Latinports Newsletter January-April 2012


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Latinports Newsletter January-April 2012

  1. 1. January-April 2012Year 4, No. 1Latinports Mobile:A New ToolBrazil, Sixth Economy of the World andMexico After Seventh Place;Chile, Peru and Colombia: EmergingEconomies in the RegionWill Latin America be the leader ofthe Recovery of World Economy?See more... See more... See more...
  2. 2. CONTENTSJanuaryApril2012Upcoming EventsLatinAmerican Port NewsMailShall LatinAmerica be the leader of theRecovery of World Economy?China’s footprint in LatinAmerica: Help or Threat?Constitutive Treaty of theAlliance of the Pacific:Mexico, Colombia, Peru and ChileWorld Shipping Crisis: Hamburg Süd UnifiesServices in SouthAmerica with MSC andMaersk Increases FreightsEmpresa Portuaria Nacional de Nicaragua,APMTerminals Moín of Costa Rica and PortMagdalenaof Colombia Enter LatinportsBrazil, Sixth World Economy, and Mexico afterSeventh Position;Chile, Peru and Colombia: EmergingEconomies in the RegionObituary: Paul Richard Klien, Sep.30.1914 –Mar.06.2012Latinports Mobile:ANew ToolEditorialCoverLatinports Mobile in iPad,designed by MiroamarilloStudio of Canada.DesignJulian Pinedawww.miroamarillo.comstudio@miroamarillo.comConference of the Executive Director of Latinportsat theAndean & CentralAmerican InfrastructureSummit in Bogotá
  3. 3. January-April 2012S EditorialIt is with the deepest regret that we register the death last March 6, of theillustrious Brazilian businessman by adoption, Paul Richard Klien, at theage of 96, father of the chairman of our executive committee, RichardKlien. His legacy shall be an example for the present and future generations,precisely when Brazil, country in which he greatly believed, has now reachedthe place as the sixth economy of the world, displacing Great Britain, as wasreleased by coincidence the same day of his departure, by the London-basedCenter for Economics and Business Research (CEBR).As a memorial tribute to Paul Richard Klien, we highlight in this issue thesurprising recovery of Brazil and Latin America, in general, and the greatperspectives of the region, as recognized by organizations as important asthe World Trade Organization, the World Economic Forum, the WorldBank, the International Monetary Fund, the Inter-American DevelopmentBank, the Economic Commission for Latin America and the Caribbean –ECLAC, and the Latin American-Asia Pacific Investment Forum, as well aswell-known private entities specialized in regional and global level marketssuch as Business News Americas, Goldman Sachs, Bulltick Capital Marketsand Bloomberg Markets Magazine, and prestigious economic magazines asTime, among others. This, despite little planning and even yet the still scarcegovernment support to the private sector in many cases, has been seen asone of the principal barriers for the development of infrastructure initiatives,where ports and internal transportation logistics have to play a major role.This is the time of Latin America and we must know how to take advantageof this. Living up with what happens in the region and disclosing it to theworld, we are pleased in this issue to present Latinports Mobile (motif of ourcover), a development of Miroamarillo Studio of Canada, through which theassociation wishes to offer the port community all information possible onour sector and the activities related to Latin America. Through this state-of-the-art technology, web applications and a new webpage, Latinports pretendsto involve the port sector in general by providing updated information in themost practical way possible, being able to consult in mobile devices (iPhone,iPad, etc.) permanently updated information. In this way, Latinports becomesthe only port association worldwide offering this service.Until the next!jpalacio@latinports.orgwww.latinports.orgJulian PalacioExecutive Director
  4. 4. January-April 2012OBITUARY: PAUL RICHARD KLIEN30.09.1914 - 06.03.2012Paul Richard, father of the President of the Executive Committee of Latinports Richard Klien,Believed in the immortality of the soul.He hoped that, in the transition, we did not let sadness invade ourhearts!He asked that in the cremation ceremony, occurred only among his relatives,Was read the poem LIFE of his friend Gilbert Carpenter.I do not die.,I only pass the portal of a new and brighter view,A broader, sweeter vision of eternity,Beyond earth´s sorrows, pain and fear.,So do not grieve for me but let me go,And make your last farewell, joy for my joy.I only wake to see my dearest wish fulfilled---The blessed good revealed. I´ll wait your coming;Do not haste to leave your tasks till done,Send from your life the perfume of good deedsInto a world of sin and selfishness.Then, when you reach that last great foe called death—That last obstruction to be overcome—You´ll meet it with a courage high and true;Backed by your faith in God, your trust and love.,Then, as the mist before the sun melts and is gone;That great deceiver, death—which only hidesFrom timid hearts God´s heaven here and now—Will also melt away, and you will findMy love, your joy—an endless heaven divine.
  5. 5. January-April 2012By means of this leading technology, ispleased to present its new webpage, designed by thespecialized company Miroamarillo of Canada, www.miroamarillo.comCompatible with our mobile devices, the newpage, pioneer of the organized port environmentworldwide, is designed to provide to all its usersupdated information on the port industry of theregion, and the most remarkable global issues.All these advantages are at your disposal in threelanguages (Spanish, Portuguese and English) andmay be seen in your iPad by only connecting to theInternet.As we are aware that technology continues toadvance, our following step shall be to provideas soon as possible this same information onyour mobile phones (iPhone, Android, Samsung,Blackberry). Our objective is that the communitymay participate more actively in the course oftheir activity and may centralize in the future allinformation in a blog, with forums, discussiongroups and virtual business tables, for associates tobenefit the most of the leading technology we offer.You may find the following information in the newpage:-Special reports with the most recognized figures ofthe port industry.-Short news on the industry and other news relatedto Latinports.-A list of recent and future events with links to themost representative lectures to keep you updated.-List of Latinports members including basic dataand physical location, and a link with detailedinformation to refer you to the company of yourinterest.-Contact list and information on Latin Americanport authorities.-Historical relation of our informative bulletins,which may be consulted directly.-And more….Your participation and comments will be essentialfor this project in order to continue growing andoffering more and better updated information.Welcome to this new era.LATINPORTS MOBILE:ANEW TOOL
  6. 6. January-April 2012According to emol.economia, which at the beginningof March published its last data on economicgrowth, states that Brazil has officially become thesixth economy of the world, relegating the UnitedKingdom to the seventh place, as was officiallyconfirmed by the Center for Economics andBusiness Research (CEBR). The London-basedCEBR predicted last December upon publication ofthe annual table of countries according to the size oftheir economies, that Brazil would unseat the UnitedKingdom regarding volume of its Gross DomesticProduct (GDP), which has now been confirmed.“According to figures given and informed todayand applying current prices and a medium rate ofexchange, Brazil is confirmed as the sixth economyand the United Kingdom moves to the seventhplace”, was declared to EFE by Tim Ohlenburg,chief economist of this center, which is nowpreparing its next table to publish in a few monthstime.According to the CEBR list of December, whichmust now be updated with the data of each countryin relation to 2011, Brazil would come after theUnited States, China, Japan, Germany and France, inthat order. The Government of Brazil informed thatBrazilian economy grew 2.7% in 2011, generating atotal GDP of US$2,469 billions. This amount maybe compared to the British GDP of 2011, codedin US$2,42 billions. “this is a natural movement asBrazil has a considerable population, large naturalresources and a strong industry; it is a countrydestined to continue growing”, stated Ohlenburg.Despite the growth of Brazil in 2011, it was muchlower than that entered previous year of 7.5%,which reflects an increase in costs and lack ofcompetitiveness of some sectors of the Brazilianeconomy. On the other hand, the British economy,weakened as of the credit crisis of 2008, continuesslowing down as a result of the public expense cutsapplied by the Government to reduce deficit and bythe impact of the sovereign debt crisis in the eurozone. In 2011, the British Gross Domestic Productonly grew 0.8%, although the last quarter showed acontraction of 0.2%.BRAZIL, SIXTH ECONOMY OF THE WORLDAND MEXICOAFTER THE SEVENTH PLACE;CHILE, PERUAND COLOMBIA:EMERGING ECONOMIES IN THE REGION
  7. 7. January-April 2012Mexico will be the Seventh Highest Economyof the World in 2020: Goldman & SachsMexico will become the seventh largest economyof the world in 2020 and will contribute 7.8% tothe global Gross Domestic Product, higher thanRussia and India, was affirmed by the Director ofInvestment Funds of Goldman Sachs, Jim O’Neill,at a meeting with British investors, in accordancewith the report of CNN Expansion, and inreference to the business forum ‘Mexico Week’ heldin London last 12 March.The creator of the BRIC (Brazil, Russia, India andChina) economy concept affirmed why Mexico wasnot included in this block of emerging countries adecade ago, and it is because it was not growing atthe rhythm of China or Brazil. “During the last tenyears the BRIC economies have contributed onethird to the growth of the global Gross DomesticProduct and represent one fourth of worldeconomy”, according to Goldman Sachs, but theattention is changing towards the growth markets.The executive states this year Mexico will grow3.6%, at the same rhythm as Brazil, and in 2013 itseconomy is expected to grow 3.8%.In the forum organized by the Mexican Chamberof Commerce in Great Britain and its counterpartin Mexico, was said that China will continuecontributing half of the world Gross DomesticProduct in the next decade, but there are eightmore countries –including Mexico– that willcontribute to global growth. He explained there are15 variables to measure growth, among which arethe laws, corruption, political stability, fiscal deficit,education, investment, Internet, mobile phones,computers and economic opening, among others.However, he recognized that Mexico must continuepromoting reforms to the energetic sector as thereis “a perception that the way in which oil has beenused has not been so beneficial” for the country.Regarding insecurity matters, O’Neill stated thatMexico must work to improve its image as thetendency is “to attract attention implying that (crimeand insecurity) are dominating every aspect ofeveryday life”.On February 16, the National Statistics andGeographic Institute (INEGI, in Spanish) informedthat the Mexican economy grew 3.9% during 2011, afigure lower to the increase of 5.5% entered in 2010.The 3.9% rate is lower since Mexico came out of adeep recession in mid 2009, and was thus affectedby a consumer deceleration and a fall of agriculturalactivity.
