An analysis of maritime transport and its costs for the Caribbean

Includes bibliography

The economic costs associated with landlocked status

Two Latin American republics, Bolivia and Paraguay, lack sovereign access to ocean ports. Their landlocked status effectively forces them to export and import products through borders with neighbouring countries; for this purpose, they frequently use land transport modes which are intrinsically more costly than ocean transport. However, being distant from ocean ports is an attribute not only of landlocked countries; but also of states or provinces, such as Mato Grosso, in Brazil, or Tucumán, in Argentina, which belong to countries with direct access to the sea. If perfect political and economic integration were to be achieved in the region, the distances and topographic accidents between points such as La Paz, Bolivia, and Arica, Chile, or Asunción, Paraguay and Paranaguá, Brazil, would remain unchanged. What would disappear would be the delays at border crossings and their related costs. For the two landlocked countries, border expenses, although significant, are a relatively small fraction of the cost of the land segments of international transport. More important for these countries, are the dependency of infrastructure services and the institutional framework of the transit countries for the transport of their external trade.

Recent increases in shipping costs and their impact on exports from Latin America

This issue of the FAL Bulletin is based on a study prepared by ECLAC which works out a provisional approach for estimating the impact of increases in freight rates on exports from Latin America during the last few quarters. The total cost of exports from the region reflects the increases in three different components: the quantities exported, the prices of the goods and the freight charges. The influence of each of these is estimated.The information bases used are comprised of data obtained from the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD), the Economic Commission for Latin America and the Caribbean (ECLAC) (International Transport Database) and the authors own direct compilation. The conclusion is that total exports from Latin America varied by US$ 5.72 billion in the first half of 2004 compared with the first half of 2003; of this amount, US$ 2,105,000,000 correspond to the variation in price and quantity and US$ 3,615,000,000 represent the increase in export freight rates. When compared with the first half of 2002, the variation is in excess of US$ 8 billion.