It\u2019s a race to the top on the West Coast of South America for at least the next five years. The four countries involved are unanimously seen as being the big prize in Latin America, with some industry executives talking up the region as the best market in the world. And the picture is clear that the western seaboard is outshining the east.<\/p>\n
No one disputes Drewry\u2019s forecast of a 6.5% growth in container trade for the continent as a whole in 2012, but a kind of \u201clopsided view\u201d is becoming more apparent. \u201cFar too much attention is paid to container volumes as the barometer of progress,\u201d says one observer. \u201cBreakbulk is being ignored in all the buzz \u2013 and that is where the real growth could lie.\u201d<\/p>\n
The East Coast has lost some of its lustre because of Brazil\u2019s dominance and the likelihood that the government wants domestic terminal operators to take control. Argentina is proving a disappointment.<\/p>\n
At latest count, at least five international engineering consultants and terminal operators have set up offices on the West Coast and two are said to be thinking of moving their Latin America offices there.<\/p>\n<\/p>\n<\/p>\n
<\/p>\n
Pole position <\/p>\n<\/p>\n
<\/b><\/p>\n
Leading the race for growth is Callao, where DP World and APM Terminals are happily ensconced. Says Joe Nielsen, managing director of APM Terminals in Latin America: \u201cTaking over the Muelle Norte in Callao, Peru, has been a significant effort and success so far.\u201d<\/p>\n
APM Terminals plans to spend $750m on stages one to five to 2022. Container capacity throughput is planned to rise to 2.9m teu a year from 800,000 teu today. This significant investment is part of an even larger plan to invest a total $2.5bn in Latin America including ongoing investments by APM Terminals in Costa Rica, Mexico, Brazil and the project in Callao. These investments are are seen as essential to improve infrastructure.<\/p>\n
Mr Nielsen says: \u201cWe are keen to invest to help raise Latin America\u2019s seaborne trade, to satisfy the needs of many markets for better infrastructure, and to contribute to raising the living standards and economic standing of local people.\u201d<\/p>\n
While some observers see APM Terminals entrance into Callao as a direct challenge to DP World’s terminal in the same port, Mr Nielsen explains that it is more than just a competition: \u201cOur aim is to operate an ever more efficient port, which is turn will be a great value contribution to the economy of Lima and Peru. For example, truck turn times have improved to 17 minutes from 56 minutes when we took over – a clear efficiency improvement to truck drivers, importers and exporters and at the same time a win for the environment.\u201d<\/p>\n<\/p>\n
Management moves<\/b> <\/p>\n
He says the group\u2019s management philosophy has been the key to the improvement. \u201cEven down to such things as appropriately marking lanes for the trucks and getting in new handling equipment, including two mobile harbour cranes.\u201d<\/p>\n
The terminal is a blend of containers, breakbulk, reefers and general cargo. \u201cWe have no preference for any particular cargo.”<\/p>\n
Mr Nielsen terms relations with the Peruvian government as \u201cmaturing extremely well. It\u2019s a synergetic relationship as they see the benefit of having a top port operator, as does the port authority.<\/p>\n
As with most operators and consultants, APM Terminals is keen to expand on the West Coast and is looking at other prospects: \u201cColombia offers a very progressive attitude towards private investments, in its business policies and involvement in infrastructure,\u201d says Mr Nielsen.<\/p>\n<\/p>\n
Different terms<\/b> <\/p>\n
In contrast to APM, which took over an existing facility, DP World won a 30-year concession for a build, operate, transfer contract on a Greenfield site. A big cash flow difference is that APM pays 17%-18% of income to the port authority, while DP World is largely free of that obligation.<\/p>\n
Matt Leech, managing director of the Americas region for DP World, is equally optimistic about prospects. \u201cThere is no question that the economic situation is very robust and there is plenty of traffic for two operators at Callao.\u201d<\/p>\n
DP World has ploughed in at least $300m into the 24 ha site. The two berths have a 16 metre draft, and can handle two post-panamax 8,000 teu vessels simultaneously. \u201cOur customers tell us we are the most productive in South America,\u201d says Mr Leech, with about 30 gross crane moves per hour.<\/p>\n
\u201cWe are very happy with operations and the port ranks at the top in modernisation in South America.\u201d<\/p>\n
Just how important the port is to the group\u2019s operations can be gauged by the fact that chairman Sultan Ahmed Bin Sulayem paid a visit recently and was almost effusive in his praise.<\/p>\n
Automation throughout Callao is not as advanced as in developed countries, but land and wage costs are probably 30% lower.<\/p>\n<\/p>\n
Two goals<\/b> <\/p>\n
Mr Leech says the two main aims at Callao are abiding by the terms of the concession contract and earning a decent return on investment. Groupwide, throughout the world this stands at about 15%.<\/p>\n
Callao is proving straightforward in terms of dredging and widening. Jan de Nul has been the operator there and says: \u201cThe port is protected, in the north, by a breakwater of approximately 1.25 kms from NE-SW, and in the south by a breakwater of approximately 1.1 kms from SE-NW. That makes it fairly well protected from inflow of sediments. In 2011 however, the entrance of the port was widened from 180 metres to 280 metres, by shortening the northern and southern breakwaters, and as such allowing post-panamax vessels to enter.<\/p>\n
\u201cThis shouldn\u2019t influence the volume of sediments in the port,\u201d says a spokesman for the company, \u201chowever it is too soon to evaluate this.<\/p>\n
“The channel itself does not suffer too much from silting, as there is a strong dominant current from south to north, orthogonal on the entrance channel. Furthermore, the dredged slopes of the channel have proved to be stable (as shown in several surveys until now) which means that there is no threat from siltation of the channel.<\/p>\n
“A lot of fine sediments are coming from the river RIMAC, and enter the sea, to the north of the northern breakwater. As the dominant currents go from south to north, these sediments cannot enter the port.
The biggest siltation is noticed at the south.\u201d<\/p>\n<\/p>\n
Channel hazards<\/b> <\/p>\n
Jan de Nul says that it was no surprise that wreck removal was needed, as dredging had not been done for many years. \u201cWe took into account the environmental risks. The wrecks were first cut up under water to more workable sizes, and brought afloat by means of air pillows.\u201d<\/p>\n
Peru\u2019s investment agency ProInversion is said to be ready to grant a concession for General San Mart\u00edn port in the Pisco region. The area was extensively damaged in an earthquake in 2007.<\/p>\n
A 30-year port concession is being looked at, including the construction of two new berths.<\/p>\n","protected":false},"excerpt":{"rendered":"
Operators and consultants are on fire over the regions prospects, writes Martin Rushmere<\/p>\n","protected":false},"author":8,"featured_media":1881,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[],"sponsor":[],"class_list":["post-1880","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-north-america"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=1880"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1880\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media\/1881"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=1880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=1880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=1880"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=1880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}