The Roles of Logistics in Paraguay's Trade Competitiveness

Paraguay, as a landlocked nation, relies heavily on its logistics infrastructure to maintain and improve its competitiveness in international trade. Efficiency in transportation and logistics is crucial to facilitate the flow of goods and services, directly impacting operating costs and the country's ability to integrate into global value chains (Inter-American Development Bank [IDB], 2022). Paraguay's road network is essential for the land transport of goods. According to data from the Ministry of Public Works and Communications (MOPC), in 2019, the country had approximately 78,850 kilometers of roads and highways, of which 10,372 kilometers were paved (MOPC, 2019). This road infrastructure connects the main productive areas with consumer centers and export points, and is essential for domestic and foreign trade.

One of the most important road projects underway is the Bioceanic Corridor, which seeks to connect Brazil with Argentina and the northern ports of Chile through the Paraguayan Chaco. This project will reduce transportation costs and times to international markets, facilitating the export of agricultural and manufactured products (MOPC, 2023).4.1.2 Transporte Fluvial

Air transport in Paraguay is led by Silvio Pettirossi International Airport, located in Asunción, and Guaraní International Airport in Minga Guazú. These airports facilitate the transport of cargo and passengers, with connections to various cities in the Americas. However, cargo capacity is still limited compared to other countries in the region (National Directorate of Civil Aeronautics [DINAC], 2022).

Despite investments in road infrastructure, a large portion of the roads are still unpaved, which affects the efficiency of freight transport. The lack of maintenance on many roads generates additional costs for transporters and exporters, negatively impacting the country's competitiveness (IDB, 2021).

The lack of efficient multimodal infrastructure hinders the integration of different modes of transportation (road, rail, river, and air). Without adequate connections between these systems, transportation times and costs increase, limiting the competitiveness of Paraguayan foreign trade (World Bank, 2020).

The Paraguay National Logistics Plan 2030, developed by the Ministry of Industry and Commerce (MIC), seeks to integrate different modes of transportation and improve the country's logistics infrastructure. Priority is given to modernizing road routes, expanding the Paraguay-Paraná waterway, and developing regional logistics platforms (MIC, 2023).

The Inter-American Development Bank (IDB) has invested more than US$1.244 billion over the last 20 years to improve the country's road infrastructure, with key projects such as the paving of roads in the Chaco region and the construction of new logistics corridors (IDB, 2022).

Paraguay has made progress in logistics integration agreements with Brazil and Argentina to improve regional trade. The construction of the second bridge over the Paraná River and the digitalization of customs processes will facilitate trade flows with neighboring countries (MIC, 2023).

Infrastructure and logistics are crucial to Paraguay's trade competitiveness. Despite progress, significant challenges remain that must be addressed through infrastructure investment, regional integration, and modernization of the transportation network. With well-designed strategies, Paraguay can position itself as a key logistics hub in the region.

References:

• National Administration of Navigation and Ports (ANNP). (2022). Report on River Trade in Paraguay.

• Inter-American Development Bank (IDB). (2021). Infrastructure and Competitiveness in Latin America.

• Inter-American Development Bank (IDB). (2022). Investments in Road Infrastructure in Paraguay.

• World Bank. (2020). Logistics Performance Index Report.

• National Directorate of Civil Aeronautics (DINAC). (2022). Analysis of Air Connectivity in Paraguay.

• Ministry of Industry and Commerce (MIC). (2023). National Logistics Plan Paraguay 2030.

• Ministry of Public Works and Communications (MOPC). (2019). State of the Road Network of Paraguay.

• Latin American Energy Organization (OLADE). (2021). The Impact of the Paraguay-Paraná Waterway on Regional Trade.