  8. 8. January-April 2012Peru and Chile are considered the third and fourthemerging economies with the greatest projectionworldwide, after China and Thailand, according toa ranking prepared by the magazine BloombergMarkets, was informed by Gestión (Management).Peru has grown an average of 5.7% per year duringthe last decade, and will benefit of an increase inconsumer expense in South America, stated theexecutive president of the American companySan Mateo, Mark Mobius, according to SemanaEconómica.The leader of the ranking of the most promisingemerging markets was China, followed by Thailand,which attracts investors with its agricultural wealthand labor workforce. The document was preparedbased on investment factors, growth forecasts of theGross Domestic Product (GDP) and the facility tomake business in these nations.Today the world is understanding that Colombia isone of the most dynamic democracies, also with avery dynamic economy, stated President Juan ManuelSantos to Time, publication that qualified him as theLatin American leader to follow and the country hedirects as a model. During his presidency, Santoshas tried to position Colombia as a key internationalplayer and as a regional leader, and the cover of Timemagazine becomes a further step in that direction.The publication inquires if Santos is the new leaderof the region, as upon Lula da Silva leaving powerthere seems not to be any other Latin Americanleader that is occupying this role as is being done bythe Colombian President (however, Time states thatDilma Rousseff may also assume that position).Peru and Chile Among the Most PromisingEmerging EconomiesPresident of Colombia, Cover of Time in April:
  9. 9. January-April 2012Mayo - Agosto 2011
  10. 10. January-April 2012This entire optimistic panorama has causedColombia to be internationally perceived as anemerging high level economy, according to a studyof the Center of Economic Studies of the NationalAssociation of Colombian Entrepreneurs (ANDI,in Spanish), published in the January-Februarymagazine of the association. The study says thatduring the last years in Colombia important changeshave occurred in economic, political and social issues,changes the country may show with conclusivefigures:In the last ten years, the country moved from aGDP of less than US$100,000 million to almostUS$335,000 millions; the GDP per capita increasedfrom US$2,000 million to more than US$7,000million; foreign trade increased fourfold reachingfigures that this year will be more than US$110,000million; Direct Foreign Investment increasedfrom US$1,800 million to levels at present closeto US$14,000 million; and the macroeconomicenvironment is characterized by indicators close tointernational parameters.Some examples showing this situation are:recognition of international markets as a relativelylow-risk economy, which resulted in the recoveryof the investment grade of the three great riskrating companies, after having lost it for more thana decade; its position within the region with Brazil,Chile, Peru and Mexico as a leading economy; andclassification of the country in the group CIVETS(Colombia, Indonesia, Vietnam, Egypt, Turkey andSouth Africa), the group of emerging countrieswith the best recent performance and the bestperspectives in the years to come.Based on statistics of the World Trade Organizationfor the 70 economies representing 90% of worldtrade, exports increased almost 20% between Januaryand October 2011, compared to the same periodof previous year, worth mentioning the growths ofIndia (50%) and Colombia (42%).
  11. 11. January-April 2012WILL LATINAMERICABE THE LEADER OF THERECOVERY OF WORLD ECONOMY?Latin America Surprises the World: IDB“Since the last Summit of the Americas held almostthree years ago in Trinidad and Tobago, LatinAmerica has surprised the world because of itsrapid upturn after the global recession”, wrote thepresident of the Inter-American Development Bank– IDB, in newspaper El Tiempo, on the occasionof the Summit of the Americas that was beingheld in Cartagena in mid-April, with the attendanceof almost all the presidents of the continent. Hecontinues saying: “We have not only grown morethan industrialized countries but have also reducedpoverty to a historical minimum. Today we are,altogether with Asia, a motor of world economicrecovery. Beyond high prices and sustained demandof our principal exports of commodities, the goodperformance of our countries is also the result oftwo decades of difficult reforms and a cautiousmacroeconomic management. Therefore, LatinAmerica is seen as a region with an extraordinaryperspective of progress”.The president of the IDB also wrote that “if ourrecent economic average growth is maintained, inless than one generation we will have a middle classof 500 million persons, equal to today’s EuropeanUnion population”, adding that “whoever wants toposition in this market must start today to preparetheir strategic plans” but that “our government maynot face by themselves popular demands withoutrisking fiscal discipline” and for this reason “theprivate sector must be part of the response, enteringalliances with the public sector”.Luis Alberto Moreno, President of IDBInter-AmericanDevelopment Bank
  12. 12. January-April 2012IMF: Latin American Outlook is PromisingLatin America continues its path of sustainedeconomic growth, but the authorities of theregion have an ever more difficult task to preventoverheating and overcome the effects of theEuropean crisis, stated the International MonetaryFund – IMF in mid-April, quoted by Reuters.The IMF projection for Latin America will grow3.7 percent this year and 4.1 percent in 2013, figuresrepresenting a slight increase compared to Januaryestimates, that showed expansions of 3.6 and 3.9percent for those years. The region would expandto rates doubling those foreseen by developedeconomies, even in case of a moderate growth inthe rhythm of 4.5 percent seen in 2011, according toestimates of the IMF. These projections show thatthe region has been capable of navigating throughrisk among waves of aversion as a result of theEuropean crisis and the strong flow of capitals thatput pressure on their currencies. “This combinationof policies and resistance facing the fluctuations inglobal confidence make this outlook promising”, saidthe Fund in its Global Economic Outlook.However, the institution said that sharp turns infinancial markets are complicating the work ofauthorities that must “remain alert to possiblenegative currents from Europe and the increasingcurrents of capital flows”.Shortly before, in February, experts of the 2ndForum of Investors of Latin America and Asia-Pacific highlighted in Hong Kong that “economicdiversification and rapid growth of the middleclass in Latin America drove development withoutdepending on external economies”. This event wasattended by directors of Latin American and Asianinvestment companies to establish businesses, asinformed by the agency EFE. Brazil, followed byChile and Colombia, is leader of this economicdevelopment that will accelerate as of the secondsemester of 2012, experts predict.On the other hand, according to the executivedirector of emerging markets of CIBC WorldMarkets, John Welch, Latin America is perfectlypositioned for the next 10 years as a result of itsgood macroeconomic policies and a considerablegrowth of the middle class. We are at a part of thecycle where internal demand is more importantthan external demand, which allows being moreindependent of external flows, explained Welch.Diversification of its industries has enabled LatinAmerica to better survive the economic crisis andtake advantage of the global economic slowdown byincreasing its exports, explained lecturers during thefirst session of this Latin-Asian forum. However, thelow savings index of Latin countries is yet one of theoutstanding accounts of the region, stated Welch.
