CARRIERS HOLD THE KEY IN BA

It was announced last year by the Buenos Aires Port Authority, Administracion General de Puertos (AGP), that the BACTSSA (Hutchison Port Holdings) concession at Terminal 5 in Puerto Nuevo would not be extended beyond its May 15, 2021 deadline.

Consequently, the powerful trade unions representing the 600 dockers working there have been staging regular strikes, picketing and working slowly with union leaders demanding that all jobs be preserved even after the closure. The action is still ongoing.

After the grandiose US$1.9 billion plans to re-configure and expand Puerto Nuevo collapsed back in March 2020 (Port Strategy April 2020, Musical chairs in BA) AGP deemed that only two terminals were required to handle the volumes through the port, which have been declining or (at best) stagnating for over a decade. The total in 2019 was 920,000TEU, with 2020 expected to be lower still.

Terminales Rio de la Plata (TRP), operated by DP World, plus AP Moller’s Terminal 4 had been given the approval to continue, at least for another year, as BACTSSA was to be closed.

GOODWILL AND PEACE OVER CHRISTMAS

Goodwill and peace seemed to break out over Christmas when José Beni, the head of the AGP, persuaded the owners of the two remaining terminals to take on all the dock labour from BACTSSA.

However, the solution to keeping containerised cargo moving in Buenos Aires may not be in the hands of the stevedore unions, the authorities or even the terminal operating companies, but instead fully down to three ocean carriers.

One major snag with the deal drawn up by the AGP with the BACTSSA stevedores is that it is a remedy that only works if the ESA 1 weekly service to the Far East, operated by Evergreen, Cosco Shipping and CMA CGM, stays in Puerto Nuevo.

These carriers have choices to make. Switch ESA 1 to Exolgan (the Dock Sul facility 15km from downtown Puerto Nuevo, which is owned and operated by Terminal Investment Limited, which is part of MSC, along with partners PSA of Singapore) and already has 43 percent of the BA container market, or go to TecPlata (an out-of-town terminal operated by ICTSI in La Plata) or, thirdly, cancel all direct calls to Argentina and transship from either Montevideo, in Uruguay, or Rio Grande, in Brazil.

Management at TecPlata has made it clear that if ESA 1 switches to its facility, which has struggled to attract cargo since opening and currently has just one regular call, stevedores will be given exactly the same wages and conditions currently held at BACTSSA.

“CATCH 22”

However, the problem is that many dockers do not want the extra commuting time to TecPlata. There is also a “Catch 22” situation because TecPlata needs to spend US$5 million to dredge down to 34 feet, to incorporate larger ESA 1 vessels, but it is not prepared to do so unless it gets a written commitment from the carriers.

Since April 2019, TecPlata has received regular calls from Brazilian coastal carrier, Log-In Logistica and from October 2020 Evergreen have been transshipping boxes to TecPlata from the main Far East ports, using this service. Consequently, the La Plata terminal operator hopes that the Taiwanese carrier will persuade its ESA 1 partners to eventually migrate south of Puerto Nuevo.

SAVING STEVEDORE JOBS

Patrick Campbell, vice-president of Centro de Navegacion, which represents the interests of various shipping groups in Argentina, said that the stevedores’ jobs will be saved if the lines stay in Puerto Nuevo, at least in the short term.

“With all the strikes and problems in Argentina with the economy in recession and rampant inflation (it is running at 37 per cent at the end of February 2021 but was above 40 per cent throughout most of 2020), we cannot say for sure if ESA 1 will stay here for the long term,” Campbell told Port Strategy. “The carriers could go to Exolgan or TecPlata or even find another alternative but we hope they will stay at TRP or Terminal 4.”

He explains further. “I think that there is enough space in the Puerto Nuevo terminals and it makes no sense to keep going with a long strike to keep BACTSSA open. There are no volume increases coming in the short term to keep a third terminal working when the volumes can easily be handled by two, as long as they take on the stevedores and the carriers continue calling there.”

A shipping agent based in Buenos Aries offered his view. “I believe that as long as there are no more strikes between now and May, the carriers will stay in Puerto Nuevo, probably at TRP, but if there are more strikes they might go elsewhere.”