Latinports Newsletter October-December 2013

October-December 2013Year 5, No. 4

Ranking of Container Terminals in Latin America in the First Half of 2013

All Change at the Top: The Heavy Hand of Politics Interfers in Brazil’s Ports Again

To Hike Maersk Latin American Hipping Rates

More... More... More...

West Africa: The Land of Opportunities (A Risk for Latin America?)

CONTENTSOctoberDecember

2013

Editorial

West Africa: Six of the World’s Fastest-growing Economies

DesignJulian [email protected]

- The Necessity of the Large-scale Port in Chile

VIEWPOINT

- APM Terminals’ CEO: Giant Vessels a ‘Burden’ for Ports

THE INTERVIEW

ANALYSIS- Poor connectivity threatening Latin America’s commercial growth

EXECUTIVE COMMITTEE AND MANAGEMENT

- Executive Committee: Objectivs 2014

- Executive Director’s Presentation in TOC Miami

- Ranking of Container Terminals in Latin America in the First Half of 2013

- All Change at the Top: The Heavy Hand of Politics Interfers in Brazil’s Ports Again

- Mexico and Brazil are Holding Back the Growth of Latin America in 2013

- West Africa: The Land of Opportunities (A Risk for Latin America?)

LOGISTICS AND COMPETITIVENESS

WATERWAYS

- National Confederation of Transport of Brazil Launches Study on Waterways Modal

http://www.miroamarillo.com

mailto:studio%40miroamarillo.com?subject=Desde%20el%20informativo%2C%20Info

October - December 2013CONTENTSCONTENTS

LATIN AMERICAN PORT NEWS

Mail

- Vessel Sharing Agreement for Crowley and Seaboard

- Hapag-Lloyd Evaluates Association with Chilean Shipping Company

- The Suez Channel Wins Competitiveness Thanks to Shipping Lines P3 Alliance

- Maersk Line Sees Shipping Overcapacity for Five Years

- To Hike Maersk Latin American Shipping Rates

- Compañía Chilena de Navegación Interoceánica built 9,000 TEUs vessel

MARITIME TRANSPORTATION

EVENTS

- LatAm Ports & Logistics Summit, Panama

October - December 2013

EditorialWith this edition of New Year’s Eve we fulfil an important cycle in Latinports communications, because beginning in 2014 we will disclose the most relevant economic and port-maritime regional news through a much more modern and practical system which consists of distributing real-time via our website www.latinports.org , a summary of the news as they are occurring, giving the option to delve into them to those who so wish to do it. In this way we will be much more agile.

As far as the situation of Latin America refers in the year 2013, was marked by many and diverse factors that affected one way or another to foreign trade and hence to the port sector: the market entry of ships of more than 18,000 TEUs as a result of carried out orders makes about five years, when the shipping industry believed that the market would continue to grow at rates of the annual 10% not foreseeing the huge crisis that soon incurred the European Union and United States, which only begin to recover; alliances of the most important maritime lines, reducing touches and disproportionately increasing the freight charge to solve the consequences of the crisis; the rapid growth and potential in the countries of West Africa; the slowdown in Latin America’s economies and the clamor of international organizations because the countries in the region accelerate its investments in infrastructure of various modes of transport and increase the multimodal transportation, guaranteeing them growth through a significant reduction of costs; the advance of Chinese investments in the region and the stagnation of the U.S.; and more. On these issues we will discuss in detail in this edition.

Worries greatly that the Report of Competitiveness 2013 of the National Confederation of Industry from Brazil, reported at the close of this edition (mid-December), which compares 15 countries of the world with similar socio-economic characteristics and positioning in the international market, it has placed the main economies of Latin America in the last places in the General Classification (Argentina 15th, Brazil 14th, Colombia 13th and Mexico 12th) as in the assessment of particular Infrastructure and Logistics (Colombia 15th, Argentina 14th, Brazil 13th and Mexico 11th). Something comforting, however, the fact of that Chile has been located in the block of the most competitive, in a 6th place (5th in Infrastructure and Logistics), after Canada (1st), Korea South (2nd), Australia (3th), Spain (4th) and China (5th), and over South Africa (7th), Russia (8th), India (9th), Turkey (10th) and Poland (11th).

Notwithstanding the foregoing, seems that in 2014 the things will start to improve and that we aim you from this column, with the hope that the fruits of investment in transport infrastructure begin to be reflected in the growth of GDP as a result of a greater competitiveness of our foreign trade.

Happy holidays and a great year 2014 to all of you!

Julian Palacio, Executive Director

of Latinports

http://www.latinports.org

http://www.latinports.org


AnalysisPOOR CONNECTIVITY THREATENING

LATIN AMERICA’S COMMERCIAL GROWTH

While the growth rates of national economies in Latin America have declined in recent years, is still expected that the two largest economies, Brazil and Mexico, recorded an increase of more than 3% yearly, while also expected significant growth in Colombia (4.7%), Chile (5.1%) and Peru (6.3%). This growth is one of the four factors identified by the specialist in insurance of cargo transportation, TT Club, in its last analysis of country-by-country market the region: market opportunities in transportation and logistics.

At the beginning of the month of October, the Senior Club insurer, Dan Negron, presented the results at TOC Americas of Miami, which collected Mundo Marítimo. “Two examples of strong economies are Colombia and Peru. The latter has increased five times their trade exporter over the past decade, while Colombia registered a growth rate of GDP held in the region of 5% in recent years. Both countries mean vigorous, fundamental driving forces behind international trade have classes”, explained Negron.

This economic growth is one of the four factors set out in the analysis of TT. The other three are: Government policy, better connectivity and distribution channels. It is clear that various government policies, particularly the privatization of ports and the free trade agreements, are very important in terms of increasing trade. However, Negron said that the need for greater investment in national infrastructure to improve the connectivity of the transportation within the region and the need of supply chain logistics services to be more organized, are at risk of preventing business growth to reach their full potential.

While the Latin American ports are organised increasingly better, the infrastructure used to move goods to and from the locations of production and domestic consumption have not modernized at equal pace. “In addition to this need for capital investment to improve connectivity, functions of deposit, transportation by road, consolidation of cargo and other related services tend to be carried out by individual operators or by the same exporters. “Therefore, systems are often not fully


integrated and cannot be a supply chain efficient unified”, Negron said.

The pending task in port infrastructure

Greater costs investment in port infrastructure are due to canons of lease, concession, etc. Many times, these high costs slow down new projects and expansions, putting at risk all of the large operation and affecting the logistics chain. One of the main reasons why is decided to expand a port is the need to improve productivity, together with increasing the efficiency of the entire logistics chain and, of course, increase the ability to transfer. If Latin America wants to compete in the big leagues, you must invest and reduce costs. The expansion of ports and make its operations more efficient is based on the need to reduce the costs of handling of the load. According to the report “Doing Business Report 2013” of the World Bank, in 2012 a container exported from Latin America was close to US1.353 on average, a value that exceeds the cost of the OECD’s US1.028. Imported into the region worth US1.549, substantially more than the US1.080 container of the OECD.