  13. 13. January-April 2012For the World Economic Forum, Latin Americais an Oasis of StabilityThe Region has Many Strengths but is notImmune: World BankLatin America was identified as an “oasis” ofstability, growth and opportunities during the WorldEconomic Forum in Davos (Switzerland), comparedto the general uncertainty because of the financialand economic crisis faced by Europe and theUnited States. Unlike previous years, investors andbusinessmen today look first to emerging countriesthan to great world powers. Proof of this is that inthe gathering of the most important and powerfulat Davos, Latin America stood out as an investmentmagnet and a business center.From the perspective of Lars Moller, World Bankeconomist consulted by, the truth isthat the region has many strengths to face externalshocks, but worth mentioning is that the region isnot immune to a possible global economic crisis andits heterogeneity must be taken into account. Thefollowing is the explanation:During the last decade, the Latin American andCaribbean – LAC – regions have been improvingits immunologic system, which has made theregion much more resistant to external shocksthan in the past. This was the legacy of a silentrevolution in macro-financial policies, in particularthe monetary policy, but also the financial and fiscalsupervision policies. These measures caused thetraditional factors of external amplifying shocks(currencies, weak fiscal processes and/or fragilebanking systems) to absorb shocks through flexibleand credible currencies, solid public finance and acapitalized banking system with liquidity. All this asa whole with a decrease in currency mismatches,and thanks to the integration with safer internationalfinancial markets, has enabled the region to developmonetary, fiscal and credit counter-cyclic policiesduring the global crisis, allowing it to leave the crisiswithout deteriorating balance sheets and bouncingsince then in a quick and strong manner. However,if the situation in Europe strongly deteriorates, LACcountries may suffer adverse effects and possiblypresent vulnerabilities that until now were latent.Besides the good policies during the last decades,the relatively successful performance during thecrisis of 2008/09, LAC was assisted by the factthat trade patterns of a number of countries ofthe region has slightly displaced towards emergingmarket economies (China in particular and Brazilin the region), thus reducing direct exposure tothe epicenters of the crisis. Also, because of thefacts that demand of basic exported products byLAC countries remained high as a result of highChinese demand, despite the global crisis. “Finally,I would like to add that although Latin Americadid well in the last crisis, initial conditions of todayare different to those of 2007/08 and the growthmotor of China may not be in condition to offera counterweight to the recession in Europe orthe slowness in the United States as was done in2008/09”, emphasized Lars Moller of the WorldBank.
  14. 14. January-April 2012For Alberto Bernal, Research Director of BulltickCapital Markets, the financial sector of the regionhad much more strict rules when the 2008 crisisbroke out: banks of the region had a base of verystable deposits, and leverage was relatively low.Therefore, banks did not have to go out to sell theiroverdue portfolio for their capitalization in the shortterm (they did not have to implement the “fire sales”as had to be done by the banks of Wall Street during2008 and 2009).The region has implemented pension reforms forsome time now, which changed the structure ofthe system from one based on inter-generationalgenerosity to a system based on individualcapitalization. This is important for long-term fiscalstability and reduces the risk that debt markets maystart to attack regional assets (as is being done againstEuropean countries).The experience is showing that systems withfixed exchange rates increase the virulence of thefinancial crisis within the respective real economies.Latin America has, with little exceptions, systemsof a variable type of exchange, fact that helped tosafeguard the fall of international trade throughmaterial depreciations of the exchange rate.Experts of the Economic Commission for LatinAmerica and the Caribbean (ECLAC) state that LatinAmerica is today in a privileged situation amidst thecrisis faced by some European countries. Especiallyworth noting was the control of public finance andthe sustainability of the debt, regional assets thatmust be maintained. “Quality of public finances hasimproved in Latin America, public debt has beendrastically reduced and its profile and compositionis more balanced; fiscal income and average tax rateincreased, the decrease in payment of interests hasgenerated important fiscal spaces, and social publicexpense has been maintained”, stated the ExecutiveSecretary of ECLAC.Latin America was Prepared for the Crisis:Bulltick Capital MarketsLatin America is Today in a PrivilegedSituation: ECLAC
  15. 15. January-April 2012With world economy moving at a slow pace, retailcompanies are turning on their radars to detectwhere opportunities are and the GPS is directedto Latin America. According to information ofEuromonitor International, quoted by Clarín ofBuenos Aires, in 2011 real sales growth in the regionwas 4%, the highest worldwide. Surveying shows thatLatin America is expanding at a greater rhythm thanAsia Pacific, the previous retail trading Mecca, andis now “the new motor of growth for global retail”.There exist three combining factors: rising economicactivity, more persons parting from poverty andintegrating to the middle class, and greater and betteraccess to credit in some markets, as is assumed byEuromonitor. The expense per capita in the area ofretail trade was US$1,700 in 2011, whereas in AsiaPacific this indicator was US$900. In Eastern Europeexpense is higher, US$2,300, but the differential jumpis given in Western Europe and the United States,where each person disburses an average of US$6,000a year.Euromonitor forecasts point out that the retail saleswill increase this side of the world between 3.5 and4% per year, from here to 2016. “Brazil and Mexicoare responsible of the greater majority of these newsales through new channels such as pharmacy chainsand wholesalers”, says Jon Wright, executive ofEuromonitor.Despite cuts to projections of growth of LatinAmerican economies for 2012 as a result of theturmoil of the global crisis, the infrastructure sectorof the region has a positive perspective for this year,as shown by the 2012 Survey on Infrastructure ofBNamericas, developed for experts and executivesof the industry between November and December2011. A consensus is evident regarding the factthat levels of risk-return in Latin America forinfrastructure investments promise being moreattractive or, at least, equal to other emerging marketsin 2012. This optimistic perception is also nourishedby the confidence of the majority of those surveyedthat the deterioration of the international economicenvironment will not affect the infrastructureprojects of the region. But concerns also exist.The lack of planning and government supportwas mentioned as one of the main barriers fordeveloping infrastructure initiatives, a deficit moreevident among surveyed individuals from Mexico,who are also the most pessimistic in relation tothe possible impact of the global crisis. Accordingto the survey, countries with greater investmentopportunities are: Brazil, Colombia, Chile, Peru andMexico.Latin America is the New Paradise for RetailSales: EuromonitorA Positive Perspective for the InfrastructureSector of the Region:Executive Summary of 2012 Survey of BusinessNews Americas
  16. 16. January-April 2012THE FOOTPRINT OF CHINA IN LATINAMERICA: HELP OR THREAT?Since Deng Xiaoping formulated its policy of the“four modernizations” in 1978, China is known tothe world as “the motor of the economy” becauseof the sustained growth it has maintained over thelast 30 years. The fact is these four modernizations –agriculture, industry, technology and defense – werethe result of “a considerable increase in developingproductive forces and, in the mid-term, the economythat obliged migration of peasants to the city tocontrol the growth of its population”. So was statedby the academician of the University Franciscode Victoria of Spain, Gloria Claudio, who addedthat China has been overcoming for several yearsthe Gross Domestic Product (GDP) of the greatpowers, having reached 11.4% per year, a percentagethat represents the fifth consecutive figure of thosecountries that have surpassed 10% and the highestof the world in the last 20 years. A scenario that wasalso described in detail in her article “China, 30 yearsof economic growth”.It seems some believe this growth does not stop, asaccording to the study Power Transitions: Strategiesfor the 21 Countries, of the University of Claremont(United States), the economic expansion of Chinawill firmly continue during the years to come andwill displace United States as the first world powerin the first half of this century for Latin Americaand the Caribbean, as it is considered the secondmost important business partner of the region.For Enrique Dussel, professor of UniversidadAutónoma of Mexico (UNAM), the presence ofChina in Latin America will increase ever moreas “the region has strong economic foundationsthat have maintained it unaffected in current crisis.Besides, worth noting is the high and increasingcommercial deficit of the region with China thatamounted to 50,000 million dollars in 2008, causedby imports”. The academic added that transnationalChinese companies have demonstrated diversestrategies to enter and remain in the Latin Americanmarket. “In the first place, the central Chinesegovernment is constantly diversifying its reservesin energy and commodities for the future, and insecond place, thanks to treaties and agreementssigned by the region with China, the Asian countryhas accomplished important investments withoutlimitations, as has been done in Brazil, Peru andMexico”, emphasized Dussel.However, the boom of the commercial exchangesbetween countries of the region and China has notbeen equal for all. Venezuela and Central Americahave been affected by imports of manufacturedproducts and are not being displaced from the
