Maritime Transport: Too Expensive to Be Sustainable

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.

Thursday, June 4, 2020

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.

See "Central America: Disruption of the Logistics Chain"

The closure of the transit took place after Costa Rica unilaterally decided that as of May 18 only transporters who make direct transit from border to border would enter Costa Rican territory, whose units must be subject to police surveillance.

Costa Rican authorities went to this extreme, arguing that they are trying to mitigate the outbreak of covid-19, and Nicaragua responded by closing its border post.  The commercial blockade was lifted until May 31, after the Central American countries reached an agreement.

Check out the "System for Monitoring Markets and the Economic Situation in Central American Countries", developed by CentralAmericaData.

Sergio Capon, general manager of Impresora Delta, told Nacion.com that "... during the regional land transport crisis I had to send a van to Guatemala and another to Panama, by sea, with packaging material manufactured by Impresora Delta. The cost of this transport was higher between 50% and 80% than the land one, but I had to do it to meet the customers' needs, because the companies have an established schedule."

The publication states that "... costs can imply a 60% increase, only from port to port. If the final destination is internal to the countries, the total increase can be up to 110%, said Procomer in a written response to consultations from La Nación."
 
When land transport becomes difficult to move around the region, as is the case recently or for the 2018 political crisis in Nicaragua, the issue of operating a cargo ferry between El Salvador and Costa Rica comes back to the fore. However, after several years, this has only remained in the planning stage.

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More on this topic

Regional Trade: Panama Applies Reciprocal Measures

May 2020

After Costa Rica imposed several restrictions on the movement of cargo entering its territory, the Panamanian government limited the permit for Costa Rican carriers to remain in the country to 72 hours.

The transit of goods in the region is becoming more complicated every day, since it is argued that the propagation of the covid-19 is being mitigated.

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.

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.

Regional Coastal Trade on Pacific Coast

June 2012

A feasibility study has been started on a freight system between the Pacific ports of the region using shallow draft boats.

Launched six years ago, the project has now been reactivated in response to the need to seek alternatives to the increase in freight rates.

The goal is "to accelerate intraregional trade, by eliminating the passing through customs, as happens with land transport."

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