Tuesday, 20 October 2020

Costa Rica – El Salvador Ferry To Be Reactivated To Avoid Impact On Trade Due To Nicaragua Crisis

The more than two-month-old protests in Nicaragua have had a strong impact on the region’s trade that moves 90% by land. Many carriers are still trapped in Nicaragua without being able to reach their destinations, which is why the Costa government Rica accelerated the reactivation of the ferry with El Salvador.

Thousands of trucks from Central America are trapped in Nicaragua blockades set up on Nicaragua’s highways.

The crisis in Nicaragua that began on April 18 has meant losses for commerce in the region, according to the business sector and transporters that have been requesting the intervention of the governments to find “urgent solutions” before they feel the direct effects of the cut in the transport of merchandise in the other Central American countries.

On the part of the Costa Rican government, the Minister of Public Works and Transport (MOPT), Rodolfo Méndez, assured that the actions to reactivate the ferry to El Salvador are being carried out.

- paying the bills -

In this sense, the director of the Costa Rican Instituto Costarricense de Puertos del Pacífico (Incop), Juan Ramón Rivera, said that the launch of the ferry is a matter of days.

Puerto de Caldera (Caldera Pot) on Costa Rica’s Pacific coast.

The Cámara Costarricense de Navieras (Costa Rican Chamber of Shipping) has reported that the effects of the crisis in Nicaragua include both the exit and entry of raw material products.

In El Salvador, Carlos López Burrundia, representative of Naviera del Odiel, a company founded in 1956 and is headquartered in Madrid, Spain, said the ferry La Paz Star, an alternative route to the Interamerican highway between El Salvador and Costa Rica, will begin operations by the end of this week.

“This type of operation generates a significant reduction in transportation costs for exporting and importing companies in the Mesoamerican region,” the shipping executive told Elsalvador.com.

- paying the bills -

The ferry La Paz Star, at 150 meters long has a capacity of up to 85 rigs (tractor motors and trailers) or 400 light vehicles.  It can also carry up to 400 people.

“For the moment it will start only with merchandise transport,” said López.

Lopez said that 12 Salvadoran companies have already confirmed their participation, and in Costa Rica, there are 9 confirmed companies.

“The goal at the end of the year is to make a daily trip to Costa Rica, on both routes, using 2 vessels and also to start daily trips to Puerto Corinto in Nicaragua,” added Lopez.

The fare will include costs of wharfage, food and lodging for the driver; and insurance for the truck and its cargo, which will reduce insurance costs for the ferry company.

Rates will range from US$300 to US$800, depending on the size of the cargo.

- paying the bills --

“For the transporters, the Ferry will be an advantage because it will significantly reduce their depreciation costs, and may double their trips per week; because on the ferry, they will be back in 3 days in their country of origin. So it can not be seen as a competition to land transport but a strategic partner,” said Lopez.

In 2015, a new cargo ferry between Costa Rica’s Puerto Caldera and El Salvador’s Puerto La Union was announced by then vice-minister of Transport Sebastián Urbina. By July 2016, the ferry remained anchored in red tape.

In July 2017, the Spanish company to operate the ferry decided to pull the plug on the project after it could not reach an agreement with the Autoridad Portuaria del Puerto Caldera, the private Pacific port company, mainly due to failure to obtain rate approval from the Autoridad Reguladora de los Servicios Públicos (Aresep) on loading and unloading of cargo.

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