News

Truck restriction seen hampering operations at Peru's Callao port

Bnamericas Published: Tuesday, August 23, 2022

The provincial municipality of Callao, where the busiest port in Peru is located, approved a regulation that puts a time limit on the movement of cargo transport. 

The new regulation, which has come into force after a trial run in July and early August, limits the hours during which large trucks can come in and out of the port to eight (10pm-6am). 

Labor unions have spoken out against the measure, pointing out that it is aimed at raising money and does not address the underlying problem – decentralizing the logistics chain concentrated in Callao in order to take advantage of other ports.

The measure could also impact the consumer price index, as many manufacturing inputs come through the Callao port. Annual inflation stood at 8.74% in July, but prices rose nearly 12% in the food and beverage category, according to the central bank.

THE IMPACT

Trade company ComexPerú says the regulation will cause containers to pile up. “By putting time slots you can miss the boat or simply not wait. The supply chain, delivery times and orders are broken,” Xavier Montes, trade facilitation manager at ComexPerú, tells BNamericas.

According to Montes, around 3,800 trucks come in and out of Callao daily. "For every day a ship is delayed, daily losses amount to US$200,000 for a company that markets corn and oil," he adds.

Currently, container trucks wait between 12 and 14 hours to enter the port.

LEGALITY

Although the measure has been approved, Montes questions its legality.

"There is a report from the Ministry of Transportation that has studied the case and concluded that the municipality of Callao has transgressed its powers. There has already been a meeting of councilors and they are evaluating repealing the norm," he said.

The Exporters Association (ADEX) has also spoken out against the measure and sent a letter to the provincial mayor of Callao requesting that he review it.

INFRASTRUCTURE PLAN

Port companies and unions are awaiting the update of the National Infrastructure Plan for Competitiveness (PNIC) to see which projects will be a priority in the coming months. The PNIC has made slow progress – 20% execution in three years – and among the projects that have not yet started is the Callao complementary port works project.

With an initial budget of US$12 million, the project would provide a yard where trucks can wait for containers. The contractor has not yet been selected. “It is a very large piece of land that the Peruvian navy is giving up so that the trucks can wait. The current chaos, together with the new limitations, can be solved with this project,” says Montes.

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