A panorama full of challenges, but also with important opportunities is what is seen Dinesh Sharma, Director, Drewry Maritime Advisors, for the port industry in Latin America. In an exclusive conversation with Maritime World, the analyst He reviewed the current conditions of the sector and its projections, emphasizing the most immediate and important challenge: the expansion of port capacity, which will be the result of a new wave of concessions.

"I think that growth [in container transport] is the biggest challenge that the region will have to address. Many of the concessions are coming to an end in Latin America and the market today is very different from the concessions that were signed 30 years ago."He warned.

In the past, he stated, “The idea was to transfer public sector terminals to the private sector to boost efficiency, productivity and investment. Today, the market and needs are very different, so any new concessions that come in must ensure that they address and incorporate them.".

However, he maintained that this “It is an opportunity for Latin America to review concession agreements in the coming years to boost efficiency, productivity and investment gains for the benefit of the region.".

Investments in progress 

The analyst highlighted the investments made and others in progress in the region in terms of infrastructure.DP World outlined [in the recent TOC Americas] its plans and ambitions to build much more capacity and invest in the region".

But he stressed that the key to these investments is to increase productivity and efficiency. In this regard, he recalled the case of Valparaíso in Chile.It's a fantastic port. It has a very small yard and transfers containers from there to an off-dock depot and still handles almost a million TEUs. I think this is the level of productivity and efficiency that shipping companies would like to see in the region. We are in a business where the flow of containers must be optimal and efficient."I affirm.

"Ships do not want to wait, they do not want congestion. All this costs money to shippers, to the exporter.

It is very important for a region like Latin America, which depends predominantly on the export of commodities, to have efficient, productive supply chains and for containers to be able to move quickly."he added, not forgetting to mention that technologies also have a role to play in all this.

Port performance projections

Dinesh Sharma projected that container throughput on the west coast of Latin America is expected to decline slightly.This is because the area has had very strong growth in 2023. In 2024, we expect it to have a similar performance as in 2023.”. Meanwhile, “On the East Coast, we believe strong growth will continue. This is because in 2022 and 2023, we did not see strong traction from the East Coast which is still catching up to get to where it needs to be.”. In short, he noted that this reflects the historical trend of a market divided into two halves and that, in the immediate future, “There will be slow growth on the West Coast for the remainder of 2024, and strong growth on the East Coast for the remainder of 2024".

External factors

The analyst, however, did not forget that the performance of Latin American ports also depends on the difficult conditions that occur globally, with geopolitics being the main risk factor. He explained that this area has two components, the first being the conflicts currently underway in Ukraine and the Middle East, and the second, “It is the increasingly frequent use of trade as a geopolitical tool in order to obtain competitive advantages."which, he said, could lead to even more disruption.

On the other hand, he mentioned that economists have pointed out that in the coming years inflation should begin to decline and they expect it to return to normal by the end of 2025 and finally added that “There will be a lot of shipping capacity coming into the market that will need to be managed, and we believe that shipping companies will do this very effectively. But there is a lot of latent capacity that is being absorbed by disruptions, but there will be an oversupply in the market by 2026.".