Latin American ports are fretting over the drastic fall in container traffic on the transpacific routes to the West Coast and Central region of South America. Port authorities are reluctant to fire dock workers as they feel it could lead to major protests and push their cash-strapped countries deeper into a recessionary hole.

"Transpacific trade from Asia to the West Coast of South America has decreased by about 30 to 40 percent while on the return journey the fall is between 10 to 15 percent,'''' said a port executive in Chile.
The situation is not any better in neighbouring Peru. "The transpacific volume at the port of Callao dropped 23 percent in January compared with the same month last year,'''' said Carlos Vargas Loret de Mola of Neptunia, a leading Peruvian storage and logistics company.
The drop in transpacific trade to South America has also affected the Panama Canal, the waterway linking the Atlantic and Pacific oceans. Statistics from the canal authority show that in fiscal 2008 transhipment cargo throughput dropped 4.7 percent to 133,827 tonnes compared with the 2007 financial year when it moved 140,434 tonnes. The four percent drop in volumes at one of the most important stretches of water traffic in the world illustrates the scale of the problem compared with the bigger drops in throughput at other ports in the region.
"We expect the canal transit by vessels this year to be below that of 2008 given the present economic conditions, especially in the movement of containerships and vehicle carriers," said Silvia Marucci, an official at the port authority''s marketing research and analysis office.
"So far we have observed a slight decline in overall traffic from October to February compared with the same period last year,'''' he said.
The ports in South America do not know what measures to take to improve the situation. "There are not too many measures a port can take since we do not control the cargo. If the cargo isn''t there not even a wizard can boost throughput. We can improve services but that is part of our day-to-day activities," said one Chilean port manager.
With cargo volumes on the transpacific routes to Latin America falling drastically, lines are desperately taking various steps to weather the storm.
The second biggest container shipping line, CMA CGM, a major operator on the route, has launched a belt-tightening programme that includes vessel sharing, taking slots, slow steaming and pushing for rate restoration.
The freight rates on the route have plunged as cargo demand shrinks. "We have cut capacity on the Asia-West Coast South America route and have decided on a rate restoration programme from April 1 of US$300 per TEU from Asia and $200 per TEU for the return trip,'''' said a spokesman for the French line. "Rates have deteriorated to a level that is not acceptable and a restoration is needed to continue providing our customers with the same level of service.''''
CMA CGM admitted that some of its vessels from South America to Asia were still going full but said the rates had deteriorated. "Rates are down by nearly 20 to 30 percent,'''' said the line.
The carrier has decided not to renew or renegotiate vessel charter contracts until the cargo situation improves. Contracts for some 170 vessels charted by CMA CGM expire or are up for renewal this year.
CMA CGM is also reducing the speed of its vessels and deploying only high-performance ships on key routes. "This will help reduce costs by some 15 percent,'''' said the CMA CGM spokesman.
The carrier has re-routed some services such as the FAL 2 Eastbound from Europe to Asia and PEX2 Eastbound between the Caribbean and Asia that now go via the Cape of Good Hope to avoid charges for the Panama and Suez canals.
"Despite the addition of an extra vessel to maintain the weekly service, the savings provided by this re-routing are substantial, and this measure could well be extended to other services," said a spokesman for the French line.