Improving port efficiency goes through improved land transport

When we talk about saving the first thing that comes to mind is to buy cheaper, but the truth is that the cheap is expensive. Franc Pigna, CEO of Aegir Port Property Advisers, company that advises on the purchase of port assets, counted in TOC Americas about solutions that can make more bearable the much-needed port expansions and thus leaving the task pendent, as reported Mundo Marítimo. Moreover, Pigna says that in terms of infrastructure and port operation, “the region is varied, with places such as Venezuela, which has an infrastructure of ports that represents a great challenge, and Colombia, where privatised ports development and have worked very well, since the private sector is in compliance with international standards for the operation.” There are also ports with very good operation in Chile and Mexico and challenges in Argentina, as well as to some extent in Brazil”. This speaks of a variety in terms of “efficiency in Latin America”.


Against improvements in ports, Pigna highlighted the need to optimize “the financial behaviour of all your assets, but mainly of the largest and most strategic: his real estate”. In his opinion, efficient land management will succeed in freeing up resources to invest or simply to increase the return on the shareholders. Among the proposals of the experts is the incorporation of technology in processes that today are made manually, as the cargo and documentation revisions. Pigna stands out that automation “of certain processes makes them almost instant, which saves time and simultaneously makes it difficult to corruption”. In addition, emphasizes the specialist, Governments must collaborate with the task, facilitating coordination among different public agencies, adopting the “single window” systems, that is already under way in several countries.

Also, another problem that is deeply rooted in the root of the port business in the region is logistics. A dichotomy between the wide variety of ports and operators and system failure connection between ports and centers of production and consumption occurs. The ground logistics ends boycott the proper functioning of the port, as the high transport costs and frequent delays tarnish eventually dock work. Therefore, improvement of port efficiency is to improve land transport.

“By requiring high investment, historically the port infrastructure has always been backward in comparison to the technological advances of the boats. In the past 10 years, the advances in technology of ships has accelerated to such an extent that it has exceeded the capacity of the port authorities maintain a day”, says Pigna. In addition, he notes that “in the past 30 years, the majority of Governments has experienced increasing

budgetary constraints from all angles of the governmental responsibilities, such as defense, social benefits, education, among other topics. This has been an inadequate capital base to deal with the growing problem of maintenance, modernization and expansion of the respective port structures”.

Since port infrastructure goes two steps further back than the rest of the aspects of modernization, this has forced, and will continue to “forcing Governments to explore different ways of financing port infrastructure, it will be more and more through the private sector, fueling the corporatization of the port authorities and, in some cases, privatization, so to access private capital markets”.

Without losing sight that in Latin America’s biggest challenge is the gap of infrastructure investment, as Pigna points out, and that the answer at this point lies in “invest, invest, and invest,” another key issue within this so-called holistic vision, is the coordination of the various actors of the logistics chain. This is critical within the same public sector so there is consistency between the requirements of customs, who monitor the border crossings, and even those who govern the provinces and municipalities. As Pigna says, “in the short term the challenge in the region will be adequately finance the modernization and expansion of the interface ‘sea-land’, mainly in ports”. In the medium term, the challenge will lie in taking charge of the logistical bottlenecks located behind the ports and the Interior land due to the inadequate (and often free) road and rail infrastructure and storage and distribution centers located inside near the industrial bases. And long term, the challenge will be in thinking as an integrated region and streamline logistics and transport resources to


create a modern network of logistics.”

As we can see, there are many pending tasks and challenges are multiple, so the only recipe for success is to go by parts, take it easy and go the way of safely. However, the time to act is now if that Latin America does not want to lose the ground gained on the road to development. Pigna says it loud and clear: “it is critical that the region begins to make serious efforts with respect to economic integration. Today’s competition is not between nations but between regions, logistics chains and global cities. This is the Latin American challenge: creating an integrated economic bloc that can take advantage of its competitive advantages. A great step forward is developing a regional system of taxes, rates, automated customs and cargo processing”.

Latin America could increase its exports reducing internal transportation costs

Latin American countries can significantly increase its exports, especially from poor and remote towns that still have not received the benefits of the recent commercial boom in the region, if they concentrate their efforts on the reduction of the costs of internal transport, according to a new study of the Inter-American Development Bank (IDB) reported by Diario Financiero Online. In the document entitled “Too far for export: The costs of internal transport and regional disparities in Latin America and the Caribbean” discussed the tribute imposed by the infrastructure of transport by truck from the region, precarious exporters and unbalanced geographically.

The study concentrated on Brazil, Chile, Colombia, Mexico and Peru, concludes that countries in the region could significantly increase its exports if they reduce transportation costs by investing judiciously in the expansion of the network of paved roads and in promoting the use of less expensive rail and river routes. A reduction of just 1% of transportation costs would allow an increase in exports of 4% in Mexico and up to 7.9% in Colombia, according to the model of the authors. Biggest beneficiaries of a more developed and efficient transport infrastructure would not be in Sao Paulo, Mexico City, Bogota, Santiago or Lima, but in the Center-West of the Brazil, South of Mexico, the Peruvian Andes, South-Eastern Colombia and southern Chile, said Trade Economist of the IDB Mauricio Mesquita Moreira, Coordinator of the study. The report estimates that exports of those areas that still have not received the benefits of the recent commercial boom in the region, increase between 10% and 45%.

In the five countries studied, exports are overwhelmingly concentrated in a few municipalities, often prosperous, enjoying immediate access to ports. Other municipalities, most distant, they are usually in rural areas with a lower transport infrastructure, they are less competitive because they face higher logistics costs. In Brazil, for example, it exports only 19% of the municipalities, which account for just 27% of the country’s territory. In Colombia and Peru, only exporting 24%


municipalities. In Chile and Mexico, the export base is much broader (exported 69% and 39% municipalities, respectively), but the majority of exporters are concentrated in a few cities: top ten municipalities generate 74% of exports in Chile and 69% in Mexico. generan 74% de las exportaciones en Chile y 69% en México.

This landmark report, prepared by the Integration and Trade Sector of the IDB, is part of the constant effort that is carried out to deepen the understanding of the political authorities about the consequences that have high costs of transport for trade. It follows the publication, five years ago, the report titled

“Releasing the arteries: The impact of the costs of transport in trade in Latin America and the Caribbean”, devoted to the examination of the impact of the high costs of international freight on the competitiveness of the region’s exports. In both reports came to the conclusion that, although the region has made to open markets, domestic and abroad, today are not the traditional tariff or non-tariff barriers that lock the exports of Latin America, but the cost of shipment of the goods. The primary reason is the insufficient volume of investments, especially in means of transport alternative and cheaper, as the railways and waterways. In some cases, this failure can be attributed to budgetary reasons, but many times, due to the difficulties faced by public institutions to design, evaluate and carry out investments in transport infrastructure. A reform of regulations, which allows Governments to increase investment by the private sector is also required.

All these difficulties hinder the development of promising infrastructure initiatives undertaken by all countries covering the study. Are they national logistic plans of Brazil, Chile and Colombia, and programs of roads of Mexico and Peru which, if carried into practice completely, will positively influence the transportation costs and, eventually, benefit more remote and less developed regions.


ViewpointTHE NECESSITY OF

THE LARGE-SCALE PORT IN CHILE

“We have a historic opportunity to set a solid base that will allow us to ensure a strengthened, and healthy economy without the obstacle of the possible lack of infrastructure for dynamic international transactions to future generations,” said the Minister of Transport and Telecommunications of Chile Pedro Pablo Errázuriz during development in Santiago on the workshop of the International Transport Forum (ITF) in November - thereby giving account of the interest that the Government has had to modernise port capacity of the country - theme that spoke with Mundo Marítimo.

