The Port of Acajutla is on the Pacific Ocean and is El Salvador’s main commodities and container shipping point. Miguel Flores, CEO of Logistica Internacional talks to the Central American Group.
The Central American Group: Hello and welcome to another installment in the Central American Group’s series of podcasts. In these discussions, we talk with individuals that are expert in issues that have to do with regional economics in Central America. We also discuss commerce and trade. Today we are speaking with Miguel Flores. He is the CEO of that is based in San Salvador, El Salvador called Logistica Internacional or Loginter, and today our discussion will be on the subject of the commercial Port of Acajutla.
How are you doing today, Miguel?
Miguel Flores: Hello. How are you? I hope that we can provide and exchange some good information on this podcast.
The Central American Group: I’m sure that we can. Today the discussion is on the subject of the Port of Acajutla, which is located in El Salvador. Can you tell us a little bit about where that is in terms of the geography of your country?
Miguel Flores: Yes. Acajutla is our main port. It is located in the state of Sonsonate, which is in the northeast part of El Salvador. As a reference, the Port of Acajutla is close to Guatemala.
The Central American Group: When did the operations at the Port of Acajutla begin?
Miguel Flores: The Port of Acajutla is operated by a governmental entity called CEPA, which stands for Comision Ejecutiva Portuaria Autonoma. This organization was founded in the 1950s and has been operating the Port of Acajutla, as well as the airport and the Port of La Union. La Union is another port which was built on the Gulf of Fonseca very close to Honduras. CEPA manages the logistics corridors for our country.
The Central American Group: What type of vessels does the Port of Acajutla accommodate?
Miguel Flores: We receive several types that include container vessels, bulk carriers, tankers, car carriers and other specialized vessels that take care of heavy lift or overweight cargo. The port is very well prepared to receive basically all types of vessels. This includes cruise ships, as well.
The Central American Group: I would imagine that these are full of people that are visiting El Salvador for its surfing?
Miguel Flores: Yes, exactly, surfing and getting good coffee and a good tan and enjoying sunshine every day.
The Central American Group: What kind of products are shipped in and out of the Port of Acajutla?
Miguel Flores: The commodities that we import are in the bulk carriers. This includes wheat, soybean meal, and corn and those types of commodities. Bulk carriers are also used for export. We have considerable exports of bulk sugar that is shipped to countries such as the United States, Russia, and other parts of the world. With regard to containers, almost every shipping line is present at the Port of Acajutla. Among them are Maersk, ONE, MSC, Costco, CMI CGM, and APL. Those are a few of the companies that come to mind. Almost every shipping line calls at the Port of Acajutla.
In terms of tanker vessels, this is a very interesting point. Besides going to CEPA’s pier, there are three additional marine terminals that can accommodate tanker ships. These bring diesel, gasoline, and jet fuel to our country. This will give you a general idea of the capacity of the Port of Acajutla.
The Central American Group: What kind of volume of cargo comes into the Port of Acajutla?
Miguel Flores: As a reference, I will give you some big numbers that are easy to remember and are easy to describe. For example, in terms of metric tons, we have total imports weighing 3.8 million tons in 2018. As far as exports are concerned, we shipped a total of 1.2 metric tons. This signifies an increase of 5% when compared to 2017 numbers. In terms of TEUs, which means “twenty feet equivalent units and is a measure to describe shipping containers, we had a total import number of 118,000 TEUs. We also had 111,000 TEUs of exports. In this case, we had a 10% increase in the volume of TEUs over 2018.
The Central American Group: Do you see that going into the future that the volumes of these shipments will increase?
Miguel Flores: Yes. Volumes of shipments at the Port of Acajutla are increasing. The administrators of the port are doing what has to be done in terms of equipment and infrastructure improvements to accommodate more cargo. We think that El Salvador has to up its capacity because volumes will increase over the next two to three years due to new investment.
The Central American Group: What kind of equipment has been invested in order to handle the increased cargo that you are referring to?
Miguel Flores: In terms of bulk cargo, the Port of Acajutla has been equipped with new clam shells from 15 cubic yards or 18 yards. In terms of container handling, there are new straddle carriers that have been purchased recently. This represented an investment at the Port of Acajutla of almost three million USD. Also, the roads that lead into and out of the piers have been maintained very well to facilitate the transportation of containers or the cargo that has been handled by the port.
The Central American Group: Is there a defined plan for investments at the Port of Acajutla for 2019?
Miguel Flores: Yes, there is. As far as I know, the Board of Directors of CEPA has approved the purchase of some gantry cranes. I believe that the purchase has already been made. These cranes will allow us to increase the rate of discharge of the loading of containers in our port. This is something that is very strategic and that represents forward thinking by the Board of Directors. To invest in this way will enable the shipping lines to call on the Port of Acajutla more often.
The Central American Group: Can you tell us about the liquid natural gas plant that has recently been installed at the Port of Acajutla?
Miguel Flores: Yes. This project represents an investment of approximately one billion USD. It was executed by a local company that partnered with a company from the US. This is a project that has been on the table already for three or four years. However, of course, there is a lot of documentation and authorizations that had to be presented to the government before getting its approval. This is going to be a facility in which one storage vessel will receive several ships. The gas will be liquified and will generate three hundred and fifty megawatts.
They are already moving soil for the construction of the plant. By the end of the year, the cargo, the pipelines, and the construction will start coming to the Port of Acajutla. I think that this is one of the biggest investments that local and foreign companies will be doing in El Salvador for this year and next.
The Central American Group: Does the Port of La Union in the Gulf of Fonseca compete with the Port of Acajutla?
Miguel Flores: I think that it will generate some competition. This is good in terms of creating more efficiency. I also think, however, that the Port of Acajutla has already defined a very good strategy for keeping its current customers. Personally, I think that the Port of La Union will be a very good facility from which to conduct transshipment operations from big ships to smaller ships. It will also be a good place from which to distribute to other Central American and South American ports. I hope that the concession of the Port of La Union will come soon because it will help the economy of that part of the country. La Union will compete with the Port of Acajutla, but, in the end, they each will have different types of customers with different types of operations.
The Central American Group: Since you are an expert on issues of freight coming in and out of the Port of Acajutla, can you tell the listeners a little bit about your company Loginter? What kind of services can you provide for companies that are seeking to do business in the Central American region?
Miguel Flores: There are two main investors in Loginter. One is called Grupo Guerrero. They are developers and they own free zones in El Salvador and Costa Rica. The other investor is Grupo Maritimo, which is involved in shipping line representation, vessel attendance, trucking, freight forwarding, and other similar activities. Both groups joined forces to create Loginter, which runs a regional distribution center for companies that want to do business in the region. Companies that do business with Loginter do not need a legal entity to bring their commodities to our country. We store and distribute their merchandise throughout the region. In the next two or three months, we are going to be able to operate as Loginter Costa Rica. Services offered in Costa Rica will be the same as those that we offer in El Salvador in terms of warehousing, distribution, and value-added services.
Central American Group: After hearing this information, I’m sure that our listeners have questions that they would probably like to ask you. Is there some way that they can get in contact with you in order to ask whatever is on their mind?
Miguel Flores: Yes, of course. I invite everybody to visit our webpage, www.thecentralamericangroup.com. There you can fill out our contact form, or you can explore the site to learn what our service offerings are in this part of the world.
Central American Group: Thank you very much for the information that you have provided. It’s been interesting and useful. We hope to have the opportunity to talk to you about more things in the future.
Miguel Flores: Of course, we are always here to serve you. Have a great day.
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