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Issue #592

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2014 Media Kit

Meeting the challenges of NAFTA

By: | at 07:00 PM | International Trade  

Despite the continued low rates, economic disruptions and shifting alliance partnerships which have characterized the marine transport industry over the past several years, Hamburg S’d has taken aggressive steps over the last 24 months to achieve service leadership between Latin America and both Europe and North America.

Speaking to attendees at a recent conference on Cross-Border Trade and Logistics in Los Angeles, Columbus Line Western Area Vice President Geoff Greenwood outlined the parent company’s growth steps:

’ The 1998 purchase of Brazilian-flag carrier Alianca.

’ Last year’s purchase by Alianca of the Europe-South America routes of Transroll.

’ The just completed purchase of the South American trade routes of Crowley American Transport.

At the same time, Greenwood noted, Columbus Line has strengthened existing services linking both coasts of North and South America and has added new trade offerings:

’ Between East Coast North America and West Coast South America

’ Between the US Gulf and Mexico, the Caribbean, Central America and East Coast South America.

However, Greenwood told his audience, expanding services in the Latin American market still involves significant challenges - some of them generic to the current pressures facing the marine transport and intermodal logistics industry, and some specific to the region, its economy and its evolution.

Continued downward rate pressures—a factor on virtually all of the world’s major trade routes—have been the driving force behind the industry’s trend to consolidation and rationalization of services through alliances and discussion agreements. These alliances have allowed carriers to reduce or spread their risks and operating costs. But operating within multi-carrier alliances presents its own hurdles in trying to meet customer needs for frequent and reliable sailings, rapid and accurate documentation, ready availability of reliable equipment, rapid cargo tracking, and maintaining a knowledgeable and experienced staff.

With more partners and philosophies of practice, decision making is more complex and takes longer.

Technologies and standards have to be smoothly integrated.

Staff training on those systems and on new services becomes nearly continuous.

Changes in alliances often result in changes in port calls and alliances with new port and terminal operators.

Coordination of equipment inventories becomes even more crucial…and more complex.

Operating in the Latin American arena involves a market-specific set of challenges as well, Greenwood went on to explain.

As with many North-South trades, volumes of refrigerated cargoes are significantly larger, requiring greater capital investments in specialized equipment.

North-South trades, including many in Latin America, face constant problems with equipment imbalances which add significantly to operating costs.

While many Latin American ports…especially those in Brazil, Argentina and Mexico, are making major strides in privatization and modernization, a significant number still lack adequate shoreside facilities. That is why carriers must use vessels equipped with on-board cranes to move or assist in the movement of cargoes in those ports. In addition, some ports in Latin America are still wrestling with over-manning of shoreside labor crews which makes them more expensive and less efficient.

Finally, he noted, the kinds of intermodal road and rail services we take for granted in North America are just beginning to evolve in most Latin American countries. For countries like Brazil, with vast interior spaces and large concentrations of population and production near the coastline, long-term opportunities exist for increased cabotage trade and for the establishment of hub and feeder services within the region.

“With over 5,200 port calls per year in South America alone, Hamburg S’d and its member lines Columbus Line, Crowley American Transport and Alianca have clearly assumed the leadership in services throughout Latin America,” Greenw