It is the early change of administration in La Moneda (presidential residency), thet allowing the Minister to

carry out a preliminary assessment of the actions of the Government on this matter: “I think there it has really been a gigantic process of transformation, i.e. we had been long without concession of new berthing fronts” said, highlighting the risk that spread considering the temporal distance between the concession of a terminal until its fully operational. In this regard emphasized that rather than culminate the Government, “Let’s have concession 8 State ports, new fronts of berthing: Coquimbo, San Antonio, Valparaíso, Talcahuano, more growth of San Vicente and in addition what we are working and hope delivered to grant: Iquique, Puerto Montt, Chacabuco and almost ready to be awarded,

Mundo Marítimo interview with the Minister of Transportation and Telecommunications of Chile, Pedro Pablo Errázuris.


Antofagasta. “When we go will have about 80 million tons of capacity under construction, doubling the existing 40 million”, said. Investment that exceeds the US 1.8 billion to which is added the advances of studies of the Grand Scale Port (PGE in Spanish), which could, according to the Minister, estimated tender is in 2015.

A need after 100 years

The Minister Errázuriz stresses that “it was critical to expand capacity” and that this “had to change the way of looking at things and look towards the future”. He argued in addition that: “is merit of the team from the Ministry have put the issue on the table and having both companies of San Antonio and Valparaiso, begin quickly to carry out all the necessary studies to be able to bid”, fact that acquires great value considering that “after 100 years is again necessary to build sheltered waters”. He explained that current port capacity, most which will operate from 2017 and already they are running, they allow to have one port capacity between 2022 and 2025, time that will be cornering ability. “Then in that minute should have a new port and PGE is that alternative. The port capacity that will be then in the macrocentral area is equivalent to 4 million TEUs and these ports will involve between 3 and 6 million additional TEUs”, he said.

Regarding the advantages and disadvantages between one and another project to develop first the GEP, the Minister warned that both are in very preliminary stages and their characteristics may vary. However, he said that “if I had to say it

today, I think that the great virtues of San Antonio are deeper waters, boasts a large Esplanade and a very happy with this vocation of the port community and that has a relative advantage”. About Valparaiso, indicated that “also has a community minded port, but a little less. It has one slightly more complicated, but not so much connectivity more”. However, he pointed out those aspects, noting that a point where Valparaiso has advantage over San Antonio is in its workers that they have “an attitude, always, more positive”. In this sense, he stressed that “there is a challenge of improving labour relations in San Antonio”, holding in this regard that “if one is to embark on a big investment, it has to have a better working relationship”.

Planning for 30 years

In addition the Minister told La Tercera that part of the portfolio planning in charge will result in delivery in December, to President Sebastian Piñera, of the National Plan for Port Development, a letter of navigation in port development for the next 30 years. “The idea is that front of berth is not only regarded, but how to get to the port, the development of railways, highways, in general, the port connectivity. Within this plan, responsibility is given to the ports of presenting a more comprehensive look at the works, which will not only remain with the concern of berthing ships, but how to get the cargo to the port”, said Errazuriz.


The InterviewAPM TERMINALS’ CEO:

GIANT VESSELS A ‘BURDEN’ FOR PORTS

Handling ever larger ships in today’s ports is like trying to “squeeze buses into a parking lot designed for cars,” said to Port Finance International APM Terminals’ CEO, Kim Fejfer, in the middle of November interview. To take up the challenge, operators need to invest in equipment and it is a burden that “has to be shared with our customers,” he told.Headquartered in The Hague (Netherlands), APM Terminals is part of the Danish conglomerate A.P. Moller-Maersk, which also owns Maersk Line, the shipping company that operates the world’s largest containerships, the 18,000 TEU Triple-E vessels. But more than 50% of its business comes from other shipping companies.Between July and September, the port operator handled 9.3 million TEUs, its highest quarterly

throughput ever. “There is a couple of factors,” he explained. “First and foremost, the market has grown by almost 4%, so slightly better than in previous quarters. Then we have worked all year on improving productivity and efficiency and some of the efficiency gains that we have worked hard on have really come out in the last quarter. The last component is the portfolio. For a couple of years now, we have focused on investing in high growth markets and some of these investments in capacity are starting to show in our accounts.”

Trends

“We expect the market to continue to grow,” Mr Fejfer said. “We also see that the container


shipping lines continue to have a tough game in terms of the balance between supply and demand. And we see that the vessels that are coming in are getting bigger and bigger. Ports are built a little bit like a parking lot that has the size to handle cars, while what we are receiving and handling now is more like buses. So we try to squeeze buses into a parking lot designed for cars.”

“Of course we have to find ways to improve the productivity. That is what our customers demand, because it is getting more and more expensive, as vessel sizes increase, to lay at berth. We’re trying to see how we can utilise our berths in an optimal way because bigger vessels claim more berth capacity. So a lot of this will require more equipment, more investment. And this burden that has been imposed on this industry has to be shared with our customers. APM Terminals’ CEO could not say whether the burden would weigh equally on port operators and their customers. He did admit, however, that it would have an impact on tariffs. “That is of course one way where it will show,” he said. “But there is more to a relationship between the shipping lines and the port than a simple tariff,” he insisted.

“The value that lies in the business between shipping lines and port operators is very much related to the network of the shipping lines. With the bigger vessels and with the rise in fuel costs that we have seen over the past years, the value of reliable service, high productivity and the availability of port capacity at the right locations are much more important than the simple tariff discussion,” he said. “At the end of the day, if the port is creating joint value, if we can find good solutions with the shipping lines, where we work together on this big issue, then hopefully both parties can win in the end.”

Productivity

“An increase in productivity can be achieved in many different ways,” Mr Fejfer noted. “The dialogue between shipping lines and port operators in the planning is very important for productivity, and that’s a win-win situation. Also, improving safety performance, which we focus a lot on at APM Terminals, is driving a lot of efficiency in the business. “We have a partnership approach with our customers,” insists APM Terminals’ CEO. We meet at a strategic level several times a year with each of the customers and we go through the business, each port in the portfolio, discuss what is going well, what is not going well, and the opportunities where we can work together in the future.”

Strategy

APM Terminals has focused more on emerging markets in recent years and it plans to sustain its momentum. “We continue with our strategy, which is based on what we call ‘earning the customer’. We want to invest our money in the locations where there is a customer need and that is obviously in the markets that grow the highest. It is our job to identify where the bottlenecks are and where therefore new capacity is needed”. In the port of Santos, Brasil Terminal Portuário (BTP), a joint venture between APM Terminals and Terminal Investment Limited (TIL), received its first commercial vessel call in August.

http://www.portfinanceinternational.com/features/item/873-apmt-s-portfolio-shifting-weight-from-mature-to-emerging-markets



http://www.portfinanceinternational.com/categories/regulation-policy/item/1020-btp-starts-vessel-operations






On October 2nd at the Intercontinental hotel in Miami, on the occasion of the TOC Americas held in this city, the Executive Committee of Latinports met with the presence of President Arturo López and the members Jorge Lecona of Hutchison, Mexico; Melvin Wegner of the Ultramar Group, Chile; Andreas Klien of Multiterminais, Brazil; and Jorge Luiz Mello of the Companhia Docas do Rio de Janeiro, Brazil. The main conclusions with regard to the objectives for 2014 were:

- Realization of general and special courses for executives

- Trend of the shipping industry and its effect on the ports of the region

- Oversizing of terminals?- Port models and recruitment of employees

document (ECLAC, Unctad, World Bank, IMF,...)