  17. 17. January-April 2012The demand for Latin American commodities byChina will help the region to overcome the effectsof the global crisis although it yet implies great risksdespite last advancements in Europe, stated theauthorities of the International Monetary Fund thebeginning of March in a seminar on macroeconomicpolicies in Punta del Este, Uruguay, reported theagency Reuters.China, and its voracious appetite for agriculturecommodities and metals exported by the region, hascontributed so that Latin America may better resistthan on other occasions the present turbulences inmarket of the United States. In a communication,the coeditor of the book “China in the 21st Century:Economy, policy and society with an emergingpower”, José Luis León-Manríquez, said that “Chinahas occupied some empty spots left by the UnitedStates, as Washington is more concerned withother matters, such as the war against terrorism, itsinterventions in Afghanistan and Iraq, the nucleationof North Korea and Iran, and the need to rebuildthe Atlantic Alliance”. León-Manríquez added thatalthough the presence of China in Latin Americadoes not seem to come from a political strategyseeking to displace the United States as regionalpower, it is also foreseeable that while the energeticsources continue lacking and the world’s oil reservesdecrease, rivalry between the first and second crudeoil consumer will increase. This battlefield is not onlyLatin American, but also of the Middle East, Russia,Africa, the Caspian and any other place with oil.Other countries that have benefited from thepresence of China in the region are Chile, Brazil,Argentina and Peru, thanks to the positivecommercial balances and the increase of directinvestment. In the column of opinion “Towards agreater proximity China-Chile”, the director of theInstitute of Latin American Studies and professorof international economy at the University ofInternational Business & Economics (China), ZhaoXuemei, said that in the case of Chile, the acceleratedgrowth of exchange of products is because offour principal reasons: mutual complementarinessof exchanged products; the importance of theeconomic opening; the coincidence in the applicationof strategies to diversify external markets by bothcountries; and a very stable relationship of bothnations in the political environment. Xuemei addedthat between China and Chile exists a mutual needof products such as fishmeal, agro-feed, forestry andwine sales that are considered very important forthe economic growth of China. “In the meantime,Chinese exports to the South American countryconcentrate basically in the sector of manufacturedgoods, such as electrical appliances and computers,among others. In this scenario, the bilateralcommerce presents favorable results for both parties,with the consequent economic and commercialapproach”, she stated. The footprint left until now bythe Asian giant in different Latin American countriesis clear and ever more notorious; and despite todayits growth projection with the global economic crisisis the lowest in eight years according to the reportpresented by its own Prime Minister, Wen Jiabao,China will continue looking at the region as one ofits principal future commercial partners.Chinese Demand will Help Latin America toOvercome the Crisis
  18. 18. January-April 2012the developed world. “China will continue being afundamental element in the demand of our products;news are encouraging”, said the IMF director for theWestern Hemisphere, Nicolás Eyzaguirre, in a pressconference. However, the official recommendedto the region not to overlook the entry of foreigncapital, as it is a latent threat in times in which theUnited States and Europe maintain their interest rateslow and a wave of capitals arrives to Latin Americaseeking high returns.Also, the region must be vigilant in the face of theforecasts that anticipate a deceleration of Chineseeconomy. In this line, the deputy manager of theIMF, Min Zhu, said that if the situation in Europeshould worsen and Peking does not adopt thenecessary fiscal measures, growth of Chineseeconomy could go back up to four percentagepoints. Instead, if the necessary measures are appliedon time, this deceleration would significantly shortento one percentage point, he explained.According to Educamericas, the rise of China ascommercial power has caused concern in view ofthe fact it may become a threat to exports from othercountries. Several studies have found that actuallythere could be adverse effects, mainly for Mexicoand Central America. However, there could also bepositive effects resulting both from the high growthof China, with annual average rates higher than 9%,as to the fact that it concentrates one fifth of theworld population, which causes this market to reallyrepresent a commercial opportunity.A study developed by the Center of EconomicStudies of El Colegio of Mexico for the School ofEconomics of the University of Chile, analyzedthe effect of China through different channels: asa market, as a competitor, and as a supplier. As amarket, results obtained show that all groups ofLatin American countries are elastic in presentingfor their exports the entry-demand of China equalor higher to those of the remaining regions of thegroups of countries being considered, with theexception of the countries of East Asia. This impliesit is not possible to speak of “lost opportunities” inthe Chinese market for Latin America.This analysis allowed evaluating how China becamea serious competitor for Latin American exports.Opposite to that expected according to the emphasisof certain press on a “Chinese threat”, on theaggregate it was not found that the imports ofLatin American commercial partners made fromChina have displaced the imports they do fromLatin America. Upon analyzing the effect of Chinaas supplier, only a positive effect was found forthe exports of countries from the South Cone: anincrease of imports from China is associated withan increase of exports to third party markets. Thisanalysis was done in an aggregate level and as suchsignificantly permits to consider general balanceeffects. For example, a country may lose marketsin certain sectors because of the larger Chinesepresence as competitor, but may win markets inother sectors both because of economic integrationand to the presence of inputs and capital goods atlower costs.A Chinese Threat to Latin AmericanInternational Trade?
  19. 19. January-April 2012
  20. 20. January-April 2012TREATY CONSTITUTING THEALLIANCE OF THE PACIFIC:MEXICO, COLOMBIA, PERU AND CHILEChile, Mexico, Peru and Colombia have given thefinal push to the Alliance of the Pacific, havingaccomplished during an unprecedented virtualsummit of its presidents last March 5th, anagreement on the treaty constituting this initiative forregional integration, informed the Diario FinancieroDF of Chile. “We have realized the fundamentalpoints in order to sign the treaty that brings to life theAlliance of the Pacific”, stated Colombian president,Juan Manuel Santos, who was the leader of thevideoconference from the Executive Headquartersin Bogotá. Santos and his colleagues of Mexico,Felipe Calderón; Chile, Sebastián Piñera, and Peru,Ollanta Humala, have virtually met to put an end tothe procedures towards establishing the Alliance ofthe Pacific, an initiative in which their countries havebeen working since 2011. The appointment, the thirdof this mechanism of integration in the making, alsohad as observers the presidents of Panama, RicardoMartinelli, and Costa Rica, Laura Chinchilla.During a videoconference of just one and a halfhours, the four presidents arrived at an agreement on“three fundamental points” for the establishment ofthe Alliance of the Pacific that had been identifiedlast December 4 during a Summit in the Mexicancity of Mérida. There, Piñera, Calderón, Humalaand Santos agreed to give preference to matters onthe movement of persons, businesses, migrationfacilitation, commerce and integration, and servicesand capitals that were left in the hands of “technicalgroups”.The Alliance of the Pacific is a proposal of acommercial block, an initiative of the formerpresident of Peru, Alan García, who at first extendedthe invitation to his counterparts of Chile, Colombia,Mexico and Panama with the purpose of deepeningin the integration between these economies anddefining joint actions for commercial bonds withAsia Pacific, based on the existing bilateral tradeagreements between the member states. Theintention of this alliance is to encourage regionalintegration, and also a greater growth, developmentand competitiveness of the economies of theircountries, and at the same time to progressivelyadvance towards the objective of accomplishingthe free circulation of goods, services, capitals andpeople.Presidents Martinelli of Panama, Piñera of Chile, Calderón of México,Santos of Colombia and Humala of Peru
  21. 21. January-April 2012(Predictor of the World Financial Crisis in 2008)ACONCAGUA BIOCEANIC CORRIDOR(CHILE-ARGENTINA):VIABILITY TO BE DETERMINED INSEPTEMBERSegunda online of Chile informed last March thatPresidents of Chile, Sebastián Piñera, and Argentina,Cristina Fernández, agreed to continue the evaluationprocess of the technical studies required in relationto the project of the Aconcagua Bioceanic Corridorand its 52-km railway tunnel between the Andesand Mendoza, thus having given instructions tothe binational entity analyzing these documentsto determine, within a 6-month term ending nextSeptember, the feasibility to develop works. Likewise,they announced that to speed up the process, thebinational entity shall start preparing a base proposalfor a call to bid for companies interested in theproject.iThe above is part of the Joint Declaration signed byboth presidents during the official state visit to Chileof the President of Argentina, the central objectivebeing strongly advancing in the projects of physicaland commercial integration between both nations.“The Aconcagua Bioceanic Corridor and itsrailway tunnel at low altitude have given a crucialstep towards realizing the announcement done bythe presidents of Chile and Argentina. Expectedobjectives have been accomplished, whichencourages with greater force to expect the callfor bid for the binational works”, expressed HugoEurnekian, vice-president of the Argentineancompany Corporación América, that altogether withEmpresas Navieras of Chile, Mitsubishi Corporationof Japan, Geodata of Italy and Contreras Hermanosof Argentina, have proceeded with the projectentering a private investment of more than US$3billion. Eurnekian added that “President Fernándezgave great support to the low altitude tunnel”, inreference to the speech of the President last nightat a dinner in her honor, where she stated that “thedream of our Liberators San Martín and O’Higginswill come true when we will be joined together bythe physical integration of the tunnel under themountain range, thus leaving in the past the oldparadigm of Argentina in the Atlantic and Chile inthe Pacific”.
  22. 22. January-April 2012WORLD SHIPPING CRISIS:HAMBURG SÜD UNIFIES SERVICES INSOUTH AMERICA WITH MSCAND MAERSK INCREASES FREIGHTSAs of January, Hamburg Süd unified with theMediterranean Shipping Company MSC its servicesin the route Mediterranean Sea-East Coast of SouthAmerica, thus both companies now have eightvessels with a capacity of 5,900 TEUs (seven ofMSC and one of Hamburg Süd). The restructuringof these lines was necessary, according to HamburgSüd, because of existing market conditions, affectedgreatly by a greater offer of sea transportation inrelation to demand and to the consequent reductionin freights. Let us remember that last November,as a result of the world crisis, CMA had alreadyassociated with CMA-CGM for two years on theirtraffic between Asia, Northern Europe, South Africaand the South American routes, effective as of thismonth of March.On the other hand, Maersk, the principal shippingline of the world holding 16% of the market isreducing its fleet in 9% and increasing freights (inBrazil, for example, average increase is of 30% fordifferent destinations such as Europe, Asia, MiddleEast and the United States, which will most surelyoccur with the other Latin American routes). Theincreases are the result of its tariff restructuringpolicy seeking for a profitable business after a year2011 in which the company entered losses forUS$602 million in its global operations.“2012 will be a critical year for world navigation”stated to Valor the general director of Maersk inBrazil, Peter Gyde, who also added that currentlyat world level almost 6% of container vessels arestanding and that in the beginning of 2011 thispercentage was almost 12%.Fleet reduction by Maersk will be facilitated byan agreement of shared vessels with the Frenchcontainer company CMA CGM, both companiesmerging a number of their services, some of them inLatin America.
