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The 27th annual APLA Logistics Meeting convened in Panama City on 20-21 May 2025, bringing together leaders and representatives from across Latin America’s petrochemical and chemical industries and the region’s logistics sector. Panama is one of the world’s unquestionable logistical centers – around 5% of global trade passes through the Panama Canal each year, including as much as 40% of US container traffic.

During technical visits to the Canal’s Miraflores and Manzanillo locks, attendees glimpsed how this awesome feat of engineering enables the daily transit of up to 38 goods-laden vessels from one ocean to another. Saving each ship thousands of kilometers and several weeks of travel compared to routing via the Americas’ southern tip at Cape Horn, the Canal is a vital thoroughfare enabling the smooth flow of today’s globalized supply chains.

Still, the irony was not lost on attendees that the Panama Canal has itself been subject to recent and escalating interventions by US President Donald Trump. As he began his second term, President Trump insisted that China is operating the Panama Canal – an assertion Panamanian president José Raúl Molino called “nonsense.” Twenty-five years earlier, on 31 December 1999, the US handed complete control of the Canal to the Panama Canal Authority, a Panamanian government agency, on condition of “permanent neutrality.”

Further developments in the first months of 2025 have included an agreement to station US troops along the Canal’s length, and a fraught dealmaking process which would see US investment firm BlackRock take a controlling stake in two Panamanian ports situated close to the Canal, currently owned by Hong Kong-based port investor CK Hutchison. The deal has been praised by President Trump, and subjected to scrutiny by China’s market regulator.

Panama City, then, was a relevant host for a conference whose discussions addressed simultaneous, multi-frontal challenges facing the logistics industry – across geopolitics, insecurity, climate change, economics, technology and more. In his presentation to the conference, Ricardo Sánchez, Co-Director at the Universidad de los Andes School of Management’s Kühne Professorial Chair in Logistics, and Head of the Caribbean Research Institute, described the contemporary scenario as a “meteor shower” for the logistics industry – a powerful visual metaphor indicating both the sheer number and potential impact of these various challenges.

Opening the meeting, international economist and consultant Eddie Tapiero presented an image of a changing world, in which Latin America’s logistics industry must adapt quickly to a new and volatile worldwide narrative. At its center – and central to many of the meeting’s conversations – was a reconfiguring of global trade wrought in large part by the US’ return to protectionism under President Donald Trump. Following years of growing discontent with globalization and its effects, Tapiero argued, global powers are seeking greater resilience, self-sufficiency and national security. To do so, they are exerting their influence to shift toward regionalized trade and political relationships.

In the US case, the Trump administration has employed tariffs in an attempt to strengthen its on-shore manufacturing capacity and control its trade balance. Though those tariffs have fluctuated unsustainably in the short-term, Tapiero put forward that they represent part of a “paradigm shift,” ushering in a new status quo for the coming decades, under which geopolitics and ideology will hold more weight than economics and efficiency in global trading relationships.

For the logistics industry in particular, Tapiero issued something of a warning of this shift’s potential effects: “Those who have invested in ports, cranes, ships, warehouses and other cargo transport infrastructure will still need to pay their bills. If there is reduced demand for international shipping, we will see financial pressures,” he said.

Meanwhile, the Trump administration’s tariff regime has proven to be highly unpredictable. The countries and products affected, and tariff rates applied to them, have changed on a weekly, sometimes even daily basis, including various delays, U-turns and special conditions. The latest development at the time of writing – a US-China deal on trade in rare earth elements, announced on 11 June 2025 – followed a prior breakdown in negotiations between the two countries, and a sharp drop off in Chinese exports to the US. Perhaps the most lasting effect from the first half of 2025 – still with no clear end in sight – has been an unshakeable sense of business uncertainty. Adapting to uncertain times

Peru’s maritime infrastructure development was one of the standout stories in Latin America in 2024, thanks to the opening of the port of Chancay. Juan Carlos Paz Cárdenas, president of Peru’s Port Authority, told the conference about how the new mega-port fits into the country’s trade development strategy: “A liberalization phase in underway in Peru, supporting our growth as a major exporting country with a very open economy. That implies having strong and liberalized maritime port infrastructure.”

