Focus on ports: infrastructure, investment, transportation & inland logistics

The first two days of the TOC Connect #Americas event showed a broad spectrum of market context in the region and the state of development of the digital transformation and challenges ahead for a more technology-focused industry in Latin America. The middle of the week marks a shift in content away from analysis of data and towards the main playing field of the container logistics industry: ports. It’s all about infrastructure, investment, transportation & inland logistics.

Investment forum

Yes, forum. Because just one presentation is not enough to address the importance of developing the right infrastructure for ports, a forum is necessary to analyze the needs of port infrastructure in the different coastlines, the markets they serve, changing climate conditions

Johan-Paul Verschuure, Project Director, Rebel Group kicked off the panel with his presentation titled “Volatility-induced port investments on the horizon,” which shed light on the types of port investments and who is making those investments. “COVID-19 did not impact the level of investments in ports, however, the nature of investments changed to an increasing number of greenfield development and expansion projects driven by ultra-low interest rates portfolios. Disruptions indicate more redundancy in the logistic chains is needed. Project developers, logistics, and other industry players are becoming active investors. In North America very large port portfolios are attractive, as well as greenfield development proposed to improve supply chain quality. In South America governments pushed privatization and there is an overall new-found financial strength of major shipping lines is expected to change the landscape for port investment.”

The case study of the port of Paracas concession expansion project was next in the presentation delivered by César Rojas, Operations Manager, Terminal Portuario Paracas. “Port concessions allow the reduction in the logistics infrastructure gap without investments from the government,” the Paracas port executive noted, highlighting the 3-year project that increases depth from 12 meters to 14 meters, expanded the quay from 250 meters to 350 meters, and added 25 km of subterranean power lines, 408 reefer plugs, 2 Liebherr 550 MHC, and 1 Ecohopper 150 m3 to the terminal’s infrastructure and equipment. “Works continued through COVID-19 in 2020, and we never stopped operations or suffered congestion due to key planning and teamwork,” added Rojas to his presentation titled “Port concessions: emerging economies key factor on trade development.”

“Infrastructure Project for STI & challenges ahead,” was the third presentation in the panel delivered by Rodrigo Galleguillos, General Manager, San Antonio Terminal Internacional, who talked about Chile’s central-most port’s public-private partnership with state-owned Empresa Portuaria San Antonio EPSA to develop infrastructure on the privately-operated terminal. “The 5-year lease concession extension will allow for further infrastructure development which will increase the terminal’s capacity from 1.67m TEU to 2.07m TEU by 2030. Capex of US$46,5 million is considered for the project and includes a 4G LTE wireless network, OCR (Optical Character Recognition,) 18% increase in reefer plug, static and dynamic capacity increase, 2 STS, 2 eRTG, 26 terminal tractors, 6 reachstackers, and 8 bombcarts,” as detailed in the presentation. “Investment is necessary to avoid congestion, which is projected to continue at least until 1H22,” emphasized the STI executive.  

Alfredo Jurado, regional general manager LatAm & Corporate Affairs, Yilport Puerto Bolívar presented “Infrastructure and privatization of state ports Latin America & Caribbean region,” highlighting how privatization boosts investment, increases productivity, and drives development and expansion. “Among the benefits of privatization are the change of inefficient structures, the increase of the operator’s efficiency and the reduction in public expense,” noted the speaker, who ended his presentation on the challenges of concessions/ PPP in Latin America.

Last, but not least, Diogo Piloni, Ports & Waterways Secretary, Ministry of Infrastructure Brazil, spoke on “Partnership projects in Brazilian port sector,” highlighting the critical reforms over the last 5 years, such as new law on regulatory agencies; reforms on labor law, social security, ports, and tax law; new legal framework for sanitation and gas industries, and the positive trends in infrastructure development which has seen a considerable increase over the past years. Moderator for the session was Gordon Wilmsmeier, Kühne Professorial Chair in Logistics, Universidad de Los Andes & Professor for shipping & global logistics, Kühne Logistics University.

The challenges of transportation

The pandemic has put a strain on the supply chain, and to better enlighten the audience on the current challenges and successes around the world, 5 speakers joined to share their experiences and knowledge. The first presentation was “Adaptation of ports to the new maritime logistics situation: the case of Valenciaport,” by Antonio Torregrosa Maicas, Managing Director, Fundación Valenciaport. “Valenciaport is acting on 5 areas to meet the industry trends: net zero emissions plan with 2030 goal; climate change adaptation; intermodal corridors improving port-rail infrastructure, development of inland terminals and dry ports; infrastructure development of the new North Container Terminal; digitalization through the application of blockchain, automation, and other technologies.”

Ed McCarthy, COO, Georgia Ports Authority continued the panel, which was moderated by Rommel Troetsch, CEO & Founder, BFSearcher, and talked about “Connecting southeast USA through the Americas.” “The port of Savannah, in Georgia, is the third busiest port complex -behind LA/LB and New York-, it is the fastest-growing port and the 2^nd most connected port in the United States after New York.” On the container trade, connectivity to Latin America is directly from ECNA to ECSA and from ECNA to WCSA via the Panama Canal, while the port of Brunswick is also in the largest facilities in the Ro/Ro trade, with room to grow. “There is room for supply chain solutions, such as converting cargo from truck to rail; off-dock grounding locations; build more warehouses; speed container pick-up,” emphasized the speaker, who also noted the large projects underway for Georgia ports and the sizeable investments of up to US$5 million for the Mason Mega Rail, SHEP, and Ocean Terminal.

“Foreign investor outlook into Latam port infrastructure,” by Patricio Junior, Director, Terminal Investments, TiL marked the middle of the panel. “Infrastructure bottlenecks impact on production and distribution, affecting on ports’ competitiveness,” said Junior, who also highlighted that “Latin America and Caribbean terminals’ productivity is in line with the best terminals in the world.” He wrapped up by pointing out the most important conditions for heavy-asset investment: legal and regulatory certainty and economic stability & free-market conditions.

Ibai Erdozain, Principal ALG, continued with “The role of inland logistics in port competitiveness.” “For the time being, in the Latin America & Caribbean region there are still multiple situations where there is a mismatch between the maritime side and the inland logistics side, and this causes the region to have a higher logistics cost compared to Europe and US,” noted the executive in his presentation, noting that PPP is a successful model between private and public sectors to improve inland logistics market linked to the port sector.

Paul Ravenstijn, Managing Director Panama, Witteveenbos, finalized the last panel of the day with “Port city integration and connections.” “Layers of abstraction in port-city integration and connections consider networks, population and the natural basis. In many cases, the port is surrounded by and attached to the city, with little room to grow and expand hinterland connections,” mentioning the case of the Blankenburg connection to the port of Rotterdam, in The Netherlands, which added a new highway and tunnel combined and integrated with green areas, or the Oosterweel connection in Antwerp, Belgium, which also added a combination of highway and tunnel + green areas, showing just how important urban planning is for the integration of port and city. 

All content is streamed live and is later available on-demand on the exclusive platform for the TOC Connect #Americas event. For access, please write to [email protected].

By MundoMaritimo