  23. 23. January-April 2012In March issue the editor of Container Management,Geoff Adams, stated that “once more, the shippinglines are looking to reduce capacity as some marketsare slipping away”, and he quoted Neil Dekker,author of the quarterly Container Forecaster ofDrewry, who last November predicted in thispublication that an excess capacity in key routeswould cause that some containers shipping lineswould not cover costs.In confirmation of the latter, the NOL Groupannounced in February a net loss of US$478million for 2011, thus causing that the executivedirector of the Group, Ng Yat Chung describethe performance of containers transportation asdisappointing. “Excess capacity and higher fuelcosts have negatively affected the entire containerstransportation industry. We are urgently resolvingcosts and all the other factors under our controlto improve our performance,” he said, adding thatdespite recent improvements in freight rates, resultsare still uncertain because of global economy.The company recognized that the containerstransportation industry continues facing an excesscapacity and that if these conditions should continue,financial performance will continue being weak.The last and ambitious plan to rescue the Eurozoneand rescue Greece has been received by many withcaution, instead of seeing it as the “start-up” neededby European economy to return once again to areal growth, which increases the possibility of areturn travel for the stability of the region, whichcould be seen by the commerce of Asia-Europeroutes operating below average during a considerabletime. Adding the spectrum of the first ten Triple-E(18,000 TEU capacity) vessels that will enter thehorizon in the year 2013-14, one could ask ifrebalancing offer over demand will be enough andsee if the lines liberate from the worst, or if this isjust the beginning of more in the future. This is whatDekker had to say in November: “The largest seatransporters are looking for scale economies with theever bigger super post-Panamax vessels, but in doingthis, the industry has a great risk of introducing toomuch capacity at the same time and ruining thealready fragile balance between supply and demand”.Editorial of Container Management on the Difficulties of Shipping Lines
  24. 24. January-April 2012Upgrading port terminals is the challenge assumedby the government of Nicaragua since January10, 2007, convinced it will emerge in front of itsstrongest competitors of the Central Americanregion. More information in www.epn.gob.niThe president of EPN, Virgilio Silva presented the Monkey Point port project inthe Caribbean, at the Andean Infrastructure Summitheld the end of March in Bogotá.CWith an investment of almost US$1,000 millionsand a 33-year concession that started last yearwhen the government of Costa Rica awarded theconstruction and operation of the Terminal ofContainers Moín – TCM, the Dutch multinationalAPM Terminals will build in Limón, Costa RicanCaribbean, a breakwater of 2.2 km to counteractweather conditions that prevent the normaloperation of a modern port. Dredging will also bedone by APM Terminals and the access channelnow 10.5 meters deep will be 18 meters deep, whichEMPRESA PORTUARIA NACIONAL OFNICARAGUA, APM TERMINALS MOÍNOF COSTA RICA AND PORTMAGDALENA OFCOLOMBIA ENTER LATINPORTSwill enable receiving much larger vessels, with acapacity of up to 8,500 containers, generating scaleeconomies and reducing costs. TCM will have 1,500meters of dock and 5 berths with 9 gantry cranes.Works will start in 2013 and the first stage must bein operation in 2014. More information in www.apmterminalsmoin.comThe general manager of APM Terminal Moín isCaptain Paul Gallie Paul.Gallie@apmterminals.comThis new corporate member of Latinports is awaterway and sea terminal, of the Free Zone (ZonaFranca) group of Barranquilla, providing services tooffshore vessels, specialized in handling liquid bulkcargos, especially chemical products and petroleumby-products. Located 20 km from the mouth of theMagdalena River, it has a natural shelter facilitatingnavigation and port operations. At present it movesapproximately one million tons of cargo. Moreinformation in of Portmagdalena is Patricia Montoya,
  25. 25. January-April 2012CONFERENCE OF THE EXECUTIVE DIRECTOROF LATINPORTS AT THE ANDEAN & CENTRALAMERICAN INFRASTRUCTURE SUMMITEnero - Abril 2012UPCOMING EVENTSAltogether with the general director of CorporaciónAutónoma Regional del Río Grande de laMagdalena, Cormagdalena, the executive directorof Latinports, Julián Palacio, on March 29 in Bogotámade a presentation on the Advances of theNavigation Project in the Magdalena River, a follow-up of the first specialized seminar of Latinports heldin September of last year on this matter.It was really satisfactory for Cormagdalena andLatinports being able to announce that the jointeffort of the Colombian government and the LatinAmerican Association of Ports and Terminals beganto bear fruit: what in the September seminar wasonly expectations, in March became a reality withthe announcement of the President of the Republic,Juan Manuel Santos, of the availability of resourcesfor the amount of US$400 million to realize themost ambitious infrastructure project in the historyof Colombia: navigation from and to the center ofthe country.May 21- 25Riu Plaza Hotel, PanamaMaritime Week Americas 2012 will take place inPanama, one of the largest maritime centersworldwide, now the core of some of the mostinteresting changes impacting world navigationindustries, ports and bunkering.The executive director of Latinports, JuliánPalacio, will participate with a conference called:Economy of Post-Panamax Vessels: Will theLargest Survive? (The Effect in Latin America),and will act as moderator of the RegionalPort Round Table Session: Challenges in anUncertain World.For more information on this event please clickon or
  26. 26. January-April 2012CWA-Expo Carga is the platform where 18thousand experts of the foreign trade and cargotransportation sectors converge to enter businessesbetween America, Europe, Asia and the rest of theworld. This event gathers:8. Private initiative9. Chambers and Associations10. Governmental AgenciesFor more Information click in www.expo-carga.comor directly contact Verónica Velásquez Telephone 52(55) 54425760 Ext. 188Context and international containers transportationtrends may be seen in this forum, and also strategiesand challenges in the face of the free tradeagreements – FTA, emphasizing on national reality,and the different points of the logistics chain, suchas port activity, management and security in internaltransportation, and development of containers yards,among other topics, as vital axis of a good containerslogistics.For more information please communicate 5-7, 2012World Trade Center, Mexico, D.F. PORTS AND CONTAINERS FORUM –LOGISTICS AND COMPETITIVENESSNational Association of ColombianEntrepreneurs - ANDIJuly 5-6, 2012AR Hotel, Bogotá
  27. 27. January-April 2012Latin American Port NewsArgentinaArabs Plan to Invest US$300 Million in the Portof Buenos AiresAccording to, investors of the UnitedArab Emirates entered into an agreement duringthe visit to Buenos Aires in March, jointly witha delegation of entrepreneurs. The president ofthe Directory of Dubai Ports World, Sultan BinSulayem, was part of the delegation headed by theMinister of Foreign Affairs, Sheikh Abdullah binZayed Al Nahyan. When the agreement worksbegin, a thousand jobs will be generated, which willenable having a state-of-the-art infrastructure for2015.The port modernization project was preparedby Terminales Río de la Plata (TRP) – Argentineanoperator of the Dubai Port World network –altogether with the General Port Management,the Secretary’s Office of Transportation, and theMinistry of Planning. The new project will enableproviding Argentinean foreign trade with scaleeconomies for sea transportation, preventingtransshipments in other ports of the East coastof South America, which causes delays and costoverruns in the chain of value.Terminales Río de la Plata (TRP) is located in PuertoNuevo, Buenos Aires, and has the concession of theport operation. With an operative area of 430,000m2, fully adapted and refurbished, TRP operates24 hours/day, 362 days/year. In 2011 US$25million were invested in the Cruise Terminal BenitoQuinquela Martín, opened in 2011.Dubai Port World is one of the principal portoperators worldwide, with 45 containers terminals in29 countries.The Argentinean Chamber of Shipping Linesand Assemblers, CAENA, in Spanish, quoted, announced that the sector will seek topotentiate support to offshore operations, hopingto increase the presence of its own vessels and shipsdestined to sea and/or waterway transportation forliquid, liquefied gases and solid cargos.CAENA commits to work in several lines ofaction with the intention of potentiating thenational maritime business: on one hand it will tryto underpin the signing of a Merchant Navy LawNational Shipping Lines Investments for US$50Million
