Challenges and opportunities for Costa Rica from expanded Canal

The Panama Canal expansion is a fact of extraordinary importance to Costa Rica, according to Kenneth Waugh, CEO of APM Terminals Moin (Puerto Limon).

In a recent article on elfinancierocr.com Waugh said: “Indeed, Costa Rica is one of those nations that could benefit from the Panama Canal expansion, particularly the Caribbean region, where it currently moves more than 70% of maritime cargo.

Port of Moin.

Port of Moin.

“For this to happen, Costa Rica knew it was necessary to modernize the port infrastructure, adapting to new market conditions in order to ensure the provision of a quick, safe and efficient service, in accordance with international quality standards.

“In Limon, the new Moin Container Terminal (TCM) concessioned to the company APM Terminals, undoubtedly represents a huge step in that direction. The start of operations of the TCM in 2018 and its subsequent expansion will allow, for the first time in the history of Costa Rica, to handle Post-Panamax type ships of up to 8,500 (TEU) that cross the Panama Canal on different international routes, making the country a point of scale of world trade.

“This would avoid the need for Costa Rican cargo to be transshipped to access more distant markets, opening up opportunities for our products and trade.

“The attention of transoceanic ships of this size represents an increase in the maximum capacity of vessels arriving in the country today, which is only 2,500 TEUs.

“According to the Socio-Economic Impact Study (EISE) conducted by the international firm Qbis Consulting receiving much larger ships at the TCM will increase the shipping activity in the country, thus an increase of 23% would be generated in commerce.

The expanded canal.

The expanded canal.

“In addition, due to the development of modern port infrastructure, the TCM may serve container ships in less time. According to the same research, the new container terminal would reduce by 61% the waiting time and berthing of vessels, which in turn would increase the efficiency of the national port activity. This would make the country more attractive for shipping lines.

“The combination given by the Panama Canal expansion and construction of the TCM changes the current regional logistics. On the one hand, the Panama Canal will attract more services from the Asian continent and with final destination to the east coast of the United States, which could make scale in the TCM. On the other hand, the TCM will be able to receive most of these services that will come and go directly to and from the fastest growing economy in the world, Asia.

Cargo movement in the area“This combination of factors, coupled with the privileged geographical position of Costa Rica on the continent, makes us think that in the future, our country can host free zones of great importance to Central America, where goods are distributed to neighboring countries, thereby reducing logistics costs of transporting them a much longer distance.

“The eventual direct connectivity of Costa Rica with Asia also means that our most important agricultural export products (pineapples, bananas, etc.) will find a new market in Asia, with diminished transit times to the continent.

“In this way, the Panama Canal expansion and development of the New Mega Terminal of Moin represent an important growth opportunity for our region, if all players know and take advantage of their potential. Currently, countries such as Colombia, the United States and Chile, among others, have already started investments in their ports in order to receive container ships that transit the Panama Canal and thus take advantage of the investment made by that nation. Costa Rica, and the province of Limon, can not be left behind in this process of modernization that will impact, at a dizzying pace, maritime trade in the coming years,” Waugh pointed out.

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