APLA ’24: Logistics more challenging to plan with increasing external threats – panel

CARTAGENA, Colombia (ICIS)–Logistics are getting even more challenging, as climate change, armed conflicts and tariffs are making planning difficult, shipping experts said on a panel discussion at the Latin American Petrochemical and Chemical Association (APLA) Annual Meeting.

“External threats are happening in a more frequent manner. So it’s harder for companies to plan and organize logistics and do just-in-time (JIT),” said Natalia Gil Betancourt, economic research leader at the Port of Cartagena.

“Because of the armed conflict in the Red Sea, cargoes take 10-14 days longer and that has an impact and cost transferred to the end consumer,” she added.

Trade wars and tariffs, part of deglobalization, along with reshoring, will also generate higher costs for the consumer, she noted.

Meanwhile, the Panama Canal Authority, which has been hit by drought in late 2022 through 2024, will be under pressure to generate more revenue for the country, said Gabriel Mariscal, business manager – ship agency division at port agency services provider CB Fenton.

“Strong El Ninos now occur more often – not once in 20 years. Droughts are more frequent. With climate, you don’t know what’s going to happen,” said Mariscal.

Betancourt and Mariscal spoke on a panel at the APLA Annual Meeting.

Droughts took down Panama Canal transits from 36 per day, to just around 18 during the worst point, he noted.

The Panama Canal Authority is likely to consider new rules to raise profitability, including segmenting prices by type of vessel or even by emissions, he said.

Meanwhile, ports are strategic convergence points and should work with industries such as chemicals as strategic partners, said Betancourt.

“Anticipating things is very complicated. For example, COVID was a Black Swan event. Another issue is the rearranging of supply chains. Shipping agencies are also reorganizing networks and strategic pathways. All this will impact availability and cost,” said Betancourt.

The 44th APLA annual meeting takes place 18-21 November in Cartagena, Colombia.

Thumbnail image shows a container ship passing through the Panama Canal. Courtesy the Panama Canal Authority