A Long Road to Travel in Central America

¿Why is more expensive transport tomatoes from San josé,Costa Rica, to Managua(430 km) than to San Jose, California(5400km), that is 10 times further?

Bring tomatoes from Costa Rica to his close neighbor Nicaragua should be as easy as bringing fruit from Spain to France, but the possibility is not the fact. For big tomatoes companies, transportation costs  can represent more than 30% of the selling  price, even 50% for small producers.

The main factor  is the bad secundary roads quality, added the costs of crossing the costums house and the losses of wasting lot of time  due to the waiting time on the roads, that sum a 10% from the final price of the tomatoes.

While bottlenecks have an impact on costs in all segments of the supply chain, border procedures and the quality of roads on this area have great impact on competitiveness in Central America, particularly small producers, “said Felipe Jaramillo,  Central director of the World Bank.

These impairments are the main barriers to trade among the Central American countries and other markets around the world, and affect badly to Central America  competitiviness.

Logistics bottlenecks can increase the additional time of  bringing a product from the protection center to the nearest port on the Atlantic coast a 21% in Panamá and 60% in Nicaragua and El Salvador.

Bridges in disrepair and congestion on roads can affect the ability of land transport connection among  the Carriage, which affects negatively for international trade( export).

Cheap ways of solving this problem would be a greater joint efforts between governments. As we have seen logistics is a very important item for  competitiveness around the world, so solving logistics problems  would make possible for all people and companies approach  among each others.

By: Mateu Caldentey Fuallana, Jordi Pla Gené and Xavier Bruch Boix

Source: The World Bank

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