- Achieve the same tax advantages that have the shipping terminals in Brazil, by offering a logistics package

- Public-private approach- Strengthen relations between ports and

terminals in the region through attending international seminars (networking) Latinports and exchange of personnel for training employees

Under this suggestive title executive director of Latinports, Julián Palacio, showed at the beginning of October as trade between Latin America and the United States had been declining dramatically as, according to ECLAC, the latter has lacked a trading strategy toward its neighbors. Meanwhile China has been rapidly gaining space, growing 22 times in 12 years (2000-2012) with US265.000 billion in 2012. The same situation occurs in investments, where China already surpassed the European Union as a second investor in the region, product of its growth from 25 times in the same period (US245.000 million in 2012).

Concluded Julián Palacio wondering whether it was suitable for the United States to continue ignoring the significant growth and positioning of Latin America, a region that for the President of China, Xi Jinping, “is entering a golden age”.

In late November, almost two months after the presentation of the Latinports’ executive director in Miami, the Minister of Trade of Costa Rica, Anabel Gonzalez, showed similar figures in the 7th China, Latin America and the Caribbean Business Summit, describing them as “impressive”, commenting at the same time that the construction of an environment conducive to business must be accompanied by actions that, as this Summit, to promote a

EXECUTIVE COMMITTEE AND MANAGEMENT

OBJETIVES 2014 EXECUTIVE DIRECTOR IN TOC MIAMI:NEW ERA FOR US-LATIN TRADE?


for Latin America and the Asian giant is to encourage investment flows, in accordance with Emol.com article picked up by Latin Business Chronicle.

better approach to enterprise-level to provide knowledge and mutual understanding, and that lead to the increase, diversification and sophistication of trade flows. The Minister added that in 2012 China was the main investor globally, so one of the objectives in the future

Cover of The Economist in December 2010


LOGISTICS AND COMPETITIVENESS RANKING OF LATIN AMERICA’S CONTAINER TERMINALS IN THE FIRST HALF OF 2013

A report by ECLAC and transcribed by Mundo Marítimo, said the ranking that it recorded the movement of containerized produced in the main ports of the region, indicates that, at the level of countries, those who managed to be within the Top 5 of the list were (in TEUs figures): 1) Brasil: 4.098.241; 2) Panama: 3.277.845; 3) Mexico: 2.410.094; 4) Chile: 1.908.780 and 5) Colombia 1.420.258.

Meanwhile, the 10 ports that at the level of the region recorded higher TEUs movement were (in parentheses 2013/2012 variation): 1) Colon, Panama: 1.675.989 (-5,3%); 2) Santos, Brasil: 1.604.478 (7,0%); 3) Balboa, Panama: 1.592.768 (-4,7%); 4) Manzanillo, Mexico: 1.035.457 (9,7%); 5) Cartagena, Colombia:

958.280 (-5,0%); 6) Callao, Peru: 885.411 (1,7%); 7) Guayaquil, Ecuador: 788.794 (0,7%); 8) San Antonio, Chile: 604.906 (9,9%); 9) Buenos Aires (not include Exolgan), Argentina: 549.300 (10.8%); 10) Caucedo, Dominican Republic: 545.512 (6.3%). The following five ports are: 11) Lazaro Cardenas, Mexico: 532.762 (-9.1%); 12) Valparaiso, Chile: 485.734 (-2.4%); 13) Montevideo, Uruguay: 480.959 (27.7%); 14) Veracruz, Mexico: 434.874 (14.5%); y 15) Buenaventura, Colombia: 387.633 (-3.1%).

Latinports considers it necessary to mention that in this ranking Colón (1st), Balboa (3rd) and Cartagena (5th), are transhipment ports mainly, so the five main ports of the region moving containers of foreign trade, are: 1) Santos, Brasil; 2) Manzanillo, Mexico; 3) Callao, Peru; 4) Guayaquil, Ecuador; y 5) San Antonio, Chile.

Montevideo: Greater growth

ECLAC also pointed out that the port of Montevideo, expanded 28% and totaling 480,000 TEUs in the first six months of 2013, was


the port which grew most in the movement of containers in the first half of this year, among the most important ports in the region. Montevideo terminal growth was greater than that recorded Buenos Aires (11%), which was the second most increased their movements totaling 590.000 TEUs. The growth of Montevideo and Buenos Aires took place within a framework of reduction of port activity in Latin America, due to the slower growth of the world economy. However, in early November the Argentine Government banned from his country’s export goods to make transhipments in ports of Uruguay, whereupon the movements of the port of Montevideo would fall a 26% and would disappear 150 container calls, as it considered the Uruguay Center of Navigation.

ALL CHANGE AT THE TOP:THE HEAVY HAND OF POLITICS INTERFERS IN BRAZIL’S PORTS AGAIN

The latest political tremors have seen ports minister Leonidas Cristino leave the stage to be replaced by a safe pair of hands, as rival factions jockey for position, wrote Container Management CM in its November edition. Latinports transcribed this extensive article for sharing that political port-sector management is endemic not only of the Government of Brazil but of all Latin American countries in general, and to call the Govrnments’ attention in the sense that, if not taken urgent measures in relation to the appointment of technical and not political in the sector, as do Brazil, very possibly will continue losing competitiveness compared to development countries and even facing emerging countries as Africans on the East Coast. The massive upheaval that this year has seen the ongoing transformation of the Brazilian ports

sector -wich is supposedly destined for some US$23.8 billions of new investment- has seen another eartquake, with Ports Minister Leonidas Cristino standing down from the controversial post and handing over the reins to economist Antonio Henrique Silveira.

It seems that once again the heavy hand of politics has intervened in the Brazilian ports landscape. Some might argue that Cristino lost his position as an indirect result of the riots that plagued the country’s streets during the Confederation Cup soccer tournament in June this year and the subsequent dive in popularity of the country’s President, Dilma Rousseff. Many might also argue that a change was needed to dispel the “air of animosity” between the Specias Secretariat of Ports SEP and port communities, an that an early change in attitude has alrady come abot, with new port concessions being written up for 25 years (plus 25) insted of the 10 years duration that Cristino and his teem has been advocating for some concessions. Warner Moreira, technical director of the Association of Brazilian Port Terminals ABTP, said that Silveira was a “técnico” appointment and not a “político” one, and that this was definitely “a good thing”. He told CM: “Silveira is an economist, but he has been following the port leasing process very closely


as he has been contracted by Glesi Hoffmann, President Rousseff ’s chief of staff and head of the Casa Civil (the President’s executive office) and he has thrown himself into the processeven further since Cristino left his post. Silveira has an open mind and people are hoping for a new

way of looking at the tenders. Cristino was not popular with many people”.

Until his promotion to the presidency of SEP, Silveira who has an impressive academic pedigree in Bahia and Rio de Janeiro -had been working as an economics advisor to the government, in particular the Federal Economists Foundation. One veteran Brazilian port expert and official, who declined to be named, said that Silveira could be seen as “safe and honest pair of hands” and that this economics and financial background might be useful for keeping an eye on expenditure and investments, especially with so much corruption during the period when Alfredo Nascimento was Transport Minister (2007-2011). He said: “Bringing in Silveira from the finance ministry would seem to indicate that Dilma is going to

Antonio Henrique Silveira, New Minister of Ports of Brazil

try and keep tight financial control over the huge investments being planed through SEP”.

