The port will translate into greater Chinese leverage over trade and infrastructure – further sidelining the US
This article was originally published by Pacific Forum. It is republished with permission.
China has emerged as an economic and strategic competitor of the United States in South America.
As part of the Belt and Road Initiative, China has funneled $1.3 billion into the new Peruvian Port of Chancay, a deepwater facility that became fully operational in November 2024. The port will deepen the trade relationship between South America and China, the region’s largest trade partner, and will reorient Pacific shipping networks away from US port infrastructure.
It will further elevate China as not only the region’s largest trading partner, but as a powerful actor with leverage over local infrastructure and trade at a time when the US has stepped back from free trade institutions and has increasingly isolated itself from the region.
North of Lima, the Port of Chancay is the first South American port on the continent’s West Coast with the capability to receive ultra large container vessels (UCLVs). With majority ownership (60%) held by the Chinese state-owned conglomerate COSCO shipping, the port has unlocked a new major transpacific shipping channel between China and South America that bypasses the traditional deepwater ports in the US and Mexico.
Before the construction of the Port of Chancay, no deepwater port along South America’s West Coast could handle UCLVs, which carry 18,000 to 24,000 shipping containers and require a port of at least 16-17 meters of depth.
Previously, these massive cargo ships had to travel north to Mexico’s Port of Lázaro Cárdenas or US ports of Los Angeles, Long Beach, and Oakland. This created a logistical dependency on these ports, as they served as a critical transshipment connection for UCLV cargo processing for South American trade. From there, goods would be reloaded onto smaller ships that would travel to smaller South American ports.
Chancay effectively eliminates this costly and inefficient detour. When Chinese goods pass through US transshipment ports, the US retains a degree of logistical control and visibility over the flow of goods. Chancay bypasses that system entirely, reducing US insight over Chinese trade into South America. The transition has already begun. In April, China announced its first major shipping lane from its southern port of Guangzhou directly to Chancay, which will now circumvent North American ports.
Chancay was expected to process 1-1.5 million shipping containers in its first year alone, with full capacity in the next several years estimated to reach 3.5 million.
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