More than 300 attendees, including industry leaders and suppliers from around the world, attended the industry-leading event that has become a fixture on the industry agenda.
exhibitions on The situation of the shipping and port business, new technologies and ways to better manage processes were the highlights of the meeting., in addition to the network of contacts that usually take place at these events, to which is added the entertaining social agenda. How to generate more efficiency in the processes, go beyond Smart Ports, to "intelligent cargo" -with merchandise that carries a chip inside the container with all the information-, think from the ports about adding value to the cargo through technology, scanners, big data or the construction of intelligent logistics centers, were the repeated concepts. Among other things, ports that facilitate trade are coming, very focused and building customer loyalty. It was said there that ports must leave their comfort zone and be competitive by contributing to the cost structure of the client and to regional economies, and not just thinking about lowering rates.
Opening the meeting, Kurt Nagle, president and CEO of AAPA, stressed that beyond the trends in the shipping and port sector - such as the alliances of container lines, which go through the terminals or the consequences of the expansion of the Panama Canal - there are changes taking place at the political level that also lead to potential new conflicts that will impact port activity. In this regard, He stressed that the tools offered by AAPA, from management training courses to networking and work on specific committees with various initiatives, make it possible to face these new times of uncertainty in the industry.
Victor Rossi, Minister of Transport and Public Works of Uruguay, opened the meeting and presented the 2018/2035 master plan for the port system of that country, which prioritizes environmental care, connectivity and access, both with the Central Railway project and the circulation of trucks, as well as on the nautical side, aiming for a 14-meter access channel by 2030. Infrastructure developments are also coming, such as a dock for forestry, fishing, logistics space, a dry port in Rivera, a new area for naval repairs, equipment, etc. In addition, the aim is to continue working on alternatives for the deep-water port and to advance in the digitalization of processes. In addition, he pointed out that 25 years after the totally successful port law, the system must be perfected by seeking new opportunities to consolidate Uruguay as a logistics node in the region.
Regarding the issue of globalization versus protectionism, the theme of the meeting, the president of the National Port Administration of Uruguay, Alberto Diaz Acosta, He pointed out that there is always the temptation to face the opening with restrictions, protectionism has repercussions on ports, on schemes such as cargo reservation and on the protection of cabotage and He pointed out that the public sector must act to prevent monopolistic actions, maintaining the balance. “Ports depend on port policy, which should aim to benefit the general interest, which does not always go hand in hand with the interests of the private sector, and the reality is that the latter seeks to have fewer players in a growing market. This tendency towards monopoly is defended by regulating activities well. But there is no single answer. In general, the private sector thinks that the less regulation we have, the better, but everything must be in its proper balance,” he said.
Robert West, from the DUAGA consultancy, He gave an overview of the situation of international trade and its impact on the industry, such as the fall of the TPP, the initiative can be taken by the countries of the Latin American Pacific Alliance to renegotiate and rebuild it. As for the growing regions, he pointed out the improvement of the global GDP but slow in China and the USA, scarce in Europe, weak for Argentina and Brazil and mentioned the Venezuelan case - today its economy is 1 of what it was four years ago. Finally, he again expressed his defense of globalization, "it never went backwards or stopped, it is a long-term trend," warned West, but the growth of container movement is less than that of the real GDP. Given the good numbers of the large container shipping companies, the largest decide to continue adding ships of enormous capacity. "They do not learn the lesson," he said. For example, Chinese operators added more capacity in the terminals than the trade growth is expected.
China is investing more and more in the region and within a decade it will equal US investments, but its influence will not make any country in the region grow, he said. The case of Venezuela is an example.West sees Latin American trade with the rest of the world growing, and U.S. policy will lead the region to generate initiatives to become less dependent on the large country to the north, which is positive.
For the United Nations specialist, Ricardo Sanchezz, Globalization is part of capitalism. The Chinese president himself talks about following the signals of the market and not that capitalism should cease to exist, so there is really no controversy between globalization and protectionism;Yes, we are in the midst of a significant political and economic change for the future. There is no threat to the global economy, but rather a shift of power towards the East. "Given the increase in the purchasing power of the middle class in the East, there is an opportunity for Latin America," he explained.
He gave the figures on the expansion of the large shipping companies. In 10 years they have gone from 54% to 64% of the market, and the participation of the shipping companies in port terminals has also increased compared to pure operators. “Today the great challenge is to defend the competition that is threatened by concentration. The vertical integration of specialized terminals absorbed by shipping companies is an extremely worrying process and requires urgent action, because it is related to a threat to the future of ports.“This affects the sector because investment life cycles are shorter today; thus, progress must be made in terms of labour quality, in the relationship with the city – which has been improving in recent years – automation or semi-automation. “The owner of the cargo is not present in these discussions and this is a mistake, because all that is wanted to advance in logistics is to improve the conditions of the cargo,” warned Sánchez. It was also said that progress must be made in free trade agreements, better access to India, given that in the near future it will have more consumers than China. With the large new ships with 400 meters of length and 58 meters of width, should we continue investing in cranes with 23 lines of reach or look for innovation and work with what exists today and thus improve the life of the shipper and the final consumer of the products?
For its part, Carlos Urriola, vice president of Manzanillo International Terminal in Panama, insists that the shipping business is cyclical. For some time now, ships have been asking for more dredging and more docks, but there are other ways to achieve efficiency, such as reviewing flows, seeking to reduce the length of time ships spend in ports, targeting systems used by airlines, especially by exchanging more data. At the same time, there is the complicated issue of shipping lines having more of their own terminals, but at the same time there is a much greater capacity than the cargo supply, as is the case on the Lázaro Cárdenas/Callao stretch, which is twice as much as needed. He acknowledged that it is an industry that finds it difficult to change, Will millennials have to be the ones to face the changes? “In this business everyone makes a lot of mistakes. Suddenly a great capacity is created and the big lines want to have 20.000 TEU ships and the economy does not grow,” he said. Another key element: the lines are optimizing -read reducing- the calls and, in addition, some go through the entire chain. At the same time, he warned that no matter how much automation comes, there is always a person behind a computer, the case of the blackout in Maersk systems is an example. Finally, he pointed out that beyond the incorporation of technology, more must be invested in the training of the human resources that have to handle it. Automation will make a social problem inevitable.
