Direct calls or a future of feedering for Buenos Aires?

terminal Feedering from Port of Montevideo could, possibly, replace direct calls at Buenos Aires

Buenos Aires may soon have a new $1.9 billion container terminal in Puerto Nuevo, but will this occur just as carriers stop direct calls and start feedering from Montevideo or Brazil, asks Rob Ward

Bigger and bigger vessels are starting to call on the East Coast of South America. The current maximum size of vessel calling at Puerto Nuevo (close to downtown Buenos Aires) and Exolgan, (six miles away at Dock Sud) measures just over 10,000 TEU (even with hefty draft restrictions), so logistics managers and route planners for major carriers are already lining up future strategies to possibly avoid direct calling at Buenos Aires.

Even with the proposed draft increase to 34.5 feet (10.5m) down from 32.5 feet, at Puerto Nuevo, many believe that the maximum draft for the facility with the optimum dredging,
would be about 12.0m and that would not be enough to accommodate the 14,000 TEU vessels that are now on the horizon and lining up to call ECSA. In addition to draft, the beam of vessels will also be a restricting factor for Puerto Nuevo.

Leandro Carelli Barreto, a director with the Solve Shipping consultancy in Sao Paulo, Brazil, said that Buenos Aires terminals has “pulled off miracles over the years” to be able to
accommodate larger vessels.

Indeed, Hamburg Sud originally achieved a competitive coup back in 2005 when it persuaded Exolgan at Dock Sul to widen and deepen the berth and turning circle to accommodate a shift from 5,000 TEU to 7,000 TEU ships, with Puerto Nuevo terminal managers subsequently equally astutesince then in maximising the restrictions of operating in a “downtown port scenario”.

“The question of when the carriers will start feedering into the River Plate has always been a difficult one,” Barreto explained to Port Strategy. “When I used to work with Hamburg
Sud [just over a decade ago] we used to carry out various simulations, but at the end of the day Buenos Aires attracts some significant volumes and we always found out it was
cheaper to continue calling direct to the port.”

However, the new logistical equations being carried out today are suggesting that a different outcome will lead to best practice for shippers and carriers in the future. Barreto, like many of the other experts focused on the ECSA region, believes that the imminent arrival of the 14,000 TEU vessels will be a game changer. It could then see the beginning of more feeder services from Santos or Sepetiba in Brazil.

Montevideo's draft is 11.5m which is 1.5m deeper than at Buenos Aires, so that might be an option for carriers. Neil Davidson, senior analyst for Ports and Shipping for Drewry’s Maritime Research, believes smaller vessels (12,000 TEU or less) will continue to call directly because of the size of the Buenos Aires conurbation (which comprises 16 million
consumers out of Argentina’s total of 45 million).

He says carriers have worked with the restrictions and found solutions because it is about the cargo and not the ships. If the cargo demand is there (and Buenos Aires is the second largest container port market in ECSA), then the desire to continue to make direct calls will remain, he feels, adding that Montevideo is a significant size market and the overall importance of the River Plate to the ECSA market is high (over 20% of ECSA port volumes).

Patricio Campbell, the president of ONE Argentina, says that Buenos Aires could “in certain circumstances” host bigger vessels than 12,000 TEU but it would need a lot of investment.

“It is possible, but instead of the 10.0m Puerto Nuevo has today, it will have to go to 14.0m and that will need the construction of completely new berthing substructure and that
will cost a lot of money,” said Campbell, who is also the president of the Centro de Navegacion in Argentina (which represents the shipping and port community of Buenos Aires).

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