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Market News

The State of Ocean Transit: Latin America

December 4th, 2023

  • Brazil leads Latin American countries in TEU capacity, peaking at 6.9 million in August, followed by Panama due to its strategic location.
  • Import and export dwell times exhibit volatility, with a notable spike in Panama, impacting operations due to canal-related disruptions.
  • Transit times for containers from China to Latin America show an increase, while those from the US demonstrate a consistent decrease.

Ocean Transportation in Latin America

Latin America plays a crucial role in global supply chains, serving as a primary supplier of agricultural goods such as coffee, soybeans, cocoa, avocados, beef, and more. Additionally, the region is witnessing growth in manufacturing, particularly in automotive, electronics, and energy production. The Panama Canal, located in Latin America, plays a pivotal role, facilitating 40% of annual US imports and serving as a critical component in supply chains across various industries.

Comparisons by Country

TEU Capacity

Vessels that travel throughout Latin American ports have the capacity of millions of TEUs on a monthly basis. The chart below breaks down the TEU capacity by country.

Brazil has the highest capacity out of Latin America, seeing a peak of 6.9 million TEUs in August, which is the peak month for shipping. Panama is the next largest given its strategic location as the home of the Panama Canal. Notably, there is a general drop in capacity across the region in November, signaling the end of the peak ocean transport season from August to October, aligned with holiday season preparations.

Import Dwell

Import dwell, measuring the time between when a container arrives to its port of discharge to when it is gated out, varies across Latin American countries.

Of particular interest is the significant spike in import dwell in Panama, attributed to drought-induced reduced canal capacity. This bottleneck is impacting imports, resulting in a 75% increase in dwell time from October to November. Such delays can lead to inventory challenges, stock shortages, and operational difficulties. For further information regarding the Panama Canal, please refer to latest update here.

As of November 1st, Panama has limited daily canal passage for vessels to 25, indicating anticipated further delays and disruptions.

Export Dwell

Export dwell, measuring the time from container arrival to vessel departure, also exhibits volatility in Latin America.

Mexico has consistently had higher export dwell times when compared to other Latin American countries. This is surprising to see when there is a general trend for US and Canadian retailers to shift manufacturing to Mexico, but it is important to note that this market makes up 80% of Mexico’s exports, but predominately travels via rail and truck.

Port Level Comparisons

The below sections take a closer look at individual ports and performance for each country. These are taken at a weekly level to show short term changes.

Brazil

Colombia

Panama

Chile

Mexico

Transit Times for Imports and Exports

Transit time measures the length of time between a container gating in at its port of loading to when it is gated out at its port of discharge.

Overall, transit times for containers entering Latin America remain steady, with a noticeable increase in times for shipments from China. Factors contributing to this include heightened peak season volumes and the use of the Panama Canal for certain Latin American countries.

Conversely, there is a consistent decrease in transit times from the United States over the past four months.

Export transit times to China have also increased, mirroring import lead times. Stable transit times are observed for the Netherlands, Spain, and the US, with Canada showing slight improvement in November compared to previous months.

About project44

project44 is on a mission to make supply chains work. As the supply chain connective tissue, project44 operates the world’s most trusted end-to-end visibility platform that tracks more than 1 billion shipments annually for over 1,200 of the leading brands, including top companies in manufacturing, automotive, retail, life sciences, food & beverage, and oil, chemical & gas. Using project44, shippers and carriers across the globe drive greater predictability, resiliency and sustainability. To learn more, visit www.project44.com.

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Disclaimer: The information conveyed herein, shared solely for summary and not contractual purposes, comes from both project44 and third-party reporting. The project44 data does not include all available market information, and project44 has not undertaken to independently verify the third-party reporting. Similarly, this type of data changes from day-to-day. Accordingly, the reader should not rely on this reporting to make any business decisions, and project44 expressly disavows any liability arising from any such reliance.

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