The economic costs associated with landlocked status

Two Latin American republics, Bolivia and Paraguay, lack sovereign access to ocean ports. Their landlocked status effectively forces them to export and import products through borders with neighbouring countries; for this purpose, they frequently use land transport modes which are intrinsically more costly than ocean transport. However, being distant from ocean ports is an attribute not only of landlocked countries; but also of states or provinces, such as Mato Grosso, in Brazil, or Tucumán, in Argentina, which belong to countries with direct access to the sea. If perfect political and economic integration were to be achieved in the region, the distances and topographic accidents between points such as La Paz, Bolivia, and Arica, Chile, or Asunción, Paraguay and Paranaguá, Brazil, would remain unchanged. What would disappear would be the delays at border crossings and their related costs. For the two landlocked countries, border expenses, although significant, are a relatively small fraction of the cost of the land segments of international transport. More important for these countries, are the dependency of infrastructure services and the institutional framework of the transit countries for the transport of their external trade.