Peru’s Chancay Port Opens with Chinese Backing but Faces Hurdles in Boosting Brazil Trade

Inaugurated in November 2024 by Chinese leader Xi Jinping under the Belt and Road Initiative, the Chancay port complex—located 60 kilometers north of Lima, Peru—was initially welcomed with enthusiasm by segments of the Brazilian business community. It promised to shorten Pacific Ocean shipping routes to Asia by ten days compared to Atlantic routes via Brazilian ports. However, the initial excitement has since faded, as Chancay and other Pacific ports have had no real impact on Brazilian imports and exports (both commodities and industrial goods) due to high freight costs, customs bureaucracy, and especially the logistical challenges of crossing the Andes Mountains without sufficient road and rail infrastructure.

A $3.5 billion investment by China’s state-owned Cosco Shipping, Chancay spans 280 hectares and will eventually feature four berths for bulk, general, and roll-on/roll-off cargo, 11 container berths, and six kilometers of quay. It is the only port in South America able to handle fully loaded ultra-large container vessels (18,000 to 24,000 TEUs). A ship departing from Chancay can reach Shanghai in 20 to 30 days; from Santos, the same journey—via the Cape of Good Hope—can take up to 45 days, depending on weather conditions.

Even with China as Brazil’s main trading partner, the agricultural sector remains unimpressed. “No soy is being shipped through Chilean or Peruvian ports. Soy is a low-value commodity. A railway to Chancay would be necessary. Our nine-axle trucks carry up to 55 tons, but the Andes crossing allows only 27 tons per vehicle,” says Luiz Pedro Bier, president of Aprosoja-MT. “Customs is another bottleneck. We need integration to streamline border procedures with neighboring countries and Chile.”

In 2023, Brazil’s federal government launched the South American Integration Routes program to connect economies across the continent. The initiative designates five priority routes in partnership with other South American countries, with projected investments of $10 billion. Route 2 (Amazonas) and Route 3 (Rondon Quadrant) are most relevant to Pacific access from Brazil’s northern region. Route 2 includes dredging the Solimões River to the Peruvian border and upgrading the Tabatinga (AM) customs office at the Brazil-Peru-Colombia tri-border. Route 3 calls for roadwork on highways BR-264 and BR-317, linking Acre to Peru. “The aim is to enhance the Manaus Free Trade Zone’s trade with neighboring countries—not necessarily to funnel products directly to Chancay,” says João Villaverde, secretary of institutional coordination at Brazil’s Ministry of Planning and Budget. “Initially, these works will benefit the bioeconomy.”

Augusto Cesar Barreto Rocha, logistics director of the Amazonas Industry Center (Cieam), says the integration program is positive but insufficient for the needs of the Manaus Free Trade Zone. “Dredging the Solimões will help barge traffic, but both the Brazilian and Peruvian sides of the river are very winding. You’d still need to transship the cargo to reach Pacific ports, compromising cargo safety.” Rocha also questions Chancay’s competitive edge.

“Transshipments, warehousing, customs inspections, weather, and poor infrastructure offset any time saved on ocean transit.” He argues the ideal solution would be paving the BR-319 highway (Manaus-Porto Velho), which remains largely impassable over a 400-kilometer stretch.

“There have been efforts for years to find modal solutions for Pacific access, but freight rates make them unviable,” says Olivier Girard, CEO of infrastructure consultancy Macroinfra. Recently, two railway projects were floated to link Brazil and Peru. The first, a Transoceanic Railway connecting Açu Port (RJ) to Callao (Peru), would span nearly 17,000 kilometers but has never moved beyond the planning stage. “Both in Pucallpa (Peru) and Acre (Brazil), there are untouched environmental reserves,” Girard explains. Under the Bolsonaro administration, a different railway linking Santos to Ilo (Peru) via Bolivia was proposed. The Lula administration scrapped that plan and replaced it with the broader integration route program.

Source: Valor Econômico

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