Less Connectivity, More Expensive Products

Since mid-July, the main companies transporting maritime cargo from the Port of Santa Tomas in Guatemala stopped operating the direct route to Europe, which will raise between 20% and 25% the costs of imports and exports.

Monday, August 12, 2019

After six decades of keeping the direct route to European ports in operation, the main shipping companies departing from Puerto Santo Tomás de Castilla in Izabal such as Maersk, Hamburg Sud, MSC, CMA-CGM, Hapas Lloyd and Sea Trade, decided not to re-operate the route concerned, leaving only one company with a multipurpose transport ship as an option to move cargo to Europe.

See "Puerto Santo Tomas Loses Competitiveness

The companies argue that they withdrew the direct route because the times are not effective, and excessive bureaucracy in management and work situations. Another factor that influenced the decision is that January 1, 2020 will enter into force new environmental regulations for ships.

Elieser Castellanos D´Bourg, president of the National Association of Shipowners of Guatemala (Asonav), explained to Prensalibre.com that "... none of the main companies is embarking or disembarking from the Empornac to Europe, and there is transshipment with other terminals for their destination (and vice versa). It does not mean that the volume of maritime cargo -between the two blocks- is lost, but that it will increase the costs on average in a range of 20% to 25%, both for imports and exports".

Also see "Losses Due to Lack of Port Infrastructure

The article adds that "... Guatemalan goods will be destined for Port Moin, in Costa Rica, as the logistics arm of Central America for direct maritime services to Europe. That is to say that in a small ship and of smaller size they will transfer the goods to that terminal and from there another one with greater capacity will come to pick up or deliver the loads. This measure will also affect the goods of El Salvador, Honduras and Nicaragua that have as final destination the European ports."

The suspension of the direct route to Europe, occurs in the context in which the authorities of the seaport project the execution of works over the next five years, such as the construction of a terminal for cruise ships, one for bulk solids and liquids, and another for containers.

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