Chancay is something of a physical representation of Peru’s success in navigating the delicate geopolitical dynamics discussed here; the port is a joint venture between the Peruvian Volcán mining company and Chinese state-owned shipping firm COSCO – Chinese premier Xi Jinping spoke at its inauguration, calling Chancay the start of a “21st-century maritime Silk Road.”

Despite all that, Peru maintains a free trade agreement with the US (notwithstanding the 10% baseline tariff applied by the Trump administration to all countries in April 2025), and has, at least at the time of writing in June 2025, avoided any further discretionary tariffs. Paz Cárdenas further explained that Chancay is envisioned as a hub for Peruvian exports, collating goods from the country’s smaller ports for forwarding to Asia in just 23 days, as well as to the US and Europe.

Guilherme Baida, S&P Global’s Latin America chemicals editor, zoomed in on possible economic impacts of trade tensions. First, he observed that a constriction of US-China commerce could result in lower chemical commodity prices in Latin America: “There is a surplus volume from China that can no longer be exported to the US, and the same from the US to China. A new destination must be found, which could be Latin America. Considering basic dynamics of supply and demand, that would apply downward force on prices in the region in 2025, increasing competitive pressure on local producers.”

Meanwhile, however, Baida highlighted that new levies for docking in the US imposed upon Chinese-made ships – which represent the vast majority of most fleets at sea today – will drive up logistical costs and, ultimately, likely be passed on to consumers.

Jonathan López, Latin America correspondent for ICIS, examined how these dynamics are already playing out in Brazil, the world’s sixth-largest chemical producer, and Latin America’s largest. “Major Brazilian chemical producers have already put pressure on their government to raise tariffs. If more Chinese products arrive in Latin America, chemical plants will have to close. Those companies are clamoring for protectionism to save their operations. Meanwhile, manufacturers who import chemicals into Brazil are pushing for lower tariffs because of their inflationary effects on prices,” he said.

Brazil maintains a substantial chemical trade deficit, totaling US$48.7 billion in 2024. André Passos Cordeiro, president of Brazilian chemical industry association Abiquim, told GBR in an interview for its Latin America Petrochemicals and Chemicals 2024 report that “a predatory surge in product imports has forced local companies to hibernate,” – an effect that Baida and López’ remarks in Panama indicate would become more profound in a scenario of US-China tension.

Mathias Dümmer, market analyst at chemical bulk operator Ultratank, examined how other global events and insecurities have affected the shipping industry in recent times. Since the start of Russia’s war in Ukraine, its oil shipments previously bound for Western Europe have been diverted to countries further-afield like India, China and Turkey – driving an increase in freight rates due to ships’ longer, less efficient journeys. Other factors including tensions around the Red Sea restricting access to the Suez Canal, and a growing “Dark Fleet” of sanction-dodging vessels, have also contributed to freight rate rises.

These higher rates in turn contributed to demand for shipbuilding. “Given the strong rate market, we saw an excitement to order new ships to enter the fleet within the next few years. However, with rate markets already softening slightly, we expect this demand to be lower for 2025,” explained Dümmer.

Prices for new-build ULCV containerships, VLCC tankers and Capesize bulk-carriers in 2024 were respectively 69%, 42% and 54% higher than in 2021, reaching highs not seen for more than a decade at least. For shipping operators like Ultratank, Dümmer said, this all implies higher costs, with a knock-on effect for consumers.

So what, then, for the Panama Canal? As Arnoldo Cano, manager of strategic planning at the Panama Canal Authority, discussed, the Canal has long maintained its critical role in global logistics thanks to a simple, crucial factor: time. Cano showed that across a variety of key maritime and multimodal trade routes, the Canal remains simply the fastest way from A to B. As a result, the waterway continues to dictate vessel construction, with the Panamax and Neopanamax size standards fitting precisely into its locks in a delicate, expertly choreographed operation.

Thanks to a major expansion completed in 2016, allowing for the larger Neopanamax size, and a greater utilization of Panamax-class vessels, the Canal’s tonnage throughput has grown even as the number of vessels transiting each day has remained the same (though with occasional climate-related disruption). Moreover, Eddie Tapiero highlighted that although new, competing routes are emerging – such as Mexico’s overland interoceanic corridor over the Isthmus of Tehuantepec – the Panama Canal is set to retain its importance thanks to the greater TEU capacity of maritime over rail transport.