  28. 28. January-April 2012BrazilContainer scanner is still controversialLatin American Port Newsof origin. This has generated great controversialwithin the sector. In Brazil, according to articlecontents, shippers consider that the measure willlockup foreign trade and have disastrous impactson costs and times of operation. On the otherhand, port terminals and exporters consider thissupervision will make commercial exchange moretransparent. This article informs that Santos Brasil,the “largest container terminal of the country”,invested US$11,2 million in the acquisition offive supervision equipment. According to MauroSalgado, director of Santos Brasil, the company isalready prepared for changes and investment willspeed up cargo verification processes. “We are notforecasting negative impacts for the operation”, hestated. The same viewpoint is shared by the generalmanager for logistics of the Curimbaba Group,Fabrizio De Paulis. “It increases security of exportedcargo. I do not believe this procedure will causedelays.”However, previously the president of MaerskLine for Latin America and the Caribbean statedthat “in the practice, the implementation of thislaw is not possible as supervision may not bephysically done. Every two years the United Stateshas been postponing the limit date. Now the dateis 2014, and we do not believe it may be a factprior to 2016, 2018”. However, Sérgio Salomão,of Abratec considers that “the American law wasan inspiration of the Treasury, but requirementwill be of a general character, both for exportsand for imports, and not only for the UnitedStates”. Finally, the article says that the inspectionof a container entering the terminal is not a fullsecurity guarantee, as until it is loaded onto the shipit may be, in theory, manipulated. “At the SpecialSecretary of Ports, SEP, (in Spanish), we defendedthe traceability of the container and the cargothat combines the joint criteria attained betweenassemblers and shippers unions, and on the otherhand, to contribute to consolidate a foreseeablesystem that will multiply the presence of theArgentinean flag at the Paraguay-Paraná Waterway.“This sustained effort points out to the expansionof employment sources already produced by thesector. At today’s values, and a sustained growth,partner companies of CAENA generate morethan 2,000 direct jobs for embarked Argentineancrew members. The average monthly gross salary isapproximately US$5,000, positioning the industry asone of the most buoyant sectors and these workersamong some of the best paid of the country”, stateda communication of the entity. This sector alsogenerates approximately 20,000 indirect jobs relatedto naval workshops, suppliers, maritime agencies andother entries.An article of the newspaper Valor published theend of April, entitled ‘Container Scanner is stillControversial’ highlights the determination of thegovernment of the United States to enforce 100%of sea import containers to be scanned at the ports
  29. 29. January-April 2012Investments in the sector:Priority for Waterways:Approximately US$16 billion in investments arebeing entered or planned by the Brazilian port sector,as announced by the general director in charge of theNational Water Transportation Agency, Antaq, TiagoLima, during his participation in the Intermodal fairheld in Sao Paulo in mid-April. Projects correspondto the construction of port terminals (US$10,5billion investments for new private ports and US$5,5million for public ports terminals). NewspaperTribuna added an important news based on currentcontext: Brazil has 34 public ports and 129 privateports, emphasis in the article being placed on publicports and informing that most investments on theseNoticias Portuarias Latinoamericanasfrom its origin to its destination”, states the partner-director of the consultant firm Agência Porto,Fabrizio Pierdomenico, who was Port Planningand Development Secretary of SEP. He believesthat despite having to assume an additional costall countries exporting to the United States, Brazilhas yet another “but”. “It continues being unequalfor Brazil because of our tax load. Our concern iswho will have to pay the costs of the investmentsundertaken by the terminals”, he states. “It is evidentthat the terminal will review the costs”, says Salomãofrom Abratec.facilities shall be applied to the southeastern regionthat will receive US$2,5 billions; the northeasternsector will receive US$1 billion; the north sectorUS$0.8 billion. Santos will receive US$1,85 billion,with the implementation of the terminals ofEmbraport and Brasil Terminal Portuaria BTP,which will start operations next year.The Secretary of National Transportation Policiesof the Ministry of Transportation, MarceloPerrupato, defended a pact supporting the waterwaymode, covering the entire country. According toPerrupato, the increase in navigation “should beaddressed as a national priority” by the Braziliansociety as a whole, as was informed by Tribuna.He also commented that the federal governmentis looking to balance the national transportationmatrix, mentioning that the National Logistics andTransportation Plan is determined that in 2025, 33%of Brazilian cargo will be transported by road, 32%by railroad, and 29% by waterway. The remaining(6%) would be for other type of transportation.Marcelo Perrupato
  30. 30. January-April 2012New Manaus Terminal is expected to StartOperations in 2014:President of the Republic AnnouncesInvestment in the Cuban Port of MarielNoticias Portuarias LatinoamericanasValor, on a special publication on the Free Zone ofManaus emphasized its momentum on the growthof the city that moved from 250,000 inhabitants in1997 (when the free zone was created) to 2.2 millionat present within its metropolitan area. Today, theIndustrial Pole of Manaus on the Amazon River,a little more than 1,000 kilometers from its mouth,hosts more than 600 companies and more than5,000 commercial users, becoming the economicand cultural center of the Northern Region ofBrazil.In the case of the port, currently insufficient,its relief will come as of mid-2014, when theconstruction of a new cargo terminal must becompleted, at a cost of US$230 million and tobe operated by concession to private enterprise,doubling the capacity of the two existing terminals.Prior to the visit that President Dilma Rousseffwould do to Cuba on January 31, the differentBrazilian newspapers informed that the centralpoint of her visit was to announce the financingof the BNDES for the extension of the port ofMariel, jornais relataram que o ponto central da visita é oanúncio de financiamento do BNDES. The Chamber ofForeign Commerce, CAMEX, approved liberatingthe amount of US$230 million to finance works,project that will include a total of US$600 million.This value is equal only to the Brazilian part ofthe works of the port, and in this region Cubanspretend to install an industrial pole. According toValor, Mariel is the highest Brazilian commitmentin Cuba. Investment in this project to export goodsand services represents 70% of the entire funding inthe last 15 years of the BNDES in operations withCuba as final destination.
  31. 31. January-April 2012According to Tribuna, Log-In with 25% of themarket in the area, projects a growth of at least 10%per year in the next four years. In the five years it hasbeen working in cabotage, the company has had anaverage growth of 27% per year in movement ofcontainers and large-size clients were conquered bythe advantages represented by the modality, such asmaritime transportation security for product integrity.Log-In has 11 vessels: eight container ships and threebulk carriers.million in 2011 to 8 million in 2013”, explainingthe increase in capacity will be the result of aseries of extensions, purchase of last generationequipment, and the entry in operation of newprivate projects such as Embraport, DP World andBrasil Terminal Portuario BTP, the latter controlledby Europe Terminal that, according to Serra, willstart operations in October 2012. The president ofCODESP recalled that current port operators suchas Santos Brasil, Libra and Tecondi, made importantinvestments that will result in an additional growthincrease.Cabotage Companies are Reliant on SectorGrowthNoticias Portuarias LatinoamericanasArticle of Brasil Econômico on transportation andlogistics highlights the containers segment quoting acomment of the former secretary of policies of theMinistry of Transportation, and current executivedirector of Agência T1, José Augusto Valente,according to which “the false discussion existingin the country that public ports are saturated andare locking the growth of economy, is being buriedby reality”. According to the specialist, since 2003there have been logistics and port blackouts thatare never confirmed; “on the contrary, ports willdouble their containers capacity in the next fouryears”, affirms Valente, thus emphasizing a crucialpoint to revert negativism in various matters on thesector. The article tells that Brazilian foreign tradeincreased almost fourfold in eight years (2002 to2010) and that containers moved from 2 million in2002 to 4.5 million last year, commenting that thesenumbers show that port logistics has supported theexpansion of economy and foreign trade, althoughbetter productivity and service indicators would bedesirable.On the other hand, Estado published an interviewwith the president of Companhia Docas doEstado de Sao Paulo, CODESP, José RobertoSerra, according to who “Santos, the major portof Latin America, will double its capacity in 2013,mobilizing the same amount of containers thanall other Brazilian ports together, moving from 3.2Ports will Double Their Containers Capacity inthe Next Four Years
  32. 32. January-April 2012Terminal Pacífico Sur (TPS) and Empresa PortuariaValparaíso (EPV) signed on January 9 themodification of the contract that will enable startingextension works at Site 3, one of the measuresconsidered in the port’s Plan of Expansion,enabling to maintain its competitiveness in theyears to come. The project of extension of Site 3that will become the first extension of the berthfront of Valparaíso in more than 80 years, includesan extension of 120 meters and the structuralreinforcement of sites 4 and 5, leading these to anantiseismic condition. Execution of works will allowserving two Post-Panamax ships simultaneouslyand accompanying the growth of shipping lines orattract others, opening job positions for this activity,and thus maintaining competitiveness of the Port ofValparaiso.It is considered that once engineering studies andmaneuvering simulation have been concluded, andafter receiving the approvals and correspondingpermits from the corresponding authorities, workswill start the first quarter of 2013 and will lastabout 18 months. The general manager of TPS,Francesco Schiaffino, stated “this initiative showsour commitment to maintain the competitiveness ofthe Port of Valparaiso through the execution of acreative and ambitious project”. The executive addedthat “our challenge is that this Terminal continuesbeing a key player for the city, the region and thecountry, as we are convinced that Valparaiso hasall the conditions for a long-term and sustainableprojection, as a modern, large scale port pole”.On the other hand, the general manager of EPV,Harald Jaeger, expressed that “we are satisfied withthe signing of this modification to the contract withTPS, as the works at Terminal 1, which will furtherinclude the next tender for Terminal 2, will enableValparaiso to have two highly competitive terminalsTribuna highlights that in the past years a reactivationis being tested, including the arrival of the actorsto the market, but, to grow even more, besides the13% participation in the country’s cargo movement,“a push is required” according to the text. Cabotagewas already strong in Brazil but it weakened in the70s and 80s because of lack of investment and theintolerance to delays in time of high inflation.Log-In will launch on July 1st a cabotagetransportation service integrating two regions:Northeast and Southeast in North Brazil. Theintention of the company is having a vessel with1,700 TEU capacity that will basically serve betterelectrical appliances to the area of Manaus and thatmay increase the route in 10,000 TEU. The companywill focus on ports of the Northeast as Suape, Santos,and Rio de Janeiro.According to the Minister of Ports, LeonidasCristino, the new version of the National Plan ofPort Logistics will encourage cabotage navigation.The Terminal Pacífico Sur of Valparaísoand Empresa Portuaria Valparaíso, sign anextension agreementNoticias Portuarias LatinoamericanasChile