The same expert added that Cristino almost certainly had to leave his post as head of SEP as soon as the leader of de PSB party, Eduardo Campos -one of his political mentors- decided that the would withdraugh his party’s support from President Rousseff ’s government coalition (led by the Partido dos Trabalhadores PT or Workers’ Party) and instead make plans to stand against the incumbent in next Octuber’s presidential elections. “It’s yet another example of how ineficient our system is, with many of the key posts at our ports, and in de ports and transport ministers, being political appointments”, explained the expert. “Once again the port system has been thrown into uncertainty and turmoil by something that has nothing to do with the ports and everything to do with scheming politicians”. He continued: “It is so often the case that these people -and cristino is one of them- know next to nothing about the ports and transport system and yet they end up making all the big strategic decisions. One good thing about this turn of events is that Silveira does seem to be a safe pair of hands and has already given out some conciliatory signals, such as agreement to minimun 25-years contracts and having more discussions with port communities in Paranaguá, Salvador and Santos before moving ahead with the tender process”.

When Campos threw his political bombshell into the arena, Cristino was away on a diplomatic mission to cuba, visiting the Mariel Container Terminal, wich is being built by Brazilian construction company Odebrecht. When he


returned from La Havana there were strong rumours that he -and two of his other political mentors, the Gomes brothers (Cid being being the Governor of Pernambuco and Ciro a former government minister)- might actually switch parties so that he could continue in his role as SEP president. But eventually he left -with no-one quite sure if he jumped ship or was pushed- and Silveira stepped into the breach.

Political Patronage

The CM source, who in the past had worked for the government in the ports sector and still works closeley with Brasilia, said that the system of patronage was to blame. Only rarely, in his opinion, did it throw up a “politico” like Pedro Brito, the former Ports Minister and now director-general of Antaq (the national water transportation agency), who quickly gets to grips with what is required to progress the port sector.

Many of those working for the Ministry of Ports have been appointed by Cristino or his aides and so will not have the political will to put through difficult concessions, some of wich are immensely unpopular in port circles. Some, such as the one for an area that includes breakbulk operator Rodrimar and car terminal Deimar in Saboo, Santos are also subject to legal injuctions. The source told CM: “Campos belives he can be a serious candidate for the presidency, so he and his allies at PSB are breaking their alliance with PT to give him space to build a separate campaign. “In some ways these sudden political changes have, in fact, been building up since the demonstrations against President Rosseff during the Confederations Cup back in June. The some extent the demonstrations created a shock to

the parties supporting Rousseff, who seemed unassailable beforehand with 75% approval ratings in the polls. Now that has sunk to 35%, a number of of political allies are abandoning her and her party”.

Interestingly, Marina Silva, the lider of Brazil’s Green Party, who has an impressive 18% share in the polls, has joined forces with Campos to provide a stronger left-wing opposition to Rousseff ’s PT party. Aecio Neves of the PSDB (the party of former Presiden Fernando Henrique Cardozo) is the third political force in Brazil today. One immediate effect of Cristino’s departure has been a far more conciliatory attitude from SEP, Antaq and the government in general to deep-seated and vehement opposition to the plans drown up by EBP (Brazilian Project Structuring Company) at the behest of the government, Rousseff, Cristino and Hoffmann. This has already resulted in Silveira, via SEP, agreeing with Wilen Manteli, the powerful and inluential president of ABTP, that the

Wilen Manteli, ABTP’s President


concession contracts currently being processed should be for 25 years minimum and not 8-10 years that were being touted for some tenders.

Morera of ABTP confirmed that the vast majority of contracts will now be for 25 years, and observed that Silveira and Mantelli seem to have “an affinity for each other” wich will be good for the ports sector. He told CM: “It is a new move by the government to back contracts for 25 years -certainly all those in Santos- with just one exception”. The one exception is the tender for the new general cargo, car terminal and container terminal that will be created by the merger of Deicmar (car terminal), Rodrimar (general cargo and container) and Citrosuco (fruit juice terminal). It is understood that once the contract of the Ecoporto terminal (formerly Tecondi) runs out for a few years’s time, that will go into the port with these three to form a “super terminal” on the right bank of the port of Santos.

Invest or Face Collapse: BNAmericas

Meanwhile BNamericas, in Infrastructure Intelligence Series of November 2013, with respect to the ports of Brazil published the study referred to in this subtitle, whose Executive Summary we will transcribe:

With the introduction of greater competition and an ambitious program of investments in new infrastructure, Brazil seeks to overcome bottlenecks that choke its port system, increase cargo movement and reduce logistics costs. The concessions of public ports will be awarded to those who offer the largest cargo handling capacity and the lowest cost for the management.

For the granting of private terminals, the most significant change is the elimination of the requirement of having own to act as operator, loading which extends the range of interested to allow the entrance of companies that handle others cargo.

However, there are risks on the road. The changes have generated some resistance, especially among operators with existing contracts in public ports, since the Government has opted for return to tender these terminals rather than renew contracts or give them special treatment. Experts fear a prosecution which may complete much delayed the privatization process.

In this publication BNAmericas refers to two comments on executive director of Latinports in what refers to the program of investment and persistent bottlenecks, which transcribe:

“I have spoken to some of the main operators in the world, and have expressed to me that his primary interest is currently Brazil,” said Julián Palacio, executive director of Latinports, association that joins Latin American ports and terminals – public and private –. Palacio argues that while in the present the port development in Brazil and Latin America is in the hands of the private sector, “that is doing very well,


investment in complementary infrastructure and connectivity corresponds to Governments and in that they should concentrate on the short term”.

For more information on the complete study of Infrastructure Intelligence Series, you can write to [email protected]

MEXICO AND BRAZIL ARE HOLDING BACK THE GROWTH OF LATIN AMERICA IN 2013: STANDARD & POOR’S

Standard & Poor’s Director of Ratings for Latin America, Roberto Siphon-Arevalo explained that the major economies yielded below expected during the second half of the year significantly: EFE report picked up by La Tercera and Latin Business Chronicle.

The Latin American economy has evolved steadily in 2013, but will close the year with growth below expected initially product of the brake which generates a worst performance of Mexico and Brazil, estimated S&P. “The region has developed relatively steadily throughout the year, but in terms of GDP we hope that closing 2013 on the low side of expectations” as a result of which the main economies of Latin America yielded below expected during the second half of the year “significantly”, said

in early December Ratings Director for Latin America of SP, Roberto Siphon-Arevalo. “Both economies represent two thirds of the product inside gross of Latin America, so if you do well, the region tends to go well, but when going bad, then also tend to impact negatively”, said Siphon-Arevalo at a press conference. In any case, the rating agency predicts that things go “slightly better” during 2014 in the region, due in part to that commodity prices will remain at the same levels of this year. Even so, S&P expert warned of the negative impact that can have on the performance of Latin America other external factors such as a possible China’s economic growth at lower rate of expected or US monetary policy.

In the specific case of Mexico, the rating agency recalled that earlier year expected that the economy would grow in 2013 at a rate of 3%, but now predict the end of the year around the 1.5%. The expert recalled that this year the Government of Mexican President, Enrique Peña, has sent to Congress several projects pending structural reforms, which included taxes and, above all, the energy. The approval of the energy reform will be important, but its implementation will become still more, added Sifon-Arevalo, who was optimistic to 2014 and said that the Agency predicts a growth of Mexican GDP of the 3.2%. As for Brazil, ratings director of S&P for Latin America recalled that earlier this year they expected a growth of GDP of 3.2%, but was later revised downwards around the 2.5%, and even we are left short. Siphon-Arevalo said that next year the scene sounds

mailto:[email protected]


tan 50 countries, and is roughly the same size as the United States, Western Europe, China, India and Argentina combined. Currently, however, it accounts for only 3% of global trade. That said, it is in its second decade of sustained growth and, according to The Economist, six of the world’s fastest-growing economies are in sub-Saharan Africa.

