Small island creating states (SIDS) have seen a 9% decline in maritime connectivity over the previous decade, leading to increased prices & decreased competitiveness.
Funding in port infrastructure, capacity-building and local weather resilience is critical to sort out challenges linked to provide chain disruptions and maritime connectivity.
UNCTAD’s Assessment of Maritime Transport 2024 reveals extreme challenges going through the maritime sector in Latin America and the Caribbean. Local weather disruptions, geopolitical crises, and commerce imbalances have considerably impacted the area, with disruptions within the Panama Canal serving as a stark instance of the broader points.
Local weather disruptions affect commerce
Extreme drought in 2023 and early 2024 decreased water ranges within the Panama Canal, forcing ships to take longer, dearer routes. This hit commerce from the Americas to Asia notably arduous.
The shift led to a 31% improve in crusing distances and a discount in cargo volumes, exposing the Panama Canal’s vulnerability as an important maritime route. Whereas improved water administration helped in mid-2024, transits remained down by about 20% in comparison with 2023. UNCTAD’s Assessment highlights the urgent want for climate-resilient port infrastructure throughout the area.
Freight charge fluctuations and commerce shifts
Freight charges throughout the area fluctuated all through 2023. Charges on Europe-to-South America routes dropped by 36%, whereas Africa-to-South America routes noticed a 20% improve. This volatility has been fueled by geopolitical shifts, together with Egypt’s resolution to supply grain from Brazil and the U.S. as a substitute of Ukraine.
Small island creating states (SIDS) face extra challenges with a 9% decline in maritime connectivity over the previous decade, leading to increased prices and decreased competitiveness. Whereas Trinidad and Tobago serves as a key hub, smaller ports wrestle with inefficiencies, additional driving up prices. With out motion, these connectivity gaps will deepen commerce inequalities.
Freight charge fluctuations and commerce shifts
Freight charges throughout the area fluctuated all through 2023. Charges on Europe-to-South America routes dropped by 36%, whereas Africa-to-South America routes noticed a 20% improve. This volatility has been fueled by geopolitical shifts, together with Egypt’s resolution to supply grain from Brazil and the U.S. as a substitute of Ukraine.
Small island creating states (SIDS) face extra challenges with a 9% decline in maritime connectivity over the previous decade, leading to increased prices and decreased competitiveness. Whereas Trinidad and Tobago serves as a key hub, smaller ports wrestle with inefficiencies, additional driving up prices. With out motion, these connectivity gaps will deepen commerce inequalities.
Caribbean ports below strain
Ports within the Caribbean are going through mounting operational challenges. Port dealing with fees are two to 3 occasions increased than in related ports globally, worsened by inefficient processes, poor administration, and infrastructure shortages. The competitors between cruise ships and cargo vessels provides to the pressure, additional limiting commerce effectivity.
For SIDS, whose economies rely closely on maritime transport, these inefficiencies current a severe improvement problem. The imbalance in commerce flows, the place inbound vessels arrive absolutely loaded and depart empty, exacerbates the issue, driving up prices and lowering the viability of maritime providers.
Pressing motion wanted
At UNCTAD’s World Provide Chain Discussion board held in Could 2024 in Barbados, stakeholders mentioned the area’s connectivity disaster, figuring out inefficiencies in customs processes, an absence of infrastructure, and restricted competitors as key points. The discussion board’s suggestions targeted on consolidating cargo volumes, fostering collaboration amongst shippers, and boosting port infrastructure by way of personal funding.
The discussion board additionally careworn the necessity for local weather adaptation and resilience-building, notably for ports susceptible to excessive climate occasions. Elevated financing and capacity-building for these initiatives are vital to safeguarding the way forward for the area’s maritime sector.
UNCTAD’s Assessment of Maritime Transport 2024 requires pressing reforms to handle these challenges. A protracted-term technique targeted on local weather resilience, port effectivity, and truthful entry to maritime providers is important to make sure sustainable improvement within the Latin America-Caribbean area. With out motion, the area’s maritime sector dangers additional pressure, undermining commerce and financial development.
