The Port of Chancay: Economic Impact of a Strategic Infrastructure for Peru and the Region
Port infrastructure is a fundamental pillar for foreign trade and economic growth in any country. Peru, a middle-income developing country, has a lot of potential in part thanks to its 2,400 km long coastline located in the center of the South American Pacific.Currently, the Andean country has the opportunity to have a world-class port that will allow it to more efficiently meet the growing demand for Peruvian exports by Asian countries and can also be used by neighboring countries. However, there are challenges ahead, such as the country's huge deficit of basic infrastructure, the underdevelopment of the project's area of influence and the lack of adequate connectivity with Brazil.
How does the port fare at startup?
The port, located in the province of Huaral, 75 km north of Lima, was inaugurated on November 14, 2024 and plans to move up to 300,000 TEUs in its first year of operations. (the equivalent of a twenty-foot-long container). Chancay is one of the ports on the continent that has the capacity to receive Megamax ships of up to 18,000 TEUs thanks to the fact that it has a draft of 17.8 meters.
The port has achieved a reduction in travel time from Peru to Shanghai (China) from 42 days to only 23 days, allowing a significant reduction in logistics costs to Asia by 20%. Attracting national and foreign investment as well as the interest of neighboring countries seeking to export to Asia through Chancay.
The port of Chancay, developed by the Chinese company COSCO Shipping Ports in partnership with the Peruvian mining company Volcan, has an investment of more than US$ 1,300 million dollars in phase 1 and is emerging as an economic catalyst of South American scope that could position Peru as a hub for transpacific trade. Countries such as Chile, Ecuador, Colombia and Brazil have already shown interest in using the Peruvian port to reach Asian markets.
How is Chancay positioned in the American Pacific basin?
Chancay is one of the Pacific ports on the American continent with the capacity to receive ULCS (Ultra Large Container Ships), that is, vessels with more than 14,000 TEUs and up to 24,000 TEUs, which require world-class port infrastructure. Ports with the capacity to receive ULCS vessels must be at least 16 meters deep, docks more than 400 meters long, cranes with a reach of between 22 and 24 containers wide, as well as extensive logistics capacity and automation.
What impact will the new port of Chancay have on Peru?
The impact on the economy is evident: it is estimated that it will contribute US$ 4,500 million dollars to Peruvian GDP per year. Exports and imports are expected to increase significantly, especially of minerals, agro-export products and manufactures. The demand for technical employment will increase, which will increase the demand for this type of training. Currently, the port has generated 7,000 direct and indirect jobs, in addition to promoting the development of related services such as land transport, financial services, among others.
The port of Chancay is a great opportunity for the economic development of the country. From now on, we can see its impact on improving logistics competitiveness, attracting investment and generating employment.
What challenges does Peru have ahead?
Not everything is resolved because in the town of Chancay, the development of the port is putting upward pressure on land prices. The increase in population makes it essential to invest in water, sanitation, public transport among other basic services and the state has not yet been able to manage this growing demand for public services due to the greater flow of population to the district of Chancay. It is also necessary to approve the urban development plan of the district and the province to facilitate the arrival of private investments. It is also essential to make improvements in the port's land connectivity with the capital, the provinces and the border with Brazil.
What actions should be implemented?
To solve the aforementioned deficiencies, it is necessary to have territorial planning with a long-term vision, transparent and inclusive governance, citizen participation, prioritize the development of the surrounding communities and have responsible environmental management.
It is necessary to recognize the strategic nature of the port of Chancay as one of the great ports of the American Pacific. As well as taking advantage of the enormous opportunity that the port means for the country due to the expected increase in trade between Peru and Asian countries.