Some countries have enjoyed growth in income per person of more tan 5% a year since 2007, among them Zambia, Ghana, Mozambique and Uganda.

Its comes as no surprise, then, that the continent represents a massive opportunity for the container industry. As Drewry noted in July this year: “In contrast with mature US and Western European market, Africa is still deemed to offer high growth potential due to comparatively low levels of containerisation and rising demand for for finished goods. Compound anual growth of container traffic passing through the continent’s

not too different, and the reforms that are missing in the country still are not on the political agenda, an issue which, as he warned, is beginning to have an impact on GDP and credit.

Asked about the situation in Argentina, the S&P expert noted that the risk of a technical default remains high, and recalled that recently his firm downgraded the country note to CCC+ and placed it on negative outlook for a possible new degradation. “We have detected a deterioration in most of the macroeconomic fundamentals in the country and the scenario we envisage is quite complicated, added Sifon-Arevalo, who mentioned among other recent tax hikes on foreign investment.

In its latest report on the region presented last October, S&P had predicted that Latin America would close 2013 with “lackluster growth”, while for 2014 expected a “slight rebound”.

WEST AFRICA: THE LAND OF OPPORTUNITY(A RISK FOR LATIN AMERICA)

Despite its vast size, Africa currently accounts for only a tiny fraction of world trade. However, things are changing, with the west coast in particular becoming a hub of activity, as Dan Blows writes to Container Management.

The continent of Africa is home to some 15% of the world population, spread across more


Of a total of 63,000 km of rivers and canals, only 41.635 km are navigable and, of these, only 20.956 kilometers (50.3) are economically used.

The data are in the Regional Market of Tribune column, based on survey of the navigation inside of the National Confederation of Transportation CNT. Among the main problems of the waterways sector listed in the study, are the absence of maintenance of waterways, the lack of government investment, the high cost of maintenance of the fleet and the excessive bureaucracy. For the President of the CNT, Clésio Andrade, if the modal waterways was most widely used in Brazil, the national economy strengthen.

NATIONAL CONFEDERATION OF TRANSPORTATION OF BRAZIL LAUNCHES STUDY ON THE WATERWAYS MODAL

ports already reach 12% between 2001-2012, with even higer growth of 13% in North Africa due to its location just off the arterial routes between Asia and Europe. Container handling capacity also increased up to an estimated 37 million TEU in 2012”.

Much industry attention is focused on the continent’s west coast, particularly Nigeria. According to Steve Cameron, marine director of RTI Forensic Engineering and an Africa expert with decades of experience in the región, the reasons for this are numerous. The country is reach in natural resources and has a large, young and rapidly growing population. Indeed, by 2013 Lagos is spected to be the world’s third largest city by population with around 25 million

inhabitants, and by 2050 Nigeria is projected to be the world’s six most populous nation with 287 million residents.

WATERWAYS


The Tribune column adds that the port of Santos has, on the waterway Tietê-Paraná, an important link in its supply chain, uniting the interior of the State to the Great São Paulo. And, currently,

studies exploring the rivers of the Baixada Santista to facilitate access to its terminals.

MARITIME TRANSPORTATION

VESSEL SHARING AGREEMENT FOR CROWLEY AND SEABOARD

the Chilean Compañia Sud Americana de Vapores CSAV, about a possible alliance and/or an eventually fusion. The Hamburg-based company said that those talks are focused on “a possible combination of business or any other form of association would be of mutual interest”. However, they explained that “at the moment, is has not signed any agreement or declaration of intent”. Similarly CSAV, through a statement designates that it remains talks with various players in the industry, including dealings with Hapag-Lloyd AG for a potential combination of load or other forms of association with respect to the container business. As told by the German company, CSAV expressed that “to date these talks have not resulted in any agreement”.

In relation to their strengths, Hapag-Lloyd has established itself on routes linking Europe with Asia, while CSAV is in Latin America, aspects that could be an opportunity to merge both shipping. Hapag-Lloyd offers almost 100 line services, a fleet with a total capacity of approximately

According to Mundo Maritimo in early December, Hapag-Lloyd acknowledged discussions with

Crowley Maritime Corporation’s liner services group and Seaboard Marine Ltd. have announced a new vessel sharing agreement that will provide reliable, weekly service on larger ships between South Florida, Costa Rica and Panama.

HAPAG-LLOYD EVALUATES ASSOCIATION WITH CHILEAN SHIPPING COMPANY


730,000 TEUs, and a stock of nearly 1.1 million TEUs of containers, including one of the world’s largest reefer container fleets.

In recent years, the Hamburg-based transport group had taken contacts with Neptune Orient Lines (NOL) of Singapore for an association. All this with the ultimate aim of improving its cost structure with a view to an eventual integration of the shipping companies called P3 (Maersk of Denmark, MSC, of Switzerland, and CMA CGM, France). Hapag-Lloyd, whose integration with the firm Hamburg Süd not reached agreement in February 2013, it has ruled out becoming part of this mega-Alliance.

THE SUEZ CANAL WINS COMPETITIVENESS THANKS TO SHIPPING LINES P3 ALLIANCE

Already begin to reveal details of the services of the P3 Alliance formed by the big three of the world such as Maersk, MSC and CMA CGM, in Asia-Europe route, trans-Pacific (Panama Canal vs Suez) and transatlantic, which is expected to run in the second quarter of 2014, if there is no regulatory hurdles. The Maersk Line website reveals the outline of these three great operational Alliance, which remains the same as it had been announced last June, with 252 ships for a total capacity of 2.6 million TEUs. Of this amount, Maersk will contribute approximately the 42% or 1.1 million TEUs, including their new ships Triple - E, with MSC that represent little more than one third and CMA CGM 24%.

However, an article of Capital, transcribed by Mundo Marítimo, points out that each one of the

lines will be able to offer more sailings weekly on their combined network that individually, citing the example of eight weekly departures between Asia and Northern Europe. Ports will also has more direct services. In total, there are 13 weekly services between Asia and Europe, five transatlantic services and 10 between Asia and North America. Three of them will they go through the Suez Canal, but it will only stay a service through the Panama Canal that links Asia with the United States Gulf and which will arrive in the port of Manzanillo, a reflection of the current limit of the size of vessels that can use the Seaway.

According to the justification given by the alliance for this service is that it will offer the benefit of connecting to other markets, including South America, Europe and the Middle East. Also says the Alliance that this service provides opportunities for load to Houston through the route “all water”, against the traditional railway route from the U.S. West Coast.


Maersk Line, the world’s biggest container shipping company, sees no quick fix for overcapacity in the industry that it says will continue for at least five years. The company, part of Danish oil and shipping group A.P. Moller-Maersk Group, is a bellwether of global trade as its ships make up 15 percent of world container shipping capacity.

The shipping industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. “We will without doubt in five years time from now have an industry with plentiful capacity,” Maersk Line Chief Executive Soren Skou told the Reuters Nordic Investment Summit. “We cannot create demand by lower prices. It is more important to remove capacity,” he said.

