What are the key risks currently facing global logistics and petrochemical industries?

Globally, we are experiencing what I describe as a “meteor shower” of risks. For instance, Covid-19 was a major disruption, but it was a single event. Today, we face multiple shocks simultaneously: fluctuating freight rates, unpredictable tariffs, the unexpected closure or reduced capacity of strategic routes like the Suez Canal and Panama Canal, ongoing armed conflicts, and above all, the strategic rivalry between China and the US. This rivalry is the most significant disruption, of which tariffs are merely one manifestation. What challenges might the logistics industry face in adapting to these risks?

Logistics always follows trade. When trade becomes volatile, logistics adapts, but always with a delay. Prices rise, performance suffers. Some responses can be operational, such as reallocating fleet capacity. However, other constraints, such as limited road, trains or port capacity, are structural and cannot be easily resolved. What barriers would you highlight for Latin American and Caribbean logistics in particular?

Regionally, Latin America and the Caribbean face severe structural delays in infrastructure development. For example, out of nearly 600 ports in the region, only five have any level of automation. Among the top 40 container ports in Latin America and the Caribbean, very few match the level of digitalization seen in developed economies. Many ports in the Caribbean suffer from lack of modern facilities. There is a persistent lack of investment and an absence of conditions to attract private capital. While many governments talk about facilitating investment, actual progress is minimal. Is current investment in Latin America sufficient to close the region’s infrastructure gaps?

Overall, investment in infrastructure remains below 2% of GDP annually, and is even declining. This level is insufficient to address a common deficit that spans the entire region. While countries like Peru, Chile and Paraguay show a slightly better performance, most of Latin America remains significantly behind. Infrastructure development requires large-scale solutions, which are currently lacking. Where might future investment in Latin American infrastructure originate?

China will likely continue as a major source of investment, but engaging with China also means becoming involved in broader geopolitical tensions. Most countries today pursue multi-alignment strategies rather than aligning exclusively with a single power. This makes the situation complex and delicate.

Brazil is actively engaged in the China-CELAC agreement and is open to Chinese investment, although it still struggles to address fundamental issues that would enable such investments. Colombia has joined this effort, but political changes may alter this path.

Peru stands out as the most dynamic case. The port of Chancay is a prominent example of proactive infrastructure development, and it receives investment from a wide range of international sources. Uruguay, on the other hand, has adopted monopolistic policies at the Port of Montevideo, which have driven up tariffs. In Argentina, despite stated intentions, no substantial progress has yet been made on port infrastructure, river transport, railways, or highways. How should the region address climate change in its logistics systems?

Climate change represents a structural challenge. In Panama, for instance, water level changes in the Canal have had major effects. Similarly, water shortages in the Paraguay and Paraná Rivers have disrupted shipping in Paraguay, Bolivia and Argentina. Addressing these impacts requires substantial investment and strategic transformation.

Logistics in Latin America relies on outdated energy systems, with 90% of transport using fossil fuels. Transitioning to a more sustainable energy matrix demands investment, which is currently not being facilitated. In some cases, political leadership denies the reality of climate change, which severely hinders progress. How do APLA’s conferences help these industries to face the risks we have discussed?

This meeting is extremely important, offering a valuable opportunity to engage with representatives from the petrochemical sector who are closely linked to logistics operations. It is held annually and offers an open platform where all relevant topics can be discussed. Discussions have covered macroeconomic, geopolitical, and logistical issues and will continue to address emerging challenges. For the petrochemical industry, addressing challenges such as climate change and delays of infrastructure progress within this forum is both necessary and productive. It serves as a transmission belt, facilitating dialogue and understanding across sectors.