The effects of multimodal logistics in Central America

Although it can be quite complex to plan, using multimodal logistics in Central America offers significant regional transportation advantages.

More study is needed

Central America needs more studies on the impact and contribution of multimodal transport in the countries of the isthmus. However, there is no doubt that this type of transportation is essential for logistics in Central America. Such transport allows the acceleration of trade flows and geographic diversification.

In addition, multimodal logistics in Central America is how to ship certain materials, supplies, or products quickly and efficiently. This is the case despite the region’s need for infrastructure improvements and policies that facilitate logistics.

The following positive aspects can be highlighted in considering the impact of multimodal logistics in Central America.  Multimodal transport:

• Generates an articulated network of logistics infrastructure.
• Generates highly productive regional value chains.
• Reduces costs and logistics times.
• Increases regional trade.
• Promotes regional integration, productivity, and competitiveness.
• Ensures an intelligent system for the mobility of goods and people that guarantees accessibility, comfort, reliability, and safety.
• Generates high-value-added jobs.

Multimodal logistics in Central America: the business impact

The effect of multimodal transport in Central America at the business level is highly favorable for logistics in the region in many regards. Among them are the areas of:

• Management: the different vehicles and means of transport are better managed.
• Transport times are reduced as it is possible to choose the fastest combination of transportation modes.
• Transportation costs: total shipping costs are reduced, as well as merchandise control costs. Likewise, it minimizes the carrier’s and customer’s coordination and communication costs.
• Loading and unloading times: these decrease because the goods are grouped in multimodal load units.
• Theft and Damage Rate: Insurance premiums are much lower, making exporters more competitive.
• Required documentation: it is simplified since the documentation is unified for all modes of transport.
• Control: Facilitates cargo tracking by requiring a single tracking interface.

However, multimodal logistics in Central America can also cause specific difficulties. These may include such things as the investment required for coordination and logistics or inspections at each checkpoint along shipping routes. Also, legal or operational limitations may arise due to local rules, laws, and regulations.

Logistics in Central America and economic integration

Multimodal transport eliminates obstacles to trade between the countries involved. This integration aims to create broader economic spaces in which the affected countries can take advantage of benefits such as increased productivity.

This is how the economic integration of the Central American countries builds great axes of regional development in the transport sectors.

The search for enhanced competitiveness for production entails a sufficient complementarity between different modes of transport, configuring a multimodal network throughout the region.

In turn, this contributes to sustainable development and to an improvement in the competitiveness of the region’s production.

Ferry project between El Salvador and Costa Rica

A current pillar project for logistics in Central America is initiating a ferry service between Costa Rica and El Salvador. This alternative consists of starting with the maritime cargo transportation service between the ports of Caldera in Costa Rica and La Unión on the Pacific coast of El Salvador. The distance between both points is 345 nautical miles.

The project seeks to provide more alternatives to logistics in Central America. Thus, companies will be more competitive and will create new marketing chains.

In addition, it will positively impact other factors. These include the following:

• Reduction of environmental degradation.
• Reduction in carbon emissions and road traffic agglomerations.
• Improvement of the physical and mental health of drivers and increased rest times on the ferry.
• Reduction of traffic accidents on highways.
• Creation of new sources of employment between Costa Rica and El Salvador.