When the economic crisis hit in 2008, global

trade and shipping companies’ orders for new vessels were as much as 50 percent of the existing fleet. The overcapacity has driven spot rates on the main routes between Asia and Northern Europe to loss-making levels. Maersk Line cut its fleet container capacity by about 1 percent between the second quarter of 2012 and the same period this year, but it has not announced any plans to cut further. Shipping analyst Jacob Pedersen from Sydbank described the current market as brutal. “If competitors follow Maersk Line’s strategy and adjust capacity it will benefit the entire industry via significantly better freight rates,” he said. Among 12 big container shipping lines, only two - Maersk Line and France’s CMA CGM - reported an operating profit in the first six months of 2013.

Before the crisis, Maersk Line and other container shipping companies had growth in demand for seaborne containers of more than 10 percent a year. But those days will not return, Skou said. “Growth in the container industry in

MAERSK LINE SEES SHIPPING OVERCAPACITY FOR FIVE YEARS

New vessels ordered before the downturn have flooded the market.

Soren Skou, CEO Maersk Line


from the world economic downturn.

Latin America accounts for around 14% of the world container trade and Maersk has some 15% of the region’s market. Brazil represents approximatly 20% of Maersk Line’s Latin American business. “The ports in Brazil still have a long way to go before they become competitive”, Van Trooijen added to Reuters, as Container Management informed. “Ideally, a container should move through a port in 12 hours at most. In Brazil, the average is 14 days”. This, he said, has more to do with bureaucracy and custom-clearence activities in the so-called back yards rather than servce at the dock, an área controlled by Maersk’s logistics department. Even where the docks are modern and eficient, ports in Brazil remain too small for Maersk’s largest and most efficient ships. The SAMMAX vessels (7.450 TEUs capacity) being built for Latin America, while among the largest to visit Brazilian ports, have half the carrying capacity of Maersk’s biggest ships that service Asian, North America and European ports, he said.

the future is more related to global economic growth,” he said. He said he expected global demand for seaborne containers to increase 2-3 percent in 2013.

To cope with the tough market conditions, Maersk Line managed to reduce total costs per container by 12.7 percent in the second quarter from a year earlier. The decrease was mainly driven by lower fuel costs and logistical route efficiencies. Maersk Line uses about 8 million tonnes of fuel a year for its 596 vessels, costing around $5 billion. The hunt for lower fuel consumption has been high on the agenda in recent years.

The company has ordered 20 Triple-E class mega vessels with a capacity of 18,270 containers each. The vessels use 50 percent less fuel per container than the average for container ships on routes between Asia and Europe. “And they are 20 percent more fuel efficient than Emma-class ships that are the biggest and most efficient at the moment,” said Skou. Maersk Line operates eight E-class ships. Three of the Triple-E class ships have already been delivered to the shipping company from Daewoo Shipbuilding & Marine Engineering’s shipyard in South Korea.

TO HIKE MAERSK LATIN AMERICAN SHIPPING RATES

According Robert Jan van Trooijen, Maersk’s CEO for Latin America, the company plans to raise its Latin American shipping rates by as much as 30% this year to staunch losses and to pay for 16 ships being built for the región. The decision follows Maersk’s struggles to recover

Robert Jan van Trooijen, Maersk’s CEO for Latin America


CHILEAN INTEROCEANIC NAVIGATION COMPANY SIGNS CONTRACT TO BUILD 9,000 TEU VESSEL

The Chilean Interoceanic Navigation Company (CCNI in Spanish) announced that it has signed a contract with the Shipyard Hanjin Heavy Industries Construction, through Andes Navigation, to build a ship for approximately US$89 million. According to the company, the

The 1st LatAm Ports & Logistics Summit is a BNamericas event with the support of Latinports, and will highlight the main port and logistics projects in Latin America, the framework in which they develop, the factors that will shape the business environment, and the trends occurring within the sector. This event will unite government & port representatives, logistics suppliers, shipping companies, terminal operators, port equipment & technology suppliers, banks & investors as well

9,000 TEUs vessel will have a cutting-edge design and a more sleeve, as well as to achieve low fuel consumption. In the same letter also explains that the acquisition of the ship will be financed with a loan with the German bank Norddeutsche Landesbank Girozentrale (“NordLB”), called the Facility Agreement, worth up to US$ 66.000.000. It is estimated that the loan to take place jointly with the delivery of the ship by the shipyard, at the end of the month of may 2015, showed CCNI. Note that the construction contract, also includes a direct credit of the shipyard for a value up to US$ 4 million in favor of Andes Navigation.

as legal & insurance firms. It is expected to host over 35 speakers and 150 C-level executives over the two days. Key topics to be discussed at the 1st LatAm Ports & Logistics Summit include: the Panama Canal expansion and its impact on maritime traffic and port competitiveness in Latin America, Intermodal transportation & Inter-oceanic Corridors, new Hub Ports in South America, Mexican Port Strategy, Railways and Ports in Latin America, Risk Management and financing port infrastructure, new technologies enhancing port efficiency and competitiveness

Latinports’ executive director, Julian Palacio, will participate in a panel on Port Policy in Latin America on March 26.

You will find more information about the event on the website www.latamportssummit.com or via e-mail to [email protected]

Eventos

http://www.latamportssummit.com

mailto:[email protected]


Port authorities will have new management model

Valor, in an interview with the Minister of ports, Antônio Henrique Silveira, stressed that he “will need to test their knowledge of distinguished Economist - that is his reputation in the Palace of Planalto - to carry out the reform of the port sector”. Silvera rejects the idea of creation of a new State-owned enterprise and anticipates that the Secretariat of ports SEP, is going to hire a consulting firm to design a new model of management of the port authorities for application in Santos, Rio de Janeiro and Para. According to the Minister, for the short term, the SEP plan is to report a table of maximum tariffs that can collect practical pilots in the ports. And it points out that the Government can still make changes in lease bids, including a rediscusion of risks in contracts. The text also highlights that Silveira clarifies that, even if he

is willing to consider all claims, a premise must be observed: the purported to reform port efficiency should be reflected throughout the chain and not just on the margin of the port operator.

The report mentions criticism of the design of the container terminals and asks why the Government favours the creation of new terminals instead of expanding the existing ones, to which Silveira replied: “it is true that container vessels come from such rapidly increasing, which brings the need for sufficient docks to berth of these ships; but also have to take into account the following: what is the situation of competition in the relevant market?...Santos has five terminals size medium to large; in Santa Catarina and Paraná, in a relatively small space of the coast, there is a profusion of container terminals in ports that can compete with each other. “It is necessary to design a model of bidding on that, eventually, we have advantages over the current Terminal. However, we must ensure that the efficiency of port operation gain passes to the rest of society. That is the big point. I can’t take an attitude of an enlargement that bring efficiency to the terminal only and does not reflect the rest of the logistics chain. If not, I only would give greater margins to operator”.