  33. 33. January-April 2012Noticias Portuarias LatinoamericanasMinister of Transportation Committed withthe Support to the Project of the MagdalenaWaterway:The Magdalena River Must be Assumedas the Great Supplier and the Axis for theDevelopment of Massive Transportation to andfrom the Interior of the Country:he Minister of Transportation, Germán Cardona,committed his support to a project for thenavigability of 256 km of the Magdalena waterwayaddressed to transport goods from the centralregion of the country to the coast. The initiative ofUS$400 million is being executed by the CorporaciónAutónoma Regional del Río Grande de la Magdalena(Cormagdalena) and is also supported by PresidentJuan Manuel Santos, as informed by the Ministry ofTransportation. “It is time for the Magdalena River”,stated Cardona. “The possibility exists to materializethe idea of seeing in this river artery the best wayto transport heavy products from the center of thecountry to the Caribbean”.for Chilean foreign trade, and fully satisfy theprojected regional demand for the next years”. Theextension of the concession will last until December31, 2029.Until now, almost US$21 million have been investedin the preliminary works for the project. TheNational Institute of Roads, INVÍAS, in Spanish,stated it will manage and assign all the necessaryfinancing to improve traffic connectivity with theMagdalena waterway. The river that extends 900 km,at present has only 700 navigable kilometers andimproving the waterway will be the quickest way totransport oil to the Caribbean coast and would alsohelp to eliminate approximately 1,200 heavy loadtrucks from the roads of the country.Minister Germán Cardona and the director ofCormagdalena, Augusto García, as well as theexecutive director of Latinports, Julián Palacio,referred to this matter during the AndeanInfrastructure Summit that took place in Bogotá theend of March.The regional investment agency, ProBarranquilla,informed that the National Association ofEntrepreneurs –ANDI, proposed the definition andexecution of a Plan of Development that will makeof Barranquilla the Region-City it is called to be,Colombia
  34. 34. January-April 2012Barranquilla Prepares for the Implementationof the FTA with the United States:Waterway Ports of the United States andEurope Present their ExperiencesNoticias Portuarias Latinoamericanastaking advantage of the new circumstances of theeleven free trade agreements entered into or aboutto be entered into by Colombia, and the new Law ofRoyalties that allows executing zonal infrastructureprojects to integrate specific territories, linking themto those new international markets. The proposalincludes the generation of communication corridorswhere efficient road infrastructure converges,excellent cargo terminals, very good operationconditions of the airport, and a greater developmentof the port area, in such a way the city may offeroptimal levels of logistics services, generateemployment and economic growth, accomplisha greater development, and may better sell itsindustrial possibilities. The initiative was presentedby transportation and road engineer, Edgar Higuera,executive director of the Chamber of Great Usersof Logistics Services of ANDI, during a meetingpromoted by ProBarranquilla and the MetropolitanArea of Barranquilla with the elected mayors of thecity districts and entrepreneurs of the sector.The expert bases on the fact that today Barranquillais the largest and most developed city of the GreatCaribbean Basin, not only in relation to Colombiabut also of the countries that form it, as it has moreindustrial areas, more universities, more areas ofproduction, a river that connects it with the interiorof the country, a basic infrastructure, and a greatairport. However, in terms of logistics, Barranquillaalso has bottlenecks that affect its competitiveness.Studies of ANDI show that between 20% and30% of the logistics costs are generated at the seaterminals and especially in what is known as theovercosts of the ‘last mile’. Higuera added thatBarranquilla has to necessarily look to the MagdalenaRiver, explaining that the river must be assumed asthe great supplier and the axis for the developmentof massive transportation from and to the interiorof the country, but also as a city of excellenturban reference, thus generating a parallel plan ofdevelopment enabling to clearly see that Barranquillais a city-port with a majestic river artery integratedaround a great park.At the main waterway-sea port of Colombia, locatedat the mouth of the Magdalena River, the weekbefore last of April several events were held onthe Free Trade Agreement with the United States,to be implemented on May 15 of this year, wherepossibilities for Barranquilla were discussed, one ofthe main cities of Colombia.The United States was represented by Houston andNew Orleans, and Europe by Rotterdam, Le Havreand Hamburg, all located at the mouth of the mostimportant rivers of their corresponding countries.The executive director of Latinports, JulianPalacio, made a presentation titled “Rehabilitationof the Magdalena Waterway: a Response to theFTA implementation, showing that only with the
  35. 35. January-April 2012Noticias Portuarias LatinoamericanasIn the last report of the Unit for InfrastructureServices of the Economic Commission for LatinAmerica and the Caribbean (ECLAC), the portof Cartagena, formed by Sociedad PortuariaRegional, Contecar and Muelles El Bosque), witha movement of 1,853,342 TEUs, was placed fifthamong the 100 best ports of Latin America and theCaribbean, having displaced Buenos Aires. The twofirst places were for Panama (Colon and Balboa),the third for Santos, Brazil, and the fourth place forKingston, Jamaica. Cartagena is followed by BuenosAires, Manzanillo (Mexico), Callao, Guayaquil andFreeport (Bahamas).Americas Gateway Development Corporation(Amega) will start the phase of proposals of itsproject for a transshipment terminal of US$1,100million in Costa Rica, stated to BNamericas itsgeneral director, Aubrey de Young. The projectdenominated Megaterminal Transbordo Atlántico(MTA) consists in a deep water terminal fortransshipment of containers that will be located inMoín, on the Caribbean coast of Costa Rica.Amega has the exclusive right to be the leader of theproject from the stage of proposals up to a publictender for a 30-year concession to build and operatethe port. The proposal phase includes detailedtechnical, environmental, commercial and financialrehabilitation of the waterway from the center ofthe country, as announced by the president of therepublic, Barranquilla will become the capital of theFTA, as was baptized by the minister of commerceon this same occasion.Despite the ports of the region have grown 11%in 2011, its global participation scarcely maintainsin 7%. Asia moves more than 50% of containerstransported by sea worldwide and China, inparticular, represents 29% of world trade with 164million TEUs last year.Cartagena Displaces Buenos Aires from theFifth Place in Containers TrafficAmega Starts the Phase of Proposals for theTransshipment Terminal of MoínCosta Rica
  36. 36. January-April 2012CubaNoticias Portuarias LatinoamericanasAccording to the agency Reuters, during a visit ofPresident Dilma Rousseff to Cuba on January 31st,she said that Brazil may make a great contributionto revive fragile Cuban economy, and in reference tothe Port of Mariel, 45 km from Havana, she addedthat “we participate not only in the constructionof the port, but also in bringing a cooperationI consider strategic for Brazil and Cuba”.Modernization works of a containers terminal beingbuilt in the port of Mariel with Brazilian funding arebeing done by the Brazilian company Odebrechtand must conclude in January 2013, with worksincluding special development areas with industriesto export and supply the Cuban market.President of Brazil Inspects Works at the Portof Mariel:studies. “The final schedule of this stage indicatesa period of 12 months, but we expect that withthe help of the government will be able to bringforward this term. Amega will announce importantagreements in the next few weeks, said De Young.The transfer terminal will have the capacity to move2 million TEU per year with a 1-km dock, a 19maccess channel to the port of Moín, and berthingfor three container vessels of approximately 14,000TEUs. The MTA project will be located next toa container terminal that is being built by APMTerminals, although apparently the two terminals willnot be in direct competition as the Amega terminalwill serve a different market and will undertake cargotransshipment of up to 14,000 TEU from largercontainer vessels to those currently serving or to anyfuture ships.The transshipment terminal is also attractive forother Central American countries, according to DeYoung. “Our project is really a strategic regionalcontribution, because it will not only handle nationalcargo but locates other countries in a place fromwhere they can have access to the world”, stated theexecutive.Costa Rican Vice-president, Luis Lieberman, hasaffirmed that the government wishes the bid for theproject be opened and granted prior to presidentialelections of 2014.
