Keeping up the pace

Relative newcomer Portonave views all ports in Brazil’s southern and southeast regions as competitors Relative newcomer Portonave views all ports in Brazil’s southern and southeast regions as competitors

A flurry of port development up and down the Brazilian coast compensates for weak infrastructure elsewhere on the continent. Alex Hughes reports

Read virtually any report on South American ports and the conclusion is always the same: the region is suffering from a lack of suitable infrastructure.

In the case of Brazil, where freight traffic continues to grow at dizzying rates, the situation is even more alarming. However, the deficit is being addressed and up and down the entire Brazilian littoral new capacity is either planned or already coming on stream.

While understandably Santos remains the main focus of international interest, one of the country’s more southerly states, Santa Catarina, gives a snapshot of what is going on in the country as a whole.

In the Itajaí River Port Complex, it already has the second largest container hub in the country after Santos. There are two major container terminals here, although the largest, Portonave, has been in operation for just four years, being situated on the Itajaí River at the city of Navegantes just opposite the APM Terminals facility in Itajaí city itself. It consists of 900 metres of quay and 270,000 m2 of paved retro-area. Given the presence of the local pork and poultry export sectors, it also has a cold storage facility able to accommodate 16,000 pallets.

“We don’t only serve the state of Santa Catarina, but increasingly other Brazilian regions as well,” says Osmari de Castilho, Portonave’s chief administrative officer.

In 2011, Portonave handled 545,000 teu, approximately equivalent to 44% of all box throughput in ports in Santa Catarina. It also accounted for 20% of all cargo imports and exports operated by ports across Brazil’s Southern region.

 

Strong competition

Mr Castilho says that all ports in Brazil’s southern and southeast regions are to a greater or lesser extent Portonave’s competitors, with each terminal having its own characteristics and competitive advantages.

“The Itajaí River Port Complex handles around 80% of containerised cargo in the state,” he says.

Good productivity, he adds, is one of the main reasons why shipping lines are keen to call, with Portonave able to achieve average hourly berth productivity of around 68 moves.

However, it's not a complete bed of roses. “We are not immune to the economic crisis affecting both the European and US markets. This is reflected in last year’s overall throughput at Portonave of 545,190 teu, which was about 6% lower than that of 2010.”

Nevertheless, 2012 has seen something of a recovery, with around 398,000 teu handled in the first eight months, with August alone accounting for 60,000 teu, the highest monthly figure since the terminal started operations. Mr Castilho therefore forecasts an end-of-year throughput figure somewhere in the region of 600,000 teu.

 

Floods and finance

Asked what impact that 2008 financial crash had had on business, he points out that Portonave only started operations in October 2007, but was then hit the following year by a devastating flood. Operations were therefore badly affected by what was a natural disaster, so it was not possible to measure the crisis of the economic downturn of that year.

Portonave’s current handling capacity is 1m teu/year, which is more than sufficient for current needs. Existing quayside lift consists of three gantry cranes, with the yard worked by 13 rubber-tyred gantry cranes. However, with future growth in mind, the terminal has invested in the acquisition of three ship-to-shore gantry cranes and five RTGs, which will enter in operations in 2013. Acquisition of new equipment has been made easier thanks to the “Reporto” tax system, which was introduced to stimulate the modernisation and expansion of port structures.

“Should traffic growth so warrant it, Portonave could double in size, adding a further 270,000 m2 of paved retro-area,” says Mr Castilho.

In terms of access, the main fairway has been dredged to a depth of 14 metres. Currently, the largest vessels calling are 294 metres in length, although plans exist to expand the manoeuvring basin, which will allow much larger visitors to be accommodated.

On the land side, rail is not yet a factor, with inbound and outbound traffic handled by the road haulage industry.

 

Lone rider

When APM Terminals decided to invest in Itajaí in 2005, it was then the only dedicated container handling facility in Santa Catarina state, with little in the way of competition from other regional ports.

“We were attracted to Itajaí mainly due to its potential in the reefer market and also in its strategic location, which allows it to serve the whole of southern Brazil,” says Ricardo Arten, APM Terminals’ managing director at the terminal.

However, other ports are now beginning to catch up, with box facilities having sprung up at Navegantes, Imbituba, São Fransisco do Sul and, as of 2011, Itapoá.

“These are nowadays recognised competitors, having invested a lot in equipment and infrastructure to attract business. However, here at Itajaí, we have not stood still; instead, we have improved service levels by offering world class operations to all our customers, be they shipping lines or cargo owners. We have boosted productivity levels and can offer around 80 moves per hour to most vessels. We have also achieved very low gate-turn times. These, plus competitive tariffs, make Itajaí a very attractive port to do business with,” says Mr Arten.

 

Handling hope

He claims that productivity at Itajaí is above average when compared with that of competitors, citing an August berth average of 76 moves per hour, while in terms of gross productivity, gantries have achieved 33 moves per crane hour, which he says is most certainly the best productivity yet achieved in Santa Catarina.

In terms of throughput, APM Terminals own facility saw basically flat traffic last year – 385,323 teu compared to 384,949 teu – although the company also made use of some of Itajaí’s commercial quays, boosting overall throughput by more than 15% to 443,537 teu.

“Much of the growth was mainly due to an increase in imports, brought about by the government offering tax incentives, although both export reefer and standard container did well, too,” says Mr Arten.

Significantly, the south of Brazil is the biggest producer of poultry and pork in the country; hence APM Terminals can often handle around 3,000 reefer containers per month, although the traffic is concentrated in the hands of a small group of producers.

In the first eight months of 2012, throughput handled by the company was reported down 7% to 286,275 teu.

“2012 has been encouraging and we predict an end-of-year throughput close to 450,000T teu. Although network changes by shipping lines have had a negative impact, overall volume has remained similar to last year,” says Mr Arten, who notes that the financial crash in 2008 had little or no affect on box traffic in the port.

As for investment, berth APMT 1 is being rebuilt at a cost of $42m, which is part of the reason APMT deploys its mobile harbour cranes on commercial quays to handle some cargo. Plans to expand the overall operational area at the terminal are also being progressed, although will depend on the port authority granting changes to the concession.

At present, says Mr Arten, there are no restrictions or tax disincentives on the terminal importing handling equipment from overseas and contracts in place with major suppliers makes it possible to add to quay and yard lift capability very quickly if required.

Current draught of 11.2 metres is sufficient to meet existing needs, although studies indicate that this could be dredged to 14 metres. Largest calls to date have been by 294 metre length overall/33 metre beam vessels; however studies under way are looking at boosting this to 300 metre LOA/45 metre beam vessels by the end of 2012, with a new turning basin expected to be ready by 2014.

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