the Chamber of Exporters of Costa Rica, said to that "... The Nicaraguan crisis has caused great concern in exporting companies in terms of managing inventories, in addition, we know that maritime transport by shipping has weaknesses such as the low frequency of departures of shipments to the region, which blocks the agility of shipments."

Bonilla added that "... The Nicaraguan crisis showed that Costa Rica does not have a short and medium-term plan to solve a closure of land transit routes, in addition to the lack of adequate infrastructure for intraregional trade is notable in a crisis. That is why we believe it is extremely important to establish a plan of action in similar situations, to take rapid measures to solve problems such as transport, the principal focus of trade."

Also see "Cost of Freight Transportation Becomes More Expensive"

Regarding the alternatives that exist to transport goods in the region, the initiative to implement a maritime ferry between El Salvador and Costa Rica was launched weeks ago. On the matter, at the end of August it was reported that the Costa Rican company Desacarga would be the authorized company to offer the maritime cargo service between the Salvadoran port of La Union and Caldera, in Costa Rica.

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More on this topic

Cargo Ferry Between La Union and Caldera Back On the Table

July 2018

In order to minimize some of the impact that the Nicaraguan crisis has had on intraregional trade, the governments of Costa Rica and El Salvador have announced that they are now in a position to start ferry operations.

After unsuccessfully trying to implement this maritime cargo transport option, in May of last year the Spanish shipping company Odiel decided to end the negotiation process to operate the ferry, due to a disagreement over the setting of tariffs that would have to be charged for the service. Since then, the project has been forgotten.  

Regional Trade: Options for Overcoming the Crisis

June 2018

To be able to ship cargo throughout the region, Central American business leaders are exploring options for moving goods using alternative methods, such as shipping.

Representatives from the Costa Rican government and the union of exporters met to address the issue of blockades in Nicaragua and the logistical drawbacks that they have caused, since Costa Rica transports by land about five thousand containers to the other Central American countries every month. As a result of this meeting, both parties concluded that the most viable option is to use maritime transport.

Central America and The Cost of the Crisis

June 2018

With the paralyzation of the cargo transport and the retention of about 6 thousand units in Nicaragua, the region is starting to feel the effects of a crisis with no potential solution in the short term.

The crisis in Nicaragua has created high costs in all countries in the region, as according to the latest report it is estimated that at least some 6,000 heavy cargo vehicles are trapped due to the violence and blockades that have intensified in the last weeks.

Tension in Nicaragua Affects Regional Trade

April 2018

Entrepreneurs from Costa Rica are paying attention to what is happening in its neighboring country, where 90% of Costa Rican exports to Central America are transported by land.

In a statement, the union of exporters noted that "... As representatives of the export sector, we are concerned about the transit of goods to the rest of the Central American region, which receives more than $2.3 billion in Costa Rican products. This considering that more than 90% of exports to Central America are made by land and that Nicaragua, as well as being a destination for our exports, is also our gateway to Guatemala, Honduras and El Salvador".

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