Soaring shipping costs impact Latin American trade
Recently, the global container shipping market has continued to strengthen in terms of freight rates, with particularly significant price increases for routes in Latin America and the Caribbean (hereinafter referred to as "Latin America"), which has had a significant impact on its import and export trade. This shock once again highlights the long-standing shipping difficulties in Latin America and prompts many Latin American countries to accelerate their search for solutions.
The latest data shows that freight rates on Latin American routes are rising across the board. French shipping giant Daffy Shipping announced that starting from August 15th, the maximum 40 foot container freight rate on the route from the Indian subcontinent to the west coast of South America will reach $10750; German shipping company Hapag Lloyd has also imposed a comprehensive fee of $600 on the South American East Coast to West Coast route. According to the latest report from S&P Global Freight Rate Assessment, the freight rates for the North Asia to South America West Coast route have risen to the range of $5600 to $6000 per 40 foot container in the second week of August, while the freight rates for the North Asia to South America East Coast route have also increased.
The United Nations Conference on Trade and Development pointed out that the global shipping industry is still affected by multiple factors such as geopolitical conflicts, international route adjustments, rising operating costs, and fluctuations in transportation demand. Among them, the intensification of geopolitical conflicts in the Middle East is an important driving force: on the one hand, international oil prices once exceeded $100 per barrel, directly raising transportation costs; On the other hand, the global shipping network is highly interconnected, and the obstruction of key waterways and port congestion have led to a decrease in ship turnover efficiency and tight transport capacity, which has also transmitted to Latin American routes, further amplifying the upward pressure on freight rates on Latin American routes.
In this situation, the problem of weak local shipping power and lack of discourse power in freight rates in Latin America is even more prominent. Taking the key routes from South America to Europe as an example, international shipping giants such as Mediterranean Shipping, Maersk Line, and CMA CGM dominate, while local shipping companies in Latin America are small in scale and have weak capacity. When freight rates rise, there is a lack of alternative options, and local bargaining power is weak when cabin space is tight. This makes Latin America more vulnerable to external shocks such as rising oil prices and blocked shipping routes, often enduring greater freight rate increases and longer recovery periods.
Latin America is far away from major trading partners such as Asia and Europe, and is highly dependent on sea transportation. The impact of this round of freight rate increases is particularly evident. In terms of exports, the proportion of bulk commodity freight has significantly increased, weakening the price advantage. In terms of imports, industrial manufactured goods rely on imports, and high freight rates exacerbate the pressure of imported inflation in countries such as Brazil and Argentina. For example, Argentina's import price index in the second quarter of 2026 increased by 8.2% year-on-year. In addition, unstable shipping schedules and port congestion lead to delivery delays, affecting the normal operation of the industrial chain. More foreign exchange is used to pay for shipping costs, and the cost pressure on small and medium-sized import enterprises is particularly prominent.
The high shipping costs in Latin America are not a short-term fluctuation, but a structural problem that has long constrained trade competitiveness. From the perspective of geography and trade structure, Latin America has a high proportion of commodity exports, low unit value, and a significantly higher proportion of freight costs in landed prices. From the perspective of infrastructure and institutional environment, port facilities are outdated, deep-water berths and yard capacity are insufficient, ship waiting times far exceed the global average, and demurrage and congestion fees are high; At the same time, the railway and highway networks in many countries are not sound, the multimodal transport system is fragmented, and the efficiency and cost of inland cargo collection and distribution are low. The "Latin American Economic Outlook 2025" has warned that structural weaknesses in infrastructure and high transportation costs are constraining trade in the Latin American region, with logistics costs averaging 15% higher than in the European Union.
Faced with the current difficulties, many Latin American countries have launched short-term emergency measures. The Colombian Ministry of Transportation and Transportation Regulatory Agency have issued an emergency plan for the Buenaventula Port, requiring container yards to operate 24 hours a day and implement emergency evacuation of empty containers; The Port of San Sebastian in S ã o Paulo state, Brazil has introduced a truck reservation and centralized security check system to reduce congestion and improve logistics predictability.
However, in the long run, promoting interconnectivity within the region and building the "Two Ocean Corridor" remains a key strategic direction for South American countries. In recent years, the economic and trade center of Latin America has accelerated its shift towards Asia, but the traditional export channels in South America face the Atlantic Ocean. Countries along the Atlantic coast such as Brazil, Argentina, and Uruguay need to bypass the Panama Canal or Cape Horn to export to Asia, with longer transportation distances and greater impact from rising freight rates. In contrast, Pacific coastal countries such as Mexico, Peru, and Chile have obvious geographical advantages as they can directly connect to trans Pacific routes. Therefore, on the one hand, Latin American countries need to open up land routes connecting the Atlantic and Pacific oceans, allowing goods to be shipped directly from the Atlantic coast to Pacific ports via railways or highways, shortening the shipping distance and time to Asia; On the other hand, it is also necessary to enhance the capacity of Pacific coastal ports to fully unleash the logistics efficiency of the "Two Ocean Passage".
Currently, the construction of the "Two Ocean Corridor" in South America has entered an accelerated stage. In February of this year, Brazil officially launched the "South American Integration Corridor" plan, listing the "Two Ocean Corridor" as one of the five strategic corridors. Among them, the "Two Ocean Highway" jointly promoted by Brazil, Paraguay, Argentina, and Chile is very representative. The corridor is over 3000 kilometers long, starting from Santos Port in Brazil, passing through Paraguay, Argentina, and arriving at Pacific ports such as Iquique in Chile. It is expected that after completion, the transportation time for Brazilian export goods to Asia will be shortened by 17 days, and the transportation cost will be reduced by about 30% compared to existing bypass routes.
China is an important participant and contributor in the construction of connectivity in Latin America. In terms of land transportation, China is deeply involved in the planning and research of the "Two Ocean Railway"; In terms of ports, Peru's Qiankai Port has become a landmark project of the joint construction of the "the Belt and Road" in Latin America. From the "Two Ocean Highway" and "Two Ocean Railway" to Qiankai Port, China is cooperating in various aspects such as technology, funding, and operation to help Latin America break through the logistics bottleneck that has long constrained its development.
Looking ahead, as the "Two Ocean Corridor" gradually connects and the capacity of ports along the Pacific coast continues to improve, Latin America is expected to reduce its dependence on a single ocean route, shorten its logistics distance with the Asian market, and strive for more initiative in the global shipping landscape. This will not only help Latin American countries enhance their ability to resist external risks in the context of intensified geopolitical competition, but also provide more solid support for the development of Arab trade and the stability of global industrial and supply chains.