  37. 37. January-April 2012El SalvadorNoticias Portuarias LatinoamericanasEcuadorPort of Manta opens Concession Tender:Autonomous Executive Port CommissionForesees Receiving Offers in November for theConcession of Port La UniónOn April 30 the Port Authority of Manta APMdeclared starting the process for the “Managementconcession of public port services to be providedfor infrastructure and facilities at the multi-purposedeep water terminal of the Port of Manta”.According to the APM, general conditions forthese specifications are available on the port’swebpage and may be downloaded prior registrationand payment of the not reimbursable amount ofUS$10,000. Further on, APM will organize visitsto the port and will prepare an Information Roomwhere only interested parties that have acquired thebid documents will have access and who have alsoentered into the Commitment of Confidentiality.The national port operator of El Salvador, theAutonomous Executive Port Commission, CEPA,expects to receive offers for the concession of thePort of La Unión in November of this year, said themanager of concessions of the authority, RolandoDíaz during the Andean & Central AmericanInfrastructure Summit held in Bogotá the end ofMarch.The International Financial Corporation, CFI,started working in January with consulting firms toprepare bases for the concession tender that couldextend for up to 30 years. The US infrastructureconsulting firm Moffatt & Nichol is developingtechnical and engineering analysis.CEPA expects to publish the tender bases in August,thus offers will be received in November and thecontract would be awarded in December. Onceentering into the contract, which may probably occurin January of next year, the new concessionairemay start to operate almost at once, which is oneof the principal advantages of the project, statedDíaz. “Definitely an interest exists. It is a continuousprocess to approach potential interested parties. Asthe process and preparation of bases advance, theopinion of the market must be seen”, stated theexecutive who also added that CEPA has receivedexpressions of interest from operators such asAPM Terminals, the Spanish Containers Terminalof Barcelona, the operator of the Colombian portof Cartagena, SPRC, and the Chileans SAAM andUltramar. Interested parties will have to demonstratehaving a liquid capital of minimum US$40 millionand port operation experience moving at least600,000 TEU per year.
  38. 38. January-April 2012Noticias Portuarias LatinoamericanasInteroceanic Corridor Seeks Investors:Law Enacted for Public-Private AssociationsThe port of La Unión had a cost of US$183 millionand its construction by the consortium Toa-Jan DeNul was completed in June 2008. The multipurposeport specializes in handling containers, with acapacity of 850,000 TEU in its first stage and 1,7million TEU after the second and third developmentstages.The company Corredor Interoceánico de Guatemala S.A.seeks investors for fuel transportation between thetwo oceans, each with an extension of 336 km. Inaddition to the interoceanic corridor that will costUS$7,800 million (50% more than the extensionof the Panama Canal), which is a response tothe trransportation demand originating in Asia(particularly China) will require the constuction oftwo megaports, one on each ocean. In mid-AprilProject directors were in Bogotá for this purpose,as was informed by the Colombian newspaper, LaRepública.On January 15, the President of Mexico, FelipeCalderon, enacted the Law of Public-PrivateAssociations (PPA), which has as central objectiveto multiply infrastructure investment, through theassociation between public and private sectors,law presented since 2009 to the Congress for itsanalysis. The president assured that the PPA lawand the modifications related to the infrastructureconstruction and provision of public services, willprovide greater security and legal certainty to theprivate players that want to participate in complexinfrastructure projects that expedite the response tothe need of the country’s infrastructure, and also agreater efficiency in the use of public resources.The administration of President Calderón presentedto Congress a package of reforms of diverse legalorders to promote Mexican economic growthand development encouraging the increment ofinfrastructure investment to historical levels. Thegovernment is currently investing 5% of the GrossDomestic Product in matters of infrastructure,compared to the 3% entered in 2000.GuatemalaMéxico
  39. 39. January-April 2012Noticias Portuarias LatinoamericanasPerúRecord in Port Investments in the Last SixYears:Callao Consolidated as Leader Port of the SouthAmerican Pacific in 2011APM Terminals Callao Doubles ProductivityPorts of Mexico have received an investment ofmore than US$3,000 million since President FelipeCalderón entered office in 2006. Total investment,including both public and private funds, is thehighest that has been materialized during anygovernment in the last 25 years, stated Calderón inFebruary.The port of Callao consolidated as leader portof the South American Pacific having moved 1,6million containers in 2011, exceeding in 20% the1,3 million containers of 2010, as informed by theEconomic Commission for Latin America andthe Caribbean (ECLAC). Thus, according to theMaritime Bulletin of ECLAC, the main Peruvianport exceeded the port of Guayaquil that moved1,4 million containers last year and positioned in thesecond place. The third and fourth place were forthe Chilean ports of Valparaiso and San Antoniowith 973,000 and 854,000 containers moved,respectively, followed by Buenaventura of Colombiathat moved 748,000 containers.According to Container Management of the end ofFebruary, in the seven months since assumingcontrol of the North Terminal on a 30-yearconcession joint venture between APM Terminals(APMT) and Peru’s Central Portuaria, the facility,now operating as ‘APM Terminals Callao’, has seenproductivity more than doubled to 26.5 moves perhour per crane, while gate turnaround time hasdecreased by 49% to 28 minutes.
  40. 40. January-April 2012Noticias Portuarias LatinoamericanasSuccessfully Completed Binational Pilot Test forMultimodal Road – River TrafficAccording to the agency Andina, a pilot test ofinternational community customs traffic Peru-Ecuador-Peru was successfully completed havingachieved the reduction of fuel transportation from20 to 6 days to its final destination, was informed bythe Andean Community (CAN), a test promoted bythe General Secretary of the entity. This test that wasdone upon request of a private enterprise, involvedthe transportation of 60,000 gallons of biodieselto a mining camp through a different route thanthe traditional one. The route started in the city ofTalara (Piura), passing by Huaquillas (Ecuadorian-Peruvian border), Cuenca and Puerto Morona inthe Ecuadorian forest, and arriving at the town ofSargento Puño, in the Peruvian forest. Coordinationswere done with customs of Peru and Ecuadorfor the approval of the operation of CommunityCustoms Traffic and the qualification of roads,border crossings and passes.Test allowed verifying that while fuel supply of thecamp by waterway from the city of Iquitos (Loreto)lasted 20 days having to travel 753 kilometers, the useof the new route, combining roads and waterways,reduced costs and time to six days at most. TheGeneral Secretary of CAN, Adalid Contreras, statedthis experience of Community Customs Traffic isa concrete example of the use of the communitycustoms norm, where boundaries are broken andpeople are integrated, saving time and economicresources. A similar experience has already beendone between Colombia – Ecuador – Colombia,using the land custom offices of Ipiales (Colombia)and Tulcán and San Miguel (Ecuador), and then thePutumayo River taking goods to Leticia (Colombia).
  41. 41. January-April 2012MailI wish to congratulate you for the great effortdone by Latinports.Franc PignaGeneral DirectorAegir Ports Property AdvisorsUSACongratulations for the excellent presentationof the bulletin and for featuring us in it.Fernando RevecoDevelopment and Project ManagerUltramar GroupChileI attended your conference on investments inports in Latin America last December inLondon and our company is interested inhaving more Information on containers ports.Harald SperleinKfW IPEX-Bank GmbHFrankfurt, GermanyIt was a great privilege to meet you all alongthis port route and even more to learn fromthe events you have promoted in LatinAmerica. Thanks for the permanent supportto the challenges of our sector.Fernando FialhFormer Executive DirectorNational Water Transportation AgencyBrazil
  42. 42. January-April 2012We are interested in port projects developedin Latin America. We have a programthat promotes world investment expansionof Korean shipping lines and we see a greatopportunity in your region.Hye KyeongInternational Logistics ResearchDepartmentKorea Maritime InstituteSeoul, KoreaThanks for the information; very completeLeonardo DelgadoGeneral ManagerAlmacenes Generales de Depósito delBanco Popular (Bonded Warehouses ofBanco Popular)AlpopularBogotá, ColombiaWe will share with all our affiliates thismaterial of great interest to our guild.Antonio FelflePresidentPort Association of BarranquillaColombiaI read the last bulletin of Latinports andfound it really interesting and varied, with agreat amount of valuable port Information.Mauricio EstebanManagerSoluciones Financieras, SolfinBogotáA very good document. CongratulationsCarmen MartínSuperintendent of Logistics & PortsMPX Colombia
  43. 43. January-April 2012LATIN AMERICAN ASSOCIATION OF PORTS AND TERMINALSLATINPORTSMEMBERSHIP FORMCORPORATE MEMBER (Latin American Port or Terminal): ___SUSTAINING MEMBER (Companies related to the port industry or portsand terminals from other regions of the world): ___Company:Address:City, Country:Telephone:Website:Legal Representative (Contact Person):Position:E-mail:Brief Description of the Company:As corporate (sustaining) member we agree to pay the annual dues ofUS$2,500 (US$850) within 30 days following presentation of the invoice.SIGNED:NAME AND POSITION OF PERSONFILLING OUT THE FORM:DATE:Please return this form filled out to