How landlocked Paraguay built the world’s third largest barge fleet

On August 12, 2024, at a shipyard in Asunción, Louis Dreyfus Company inaugurated 12 new jumbo barges flying the Paraguayan flag. The commodity trader said the expansion lifts the capacity of its Paraguayan river logistics arm by 20%, to a fleet of 4 towboats and 92 barges once it is complete in early 2025. President Santiago Peña used the occasion to repeat a statistic that surprises most people outside the region: Paraguay, a country with no coastline, has the third largest barge fleet in the world.

A fleet bigger than its size suggests

Paraguay's merchant marine authority, the Dirección General de Marina Mercante, counted 3,850 vessels in the national fleet in mid 2024, of which 2,430 are cargo vessels working on international routes. The rest are smaller craft that operate only within the country. By that measure the fleet is the largest in South America and is regularly described by officials as the third largest in the world, behind the United States and China. A barge, for readers unfamiliar with river shipping, is a flat bottomed hull with no engine of its own; several are lashed together into a convoy and pushed by a towboat.

Officials and industry figures cited in the Paraguayan press put total investment in the fleet at around US$3,000 million. About 9,000 people work in the river sector, and 15 shipyards operate in the country, five of which build new vessels while the rest focus on repairs and maintenance.

The river as a road to the sea

The reason is geography. Paraguay has no sea port of its own, and its rivers are its cheapest route to world markets. The Paraguay and Paraná rivers form the Hidrovía Paraguay Paraná, a navigable waterway of about 3,442 kilometres running from Cáceres in Brazil to Nueva Palmira in Uruguay, shared by Argentina, Bolivia, Brazil, Paraguay and Uruguay. A 1992 agreement between the five countries set out principles for using it, including freedom of navigation, freedom of transit and equal treatment of each country's vessels.

That framework, combined with tax incentives that Paraguayan officials credit with attracting investors to the sector, allowed Paraguayan shipowners to build up a fleet that now serves not just Paraguay but the whole upper river. Cargo travels south in convoys to ocean ports in Argentina and Uruguay, where it is loaded onto seagoing ships.

What moves on the river

Peña said in August that about 80% of all Paraguayan merchandise already moves by river. Paraguay is one of the world's largest exporters of soybeans, and soy, soy meal and soy oil are the core of the trade. Fuel imports come upriver. Paraguayan vessels also carry large volumes of iron ore from Corumbá in Brazil: between 5 and 8 million tonnes in 2023, according to industry figures reported by La Nación.

The industry sees room to grow. Industry figures put the waterway's current traffic at about 20 million tonnes a year and believe that iron ore alone could take that much higher. The Paracel pulp mill being built in northern Paraguay is expected to add around 2.5 million tonnes of finished product a year.

The weak points

• Water levels. Barges need depth. Forecasters were warning in mid 2024 that the La Niña weather pattern could bring another season of low water, which forces convoys to carry less and slows exports.
• Dredging and tolls. Paraguay has dredged its own stretches of shared river since 2013. Its main complaint is with Argentina, which charges a toll on the lower river that Paraguay says is not matched by the maintenance it is meant to pay for.
• Bottlenecks upriver. Peña noted that 13 rocky passages on the upper river are due to be corrected under an agreement with an international company.

What it means if you are considering Paraguay

The river economy explains a good deal about modern Paraguay: why Asunción has a busy shipbuilding industry, why agribusiness and logistics firms keep investing, and why a small landlocked country can compete in global commodity markets. For entrepreneurs, it points to steady demand in transport, ship repair, storage, insurance, legal and technical services.

For individuals, Paraguay remains one of the more accessible residencies available, with no investment required for the temporary permit, a territorial tax system that generally leaves foreign income untaxed, and a path to citizenship after three years of permanent residency. We help clients apply, work with our local team, and quote our fees in writing.

This article is general information, not legal, tax or investment advice.