25/11/2010  Transportation is very developed in the Highlands of Venezuela and the Maracaibo Basin and extends in the Llanos. Venezuela section of the Pan American Highway extends through a large arc across the country, via Caracas. The Orinoco is navigable to large vessels in high seas as Ciudad Bolivar and small boats beyond.
Seaports are the leader of Puerto Cabello, Maracaibo, and La Guaira. Simón Bolívar International Airport, near Caracas, is the country's main international airport.

Venezuela has one of the best road systems in South America. amounts of railroad tracks about 250 miles (400 km). Caracas has a metro system only from Venezuela.

Many inland areas, especially in the Highlands Guiana, are inaccessible except by air. 

 

Shipping Report Q4 2010

 

Rather than part of the solution, central government takeovers, in Venezuela at least, may be a big part of the problem. Reports in late May that Venezuela's largest port, Puerto Cabello, was on the brink of collapse appeared to vindicate BMI's warnings that the nationalisation of the country's port sector would be to the detriment of its efficiency and the overall stability of the country's trade sector. Dockworkers cited by AmericaEconomia (AE), claimed that operations at the port had been stretched to breaking point following a lack of investment in the facility since it was transferred to the federal government.

 

The workers estimated that only seven of the port's 70 cargo handling machines were functional, forcing vessels to wait up to 10 days to load and unload cargo at the facility. In March 2009 Venezuela's National Assembly voted to hand over control of the country's transport links to federal authorities, which were previously under state control.

The decision saw three ports - Puerto Cabello, Maracaibo and Porlamar - placed under the control of the federal government. All three had been in the hands of states governed by leaders from parties in opposition to President Hugo Chavez's government. At the time of the takeover, we  cautioned that the nationalisation of Venezuela's freight transport sector, and in particular its port network, would threaten the flow of trade to and from the South American country

 

Resistance to Chavez's seizure of the port sector, which had so far been muted, appears to be growing and a report released by the Carabobo regional government (the former operator of Puerto Cabello) in May 2010 suggests that the nationalisation of the port has dramatically reduced its efficiency. More widely, the operating environment for the Venezuelan ports and shipping sector was not encouraging. The economy was stuck in recession, and the government's destructive economic policies, particularly the management of the exchange rate, were pushing up inflation. BMI felt it could not rule out Zimbabwe-style hyperinflation further down the road. Although losing support because of the recession, President Hugo Chávez' ruling Partido Socialista Unido de Venezuela (PSUV) was expected to spend heavily in preparation for congressional elections in September, seen as a key test of strength in advance of presidential elections in 2012.

 

With the government less popular but the opposition still fragmented, the outcome of the elections looked uncertain. Political risk therefore remained high, underlined by the earlier takeover of key ports by the federal government. we was predicting a GDP contraction of 3.8% in 2010, the second consecutive year of recession. We projected a recovery in 2011 with 3.2% growth, but put average annual growth in the five years to 2014 at a disappointing 1.5%.

we are  projecting another fall in volume at the Port of Puerto Cabello (POPC), down by 10.8%, after the massive 58.9% contraction during 2009. At the Port of La Guaira (POLG) we see this year's volume falling by 3.7%. Puerto Cabello is also expected to see 1.7% container handling contraction, in addition to the 2.4% fall experienced in 2009. The Port of La Guaira will see a fall of 3.4%

In real terms, we expect Venezuela's total trade (imports + exports) to contract again this year, following the steep 17.2% fall in 2009. For 2010 we are projecting that there will be a contraction of 8.0%, driven most dramatically by a fall in imports, which will be 15% down as a result of low demand and foreign currency rationing. It is only in 2011 that we see foreign trade enjoying a weak recovery, with growth of 3.4%.

For the five-year forecast period, annual foreign trade growth in real terms will be 0.5%, lagging a full percentage point behind GDP. In nominal terms, this year's imports will be down a third to US$64.04bn, while exports will suffer a similar drop to US$80.46bn. As an oil exporter, we see Venezuela maintaining its annual trade surplus for the foreseeable future.

 

The downside risks to our forecasts for the Venezuelan ports throughput this year also threaten to have a knock-on effect on exports, which, in 2010, we expect to grow by 4% year-on-year (y-o-y) in real terms. With export revenues a vital source of Venezuela's economic output, we cautions that ongoing obstacles to shipments threaten to drag GDP down further from our forecast 3.8% contraction in 2010.