Manzanillo’s Port To Get Big Makeover
Here is an article for your rainy Sunday morning reading enjoyment. This article was originally posted September 30th on Lloydslist and is about Manzanillo's port and the big changes in store for it:
Tuesday 30 September 2008
MANZANILLO, the largest port in Mexico and the fourth largest in Latin America, is set for an upgrade in order to keep pace with another year of runaway growth.
The Mexican government is preparing to release documents outlining a second dedicated container terminal concession at the port later next month.
Capacity in the port somehow manages to keep pace with double-digit volume growth, but all stakeholders agree that a new terminal is required. Capacity will be more than doubled, with the addition of new capacity as the port prepares to handle as much as 4.5m teu by 2011.
Last year, volumes leapt 13% to 1.4m teu — stretching its lead over the second largest port in Mexico, Veracruz. In the last four years, volumes have more than doubled.
The Pacific coast leader already accounts for nearly twice the volumes of its closest rival on the Gulf Coast, accounting for the decision by the government to push ahead with privatization in Manzanillo ahead of other ports.
SSA Mexico’s managing director, Francisco Kassian, says Manzanillo and other Pacific coast ports are reaping the rewards of stability and efficiency.
“Mexico’s geographical position, productivity, competitiveness as well as no labor strikes have influenced the lines in their deployment of vessels in Mexico,” he said.
“Bigger ships are arriving at Mexican ports since some of lines have chosen Mexican ports to be their hub for the Pacific Basin. The Secretary for Communications and Transport is encouraging the private sector to invest in expanding the present infrastructure as well as in new greenfield projects to cope with the demand and shipping lines requirements,” he added.
SSA Mexico manages the largest of Manzanillo’s three container-handling facilities. In October last year, the terminal, which accounts for almost half of the containers handled in Mexico’s most important port, clinched an agreement with the government to expand its facilities.
“In October 2007, after long negotiations with the Ministry of Transport, an expansion agreement was signed that has allowed SSA Mexico to handle increased volumes through the priority use of 554 m of new berth and 10 hectares of backland for its container yard,” said Mr Kassian.
The terminal is now equipped with six ship-to-shore gantry cranes, including cranes capable of handling super post-panamax vessels, 28 RTGs in the patios and another four in the port’s on-dock rail operation. All told, the port has an annual capacity of nearly 1m teu. Six additional RTGs are due to be delivered next month and an additional three gantry cranes in February.
One of the elements of the terminal’s success is that it is “one of the few in Mexico with an extensive double-stack rail connection adjacent to its berth”, said Mr Kassian.
Internally, Mexico’s leading terminal has experienced increasing competition from multi-user facilities including Hutchison Port Holdings’ TIMSA terminal and OCUPA, the privately-owned Mexican operator.
TIMSA is investing $14m to increase its capacity to 340,000 teu a year. It will double its area from 4.29 ha to 8.49 ha and acquire 24 terminal trucks for $3.2m and a new Gottwald mobile harbour crane at a cost of $6m. It will also unite four separate areas, with the expansion creating a more efficient operation.
Rail operator Ferromex serves the port and it has committed itself to invest in equipment to match those investments being made on the dock.
“Manzanillo has very ambitious projects to increase their containerized cargo, obviously we are planning to do the investment necessary to complement this growth,” said Terry McDermott, commercial director of Ferromex.
There is plenty of room for growth, particularly in the movement of containerized cargoes. He said: “If we look at the port of Manzanillo, the participation of rail cargo is below 25% and has not grown at the same rate as the port. We see some intermodal traffic. Before, it did not exist, but today what is moving is still small: 1,300 containers on three weekly services. There is a lot of potential to grow.”
Of course, this was all before the economy started it's freefall, but if Mexico does manage to stabalize the peso and prevent a recession, a lot of changes are in store for Manzanillo. With higher fuel prices, and increased cost of importing foreign goods from China, more and more companies are looking towards "nearshoring" as a better way to outsource. This port addition would put Manzanillo in an excellent position to recieve the increased business.
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