Latin American Port NewsOctober - December 2013

Brazil


EMOL.com reported that the Spanish companies of the building business ACS, FCC, OHL and Acciona expressed their interest in the project in the Paso de Agua Negra, consisting of two parallel tunnels that will connect Argentina and Chile through the Andes. The project is valued at 630 million euros (US 852 million) and according to the binational entity for the project, Ebitan, in the list of the 23 companies interested in participating in the construction

Antaq, federal regulator of waterways of Brazil, in November gave green light to six new port projects totaling US 151 million in investments. These ports are the first to be approved under the new legislation of the sector, to which followed them by others within the framework of the program of 50 port concessions that the Federal Government promotes. The new ports can operate without making any difference between its own cargoes and others. Approved initiatives include the project of US 43.3 million, Porto Velho, in the Northern State of Roraima. At the conclusion of the works, Porto Velho would mobilize 4 million tons of grain a year.

of the same figure ACS through its subsidiaries Hochtief and Dragados, FCC construction, OHL and Acciona Infraestructuras and Copasa. Among the firms involved in the tunnel are also Daewoo or Hyundai Engineering, China Railway Construction Corporation.

Expected project, strategically located within the central strip of the two countries, would be awarded in 2014. Agua Negra tunnel has been considered priority for both countries since it attracts traffic that does not compete with any transits of contiguous steps. Comes with a step system Christ the Redeemer of the Mendoza-Valparaiso connection and when it is built also concur in their support to relieve congestion on it or during this temporary closures due to winter storms.The project consists of two parallel tunnels, one for each direction of traffic: descending from Argentina to Chile and up from Chile to Argentina, from 13.9 kilometres in length. Argentina and Chile share one of the longest borders in the world, which also runs along the Cordillera de Los Andes. Agua Negra pass is one of the 13 road steps that Chile and Argentina have agreed so that they receive preferential budget service. The tunnel will be built to seismic recommendations, according to the source.

Chile

Six first port projects are approved according to new regulations

Spanish companies show their interest by tunnel that connects Chile and Argentina


Millionaire revolution in road transport infrastructure

Colombia that has had the country in its entire history andby far. Perhaps it is the largest project and more ambitious that is getting underway in Latin America, said Santos in the release of these concessions that have expressed interest in participating 69 companies, about half of them Colombian, but also from Spain, Brazil, Chile, Mexico and United States.

In this model Public Privat Partnerships PPP will have special importance because the contractors will first elaborate the way designs and will receive environmental licenses to then, now yes, to build them and start charging tolls. The President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, said that to make Colombia a successful country in the next 20 years is watching the long-term competitiveness with a vision that integrates public-private participation. A recent study by the consulting firm Serfinco noted that the participation of private investment in infrastructure construction has increased in the last ten years, from 0.1% in 2000 to 1% in 2011, but to make it more dynamic will need a greater efficiency of the State on issues as agility of contracting entities for the granting of concessions and times for delivery of environmental licenses, among others.

In any case, the Government with this revolution in roads aims to overcome the backlog in infrastructure that adversely affects the competitiveness of the country, immersed in a process of conquest of markets. This policy has taken strength during the current Government with trade agreements signed with the United States, the European Union (EU), South Korea, Panama, Costa Rica, Canada and Israel, among others, as well as the creation of the Pacific Alliance which includes Colombia, Peru, Mexico and Chile.

The jewel of the crown of this initiative is the fourth generation of roads concessions (4G), which consists of 47 projects totalling 25 billion dollars over the course of eight years, said the economic newspaper Portfolio citing EFE. Thus the Government aims is to remove Colombia of the position 126 deals around the world in quality of roads, according to the Global Competitiveness 2012-2013 Report of the World Economic Forum.

The first part of this ambitious programme was launched at the beginning of November by President Juan Manuel Santos and the head of the National Agency of Infrastructure (ANI in Spanish), Luis Fernando Andrade, with the opening of nine bidding processes to build a total of 1234 kilometers of roads whose value amounts to about 5.840 million dollars. That is, without a doubt, the most ambitious project


The backwardness of Colombia in infrastructure is not only with developed countries, but with its own neighbors, as in a Serfinco calculation on roads surfaced per 100 square kilometers, Colombia was 1.2, less than half the average for Latin America, which reached 2.5, and light years away from the average of 50.3 of the countries of the East and Pacific Asia. The consequences of the bottleneck, as has called Santos to the backwardness of the country on its road network has been verifyied by the Colombian Infrastructure Chamber, according to which the cost of transporting a container by land from Bogota to the port of Cartagena, distant cities some thousand kilometers, is $3,200, while carrying it from Cartagena to Shanghai (China) on the other side of the world, it costs one-third.Realized this plan of transformation of highways will benefit not only international trade in the country but for the whole of the economy, because in addition to the gain in competitiveness, the Government estimates that about 400,000 jobs will be generated in rural areas of 24 of the 32 departments in the country during the construction phase. In the whole of the Gross Domestic Product (GDP), these millions of dollars investments will provide 1.5% during the construction of the roads and close to 1% when they go into operation, a result not insignificant for a country which this year aims to grow more than 4%.

Federal Government expects approaching double port movement in 2019

stage of the second terminal specializes in container in Manzanillo, the Secretary of Communications and Transportation of Mexico, Gerardo Ruiz, said that the country will double its port movement at the end of the present administration, once is projected to move from 4.8 million to 8 million containers, and increase from 283 to 500 million tons the movement of cargo in port terminals. The country has over 11 thousand kilometers of coastlines and 16 ports with broad logistical capacity, so it represents an area of opportunity for the development of the merchant marine and climate for port potential to contribute more to the growth of the Mexican economy, boosting employment in addition.

El Sol de Cuautla, quoted Mundo Marítimo, reported by putting into operation the first

The official said beside the President Enrique Peña that if well the Mexican Merchant Marine has reached this year a record by 3.4 million tons, there is still a great potential for growth in this sector. He stressed that in the ports of Manzanillo, Lazaro Cardenas, Veracruz and Altamira, mobilizes 95 percent of the containers that are managed in the country. Therefore, he said, it’s imperative to expand the capacity of the ports, because otherwise the possibilities of the development of our international trade

Mexico


would severely restricted and, consequently, the economy of the country.

Ruiz explained that from now the port of Manzanillo, considered to be the most important in the country, will increase its capacity to handle containers of 1.9 to 2.5 million per year, with the generation of a thousand 500 direct jobs and 3,500 indirect. He explained that on a surface close to 46 acres, were built two docks with a length of 360 meters each, allowing the berth of large super post panamax type vessels. This new Terminal has four last-generation automated gantry cranes, as well as

new yard cranes that will allow time for loading and unloading of containers to be reduced to less than half. It features new areas of storage and one intermodal, which can match up to six trains of 350 meters each, as well as necessary warehouses, maintenance areas and administrative offices. Also, will be delivered urban road distributors which allow quick and safe access to the port area, builted at a length of more than 9 km, seven branches of ascent and descent, three footbridges and green areas. Once finished the first stage, will be held two more during this federal administration.

Very interesting your magazine.

Paul J. GallieGeneral DirectorAPM Terminals Moin, S.A.Limon, Costa Rica

I found very interesting your newsletter and useful for our work.

Rolando Terrazas Director Southern Region ProjectsLatin America Development BankCAF

Congratulations. The newsletter is excellent.

Rodolfo SabongeFormer Planning & Commercial Development VicePresidentPanama Canal Authority

Very interesting publication.

Juan Camilo SaldarriagaPresidentStarcrop Ltd.Colombia-UK

Congratulations on the content of the newsletter.

Martin Gustavo IbarraPresident Araujo Ibarra AssociatesBogota, Colombia

I appreciate the coverage provided by Latinports to the new process of delegation preparing for the port of Manta.

Roberto SalazarPresidentManta Port AuthorityEcuador

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Latinports Newsletter October-December 2013

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Transcript of Latinports Newsletter October-December 2013