July 24, 2021

Port dynamism falls in America, in part because of tension between the United States. and China

Port dynamism falls in America, in part because of tension between the United States. and China

The trade war between the United States and China, together with a series of economic uncertainties that have arisen in other latitudes, explains in part the loss of dynamism that the port industry in the Americas is currently suffering.

This was explained today by Efe the Argentine Ricardo Sanchez, an expert in infrastructure and ports of the Economic Commission for Latin America and the Caribbean (ECLAC), who participated in one of the central panels of the 107th annual convention of the American Association of Port Authorities (AAPA), which is celebrated in the Port of Valparaíso, about 120 kilometers west of Santiago de Chile.

"(The commercial tension between the United States and China is a factor) very important because protectionist barriers obviously attack trade and bypass attack transport and ports," said Sanchez.

"The protectionist measures are seen with expansion in the world and therefore free trade is being affected, and that naturally adds another element to the shrinking growth of the ports," added the expert, who took part in a panel that analyzed the Association between the situation of the world economy and the port industry.

Sanchez said that 2017 was a good year for the growth of trade in the world in both developed and developing countries, but that the global economy is still affected by a crisis that "does not just go" and a series of uncertainties.

In his opinion, that is causing that although the general economic expectations are positive, the rate of port growth is low and that "causes concern".

The expert said that before the economic crisis "the more the economy grew, the more ports grew" and that, specifically in Latin America, the port industry grew up to four times more than the economy, something that currently does not happen anymore.

In addition to the tension between the US and China, Sanchez mentioned as causes that the port activity has lost that dynamism the economic uncertainties that have arisen this year in the United Kingdom, in some countries of the Euro zone and in Japan.

"The new economies of networks in the shipping companies, which bring rationality to the market and make less movement of containers, and that merchandise occupy less space and therefore at the same volume of trade occupy fewer containers, are also factors that explain that loss of dynamism, "said Sanchez.

The consultant of the Panamanian company Talasonómica S.A. Rodolfo Sabonge told Efe that the port sector "does not grow at the speeds it believed before but that it needs to make the investments to be able to adapt to the requirements of the largest ship that is forming the shipping alliances in the region."

The alliances in the maritime transport industry were another of the points of debate of the day, illustrating a concentration of shipping companies that has led to a decrease in competition and to increase their bargaining power to impose their conditions and prices.

"The alliances have been made to reduce shipping costs through economies of scale, but not necessarily the cost that has been reduced has been transferred to the owner of the cargo," said Sabonge, moderator of the panel that addressed this issue.

Sabonge pointed to a third link in the chain, that of ports, which "are part of the supply chain of countries to make their trade competitive".

"Each link has its own interests and we have to find a way to reconcile them" so that the shipping companies do not determine all the negotiation, "something that" affects the competitiveness of foreign trade in many countries, "Sabonge commented.


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