Destination Latin America - Trans-loading East of Cristobal
Container ships exiting the Panama Canal either head into the Caribbean or make a sharp turn to starboard following the coast to load centers in Colombia, Venezuela and Trinidad. Ports along the upper coast of South America handle the bulk of “Hub and Spoke” traffic headed to neighboring countries as far south as Brazil.
While Colombia’s economy has suffered over the last few years (slowing from a rate of 6.6% in 2011 down to 3.1% last year), her wealth in exports of petroleum, metals, gems, coffee and bananas has maintained a solid trade of raw materials for finished goods. The port of Cartagena is the major conduit for the country’s import export traffic. It also serves as a trans-load point for markets in the Caribbean such as Aruba and the Windward Leeward Islands.
In preparation for the bigger ships, APM Terminals is spending $200 million on their Cartagena facility. Through joint venture with Compañia de Puertos Asociados S.A. (Compas S A) APMT will upgrade the facility and add state of the art handling equipment. The Colombian government will spend $60 million to deepen the main channel from 47 to 65 feet and widen its access up to 656 feet to accommodate vessels up to 14,000 TEUs. The port’s annual thru-put is 250,000 twenty foot containers.
Puerto Cabello, Venezuela
In the heyday of 4,500 TEU ships exiting the canal for South America, Puerto Cabello had been a niche trans-load port for the country and surrounding islands. In 2011 the Venezuelan state port operator Bolivariana de Puertos and China Harbor Engineering formed a joint agreement to spend $520 million on improvements at Puerto Cabello to handle vessels up to 70,000 dead weight tons. In spite of these improvements an extremely soft economy has put trans-loading at an all time low. In 2014 the joint Caribbean service operated by CMA CGM, Hapag-Lloyd and Cosco pulled out of Venezuela virtually killing any hope of regaining the once thriving trans-shipment market.
Trans-Loading in Trinidad and Tobago (T&T)
The two ports in the T &T Republic are Point Lisas and Port of Spain. Trans-shipment cargo makes up the majority of the containers coming off vessels calling these facilities. Recently the government conducted a Port Rationalization Study to determine how larger vessels will affect load centers in the region. The study concluded that T&T lies some 1,500 miles off the main trade lane into the Caribbean Basin. Furthermore it is unlikely that T&T’s ports could serve as a hub for U.S. bound cargo.
Port of Spain and Point Lisas currently handle Panamax class vessels capturing about 200,000 TEUs per year. At this time the government believes it can maintain its trans-load standing in the Eastern Caribbean and Northeastern Coast of South America without intensive capital expense. While there’s no immediate plan to expand as a contingency, the study outlines the potential for upgrades at Point Lisas or the creation of a new Super Post Panamax port at La Brea.
Brazil: a Country in Turmoil
Brazil has the second largest economy in the Western Hemisphere and the largest in Latin America. With abundant natural resources and a growing, well-educated middle class, the country has a potentially strong export market for its raw materials and a thirst for imported consumer goods. Plagued by three years of depression and political unrest, the Olympics should have been a shot in the arm for the country. Corruption and scandal at the highest level of government however has left Brazil fighting to reverse its downward spiral of economic decline. Logistically the countries poor infrastructure has also detracted from Brazil’s ability to deliver products for export or to distribute imported goods.
The economy while not healthy is not doomed either. A 35% increase in the Brazilian Stock Market this year may signal the upward trend needed to regain its place on the world’s economic stage.
Itapoa Port, a Light in the Forest
In the State of Santa Catarina lies the coastal city of Itapoa. Eight miles south and surrounded on three sides by lush rain forest, the Port of Itapoa is the newest gateway to Brazil. Completed in June of 2011, Itapoa was built with the new class of Panama Canal vessels in mind. The access channel is 1,102 feet at its widest point with a maximum operating draft of 41 feet at mean low water. Depth alongside the two 2,066 linear foot berths is 53.49 feet, ample room to handle two 14,000 TEUs ships simultaneously. Vessel operations are unique at Itapoa. The beauty and integrity of the shoreline is maintained as ships call at a quay separated from the terminal by a reinforced stringer. Containers are conveyed to the yard by truck after discharge from the ship. Six Super Post Panamax cranes perform loading and discharge. Expansion plans call for a wharf extension, which will create a third berth giving the Quay a total length of 4,101 linear feet. Six additional Super Post Panamax cranes will add the lift capacity needed to run an efficient Mega Ship operation. The current container yard of 11.36 acres will be expanded to 112.5 acres increasing Itapoa’s annual volume from 500,000 to 2 million TEUs. The Port of Itapoa truly is the brightest light in the Brazilian port chain.
A New Age Dawns In The Caribbean
With the introduction of larger ships there will be winners and losers in the quest for trans-load cargo. Ports that adapt to these changing trade lanes will continue to flourish, some even gaining a larger share of the container traffic. Port of Spain and Point Lisas will try to hang on, keeping their current volume unless port expansion is necessary. Cartagena with its proximity to Panama will vie for a lion’s share of trans-load tonnage in the hope of spurring Colombia’s sagging economy. New trade lanes perhaps through Jamaica and the Dominican Republic could develop to serve the upper Caribbean Basin or expanded port growth along our gulf coast. A revived economy in Brazil, traditionally our largest Latin trading partner, could also create new markets for U.S. capital.
And, what about Cuba?
As trade relations normalize, could we see the next round of port expansion at Santiago, Havana or Mariel?