John Benedetti, commercial manager of the Regional Port Authority of Cartagena, warned about the current situation of the sector at a global level, where the port that cannot receive large ships will be left out. The large lines want everything, they seek to save but want to pay little, but the ships came first and whoever does not see it is in another league. But be careful, he warned that there are many infrastructures that have not seen a single container. In addition, he urged to be careful about granting concessions for everything without much sense. Today Maersk offers a comprehensive system and becomes a sort of “Uber of transport”. On the other hand, we have to wait and see what will happen with the big e-commerce companies that are involved in the entire chain.. Today, the one who controls the information is increasingly more important than the one who has the assets, he said.
Oscar Bazan, Executive Vice President of Planning and Business Development for the Panama Canal, said that the forecasts regarding the expansion of the waterway have been met. In the region, 27% of the cargo that passes through is Chilean, 28% from Peru and 31% from Ecuador, and more than containers, the LNG sector has grown, where much focus is being placed. He warned about the process of “cannibalization” in the container shipping businessres.
Let's look at three concepts from the president of the Arica Port Company, Francisco González: The real enemy is concentration, regulating free competition is confused with protectionism and finally, the Chilean port model needs to be changed.
Yurik Diaz, Port Terminals Division Manager of SAAM of Chile –strong in terminals and tugboats in the region- He also expressed his concern about the concentration of shipping, an industry that has been in the red for many years and now seems to be recovering a little. “There is a great demand on port structures but at the same time an oversupply is created when it is not necessary,” he said.
Faced with this advance of the large shipping companies and a certain fear that concentration goes precisely against logistics throughout the chain; the director for the East Coast of South America of Maersk, Antonio Domínguez, stressed that the company's actions are in favor of the system. "Maersk has the courage of a leader, because from the position of the largest container line in the world, which it has held since the mid-90s, it is a company that never stops reinventing itself.“A key moment for the company was when it recently decided to divide the group into transport and logistics and energy, sending a clear message to the industry of its commitment to global trade and working towards this goal by aiming for new solutions. “It must be taken into account that in times when trade levels are not good, shipping companies help and, for example, allow cargo to be transported in small volumes to new markets,” he said. He added that the countries on the East Coast of South America contribute a lot to the growth of the global economy. He said that “although trade fell in 2016, container movement remained at the same level.” He also pointed out that the global economy depends on shipping companies; he gave some figures: some 10 million tons in ships or 90.000 units operating, 10 thousand weekly calls to ports around the world, five top lines have 58% of the total fleet…
Dominguez notes that Maersk sees the long term as very positive, especially on the East Coast of South America where there is much to do, for example, in dredging access to ports.
For its part, Patrick Verhoeven, Director General of Policy and Strategy at the Belgium-based International Association of Ports and Harbors (IAPH), It set trends such as the need to be attentive to new global trade alliance schemes -the US, UK, Vietnam and Japan axis-, the search for sustainable development in ports, the review of processes, more incorporation of IT -if a Smart Port is sought- and the possibility of facing port alliances seeking new businesses.
Paul Gallie, head of Americas for Portek and port developments for Mitsui de México, He spoke about different types of cargo and about infrastructure in developing countries.. In many of them, from Lithuania to African countries, instead of big data, they are still at the “small data” stage, meaning that IT solutions must be sought to resolve basic situations. He warned that in primary products such as some fruits, the difference in reaching a market can be made by a more competitive port. And there, it is necessary to get more out of what exists, for example, where certain solutions allow for much better use of space.
When talking about waterways in South America, Rafael Farromeque from CAF, He highlighted the work being carried out in this area, aimed at a logistics waterway system, not just a mode of transport. In this sense, within the CAF scope there are 47 projects worth more than US$8 billion in 4 of 10 basins and geographic regions. For example, US$4 billion in the Magdalena River in Colombia with 16 projects and US$2.5 billion in 11 projects in the Paraná/Paraguay, among others. “It is not explained why the project to finance the US$110 million dredging in this last basin is not moving forward,” he said. Thus, CAF is aiming for a river logistics agenda.
Precisely in an aside, Ricardo Sanchez He noted that after a thorough study it was concluded that An additional 1 foot across the waterway would result in a 6% expansion of agricultural production.% or US$1895 million per year.
For its part, Juan Carlos Munoz Menna of CAFyM of Paraguay, warned about connectivity problems for the outflow of production from the central region of South America, especially the obstacles to navigating the waterwayl, with restrictions that in many cases are not justified. Regarding the institutional aspect, he points out that the rules that were agreed 25 years ago are not applied. “Although there has been progress in recent times, the restrictions speak very poorly of integration. In the soybean region of Brazil there are more than 50 million tons of soybeans and there is talk of tripling production by 2030. Here we need a comprehensive vision of the countries, because these restrictions take away much-needed work,” he said.
These are Some of the conclusions and perspectives which were revealed during the last edition of the Latin American Ports Congress.
Next year, the meeting will be held in the Chilean city of Valparaíso, “the Jewel of the Pacific” is preparing to host the 107th Annual AAPA Convention, the Association’s continental event that brings together members of the port community of the hemisphere, from Alaska to Tierra del Fuego, and which for the first time will be held in South America.
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