Foro Iberoamericano de Logística y Puertos, Panama, September

19 2013

Latin American Ports:

Logistical Challenges for a Post

Panama Canal Expansion Era

Jean-Paul Rodrigue Professor, Dept. of Global Studies & Geography, Hofstra

University, New York, USA

Los Puertos Iberoamericanos en las Nuevas Rutas de Transporte Marítimo

Potential Impacts of Transoceanic Passages and Canals

Operational Impacts

• Improved capacity, reliability and transit time.

• Lower unit costs.

Substitution Impacts

• Cargo diversion.

• Changes in routing and transshipment.

Induced Impacts

• New and expanded trade relations.

• Development of transshipment hubs and logistics zones.

Problem: Trying to Estimate Induced Impacts from a Derived

Demand Issue

• What merchandise trade will be the most impacted? Container, dry bulk or liquid bulk?

• Which opportunities for which countries and ports?

• Who benefits and who loses?

• What impacts on transshipment?

Induced impacts

questions

• Is the expansion a marginal or significant change?

• On the short and long term, how the expansion of the Panama Canal will impact the strategies of its existing and potential users?

Derived demand impacts

questions

The Panama Canal Expansion: Myths

MYTHS

More traffic.

Creates trade.

Economic development.

Magical effects.

The Panama Canal Expansion: Realities

REALITIES

Potential for economies of scale.

Potential for new shipping routes.

Potential for new trade relations.

Potential for more transshipment.

Evolution of Containerships: The New Panamax

Early Containerships (1956-)

Panamax (1980-)

Post Panamax (1988-)

New Panamax (2014-)

Fully Cellular (1970-)

Panamax Max (1985-)

Post Panamax Plus (2000-)

Post New Panamax (2006-)

Triple E (2013-)

500 – 800 TEU

1,000 – 2,500 TEU

3,000 – 3,400 TEU

3,400 – 4,500 TEU

4,000 – 5,000 TEU

6,000 – 8,000 TEU

12,500 TEU

15,000 TEU

18,000 TEU

200x20x9

137x17x9

215x20x10

250x32x12.5

290x32x12.5

285x40x13

300x43x14.5

366x49x15.2

400x59x15.5

397x56x15.5 ; 22–10–8 (not shown)

(LOA – Beam – Draft)

10

8

23

20

10

6

6

9 17

5

9 15

6

8 13

5

6 13

10

4

5

8 4

6 4

6 containers across

4 containers high on deck

4 containers high below deck

A

B

C

D

E

meters

Global Exports and Container Throughput, 1980-2011

[CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

R² = 0.9675

0

100

200

300

400

500

600

700

0 5 10 15 20

Cont

aine

r Th

roug

hput

(in

mill

ions

of T

EU)

Exports in Current $US

Billones

Global Trade Stalling and Diverging

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

CPB World Trade Index by Volume, 1991-2013 (2005=100)

World Trade

Imports (Advanced Economies)

Exports (Emerging Economies)

Latin America (Exports)

The North American East and West Coasts Dominate…

… but Growth has Shifted to South America / The Caribbean

Emerging Global Maritime Freight Transport System

Main Routing Alternatives between the Pacific and Atlantic

Main Routing Alternatives between East Asia and Northern

Europe

Panama’s Changing Role in the Global Transport System

Transit (Pre 1914)

Tollbooth and Connectivity (1914-1990s)

Transshipment Hub (1990s-

2000s)

Value-added Logistics Hub

(2010s-?)

Proposed Routes for the Nicaragua Canal

Constructions costs? Political risks? Market potential? Competition?

Challenges to the Expansion of the Panama Canal

Issue Challenge

Aggregate demand Potential shift in demand growth patterns (less growth in North America and

more growth in Latin America)

Maritime shipping Higher shipping costs and slow steaming; Tolls taking a large share of the

benefits of economies of scale

Economies of scale Less ship calls and traffic concentration

Transshipment hubs Changes in the transshipment dynamics (hub concentration);

"Funnel effect" towards Panama

West Coast Ports Improved competitiveness of West Coast ports through better hinterland

access

Railways Improved competitiveness of North American rail corridors;

Emerging dichotomy between East Coast and West Coast railways

Gateways New points of entry to service markets (e.g. Lazaro Cardenas, Prince Rupert)

Suez Canal Increasing competitiveness of the Suez Route;

Potential of the Cape Route

Sourcing Changes in sourcing strategies (e.g. near sourcing)