December 12, 2013
‘A port system only for BA City, or also for producers and consumers?’
The authorities of the City of Buenos Aires are working on a master plan which is expected to be approved late this year. That includes a Strategic Plan for the Port of Buenos Aires as one of its axes. However, leading experts argue that it fails to adequately address the fast dynamics of the maritime, transport and trade sectors, and also the interests of producers and consumers.
Antonio Zuidwijk, a connoisseur of maritime transport issues in Argentina and Brazil, claims that — contrary to what their peers in the US and Brazil are doing — Argentine producers and consumers haven‘t shown any interest in the debate so far.
In an interview with the Herald he also addresses urban, logistics and inter-modal transport issues.
In July the Port of Buenos Aires received the first vessel of 9.600 TEUs, the Cap San Nicolás. What could you say about this?
This has really been a very important event. Only two years ago nobody would have believed you if you predicted that such a big vessel would come to the port of Buenos Aires. When the ship was nearly ready, not even the owners confirmed in the world press in which of their lines it would start service. Finally it was decided that it would go to the Port of Buenos Aires, which has shown that it can receive vessels of this enormous size. But this does not mean that now everything is clear for the future and many studies still have to be made.
On June 17, Captain Sergio Borrelli — the trustee of the Ports General Administration (AGP) state company which runs the port of Buenos Aires — told the Herald that simulations were being conducted to accommodate vessels of up to 420 metres long and 60 metres wide and that talks were under way with private terminals to assess their readiness for a US$600-700 million expansion plan that would have zero cost for the state. Also, in August the Herald covered a Forum of the Strategic Planning Council of the City of Buenos Aires (COPE) and the Professional Council of Civil Engineering (CPIC), who have been working together...
I have read some of your interesting interviews with participants in this Forum and I also have read the whole booklet Strategic Visions on the Port of Buenos Aires. In fact we addressed this in our interview of June 3, when I said that we have to draw up a Strategic Plan of all Argentine Ports and that the federal government certainly will play its part, but that producers must pay much more attention to this because such a plan is crucial for their competitiveness, and also crucial for consumers. So far, neither producers nor consumer organizations have shown any interest in this matter. They should be aware that there are clear indications that competition will be increasingly stronger and if our logistics costs keep rising, we may lose our market share. They should follow the example of their peers in the US and now also in Brazil .
What is your view on the Strategic Visions on the Port of Buenos Aires?
In this booklet we can read a lot about “Nostalgic Porteños,” “Juan de Garay,” or “Pedro de Mendoza,” but very little is said about the real function of a port in the logistics chain. Some people should read a 2004 study conducted by the United Nations Conference on Trade and Development (UNCTAD) called Assessment of a seaport land interface: an analytical framework. Study MISC 2004/3.
There you can find information on how the position of a port and its connections by road, rail and (where available) inland waterways must be considered. For this, it is absolutely necessary to conduct a real study of how the ports of Argentina should serve the interests of our consumers and our producers, not only of those who live in and around Buenos Aires.
They cite many examples of “port cities” in the world like New York, San Francisco, Rotterdam, Amsterdam, and some even cite Shanghai, which in fact is the best example in the world of how to build a new port far away from a city but which is impossible for us to take as a real example.
But instead of proposing in their plans that these examples will really be followed and will be implemented for the port of Buenos Aires, you can only read what I call “rhetoric,” especially when some talk about how to transform the Villa 31 shantytown, which is a scourge that has grown in a central area of the port system and is doing enormous harm to our economy. Some seem to say that by solving this problem (which is insoluble) the Port-City of Buenos Aires will set a global example for the whole world of the possible co-existence between the port and the city.
There is much talk about changing heavy transport networks in the city, implementing inter-modal transportation, and creating logistics nodes, without saying where and how you can do all this and what the costs and benefits would be. That is the way they paint their plans to “restore the historic grandeur which the Port of Buenos Aires once had.” Practically nothing is said in a clear way, that complementation with other ports will be needed in the future and how studies must be conducted to obtain alternative solutions in the most effective way. And that is what one can find in the real examples of what was done in those city-ports, which the authors themselves mention in the booklet and about which I could give you much information.
When you talk about a Strategic Plan, you need to draw a Strengths, Weaknesses, Opportunities and Threats (SWOT) study.
But wasn’t that mentioned in the booklet?
These words you find only once in the Strategic Visions on the Port of Buenos Aires , but at no point is there any indication that somebody will attempt to turn this into an effective study.
The only chapter to reflect reality is called Rail access to the Port of Buenos Aires and the Metropolitan Region, which describes the real difficulties.
Rail has lower costs and can win any competition with trucks vis-à-vis long distances like our country has, provided it can operate with long trains and without restrictions.
In the Metropolitan Railways system, where passenger and freight trains share the same tracks — something that causes problems all over the world — trains can be a maximum 600 metres long and have time restrictions (windows).
From Tucumán to Rosario and Zárate, the private NCA company uses trains of 1,100 metres, which can carry 3,700 tons of copper ore.
This is very little by international standards. In Brazil soybeans are transported at a rate of 8,000 tons per convoy and minerals at a rate of 13,000 tons per convoy. Even much better examples can be found in other big countries where minerals and basic products are transported by train in kilometre-long convoys.
You have just mentioned the Vi-lla 31 shantytown. But experts and City officials say that also the new and plush Puerto Madero buildings are choking the port.
A complete answer would take enough space to fill today’s entire edition. You can find many examples of plush buildings, with houses and offices in many former port areas and there is a worldwide association, AIVP, where you can find information about some very successful conversions in big and small towns. Look at the history of the port of Helsinki, Finland, the country with the highest standard of living in the world. That should be an important part of studies. You could start by remembering an interview of the then Buenos Aires Mayor Jorge Telerman, when he said that the port of Buenos Aires should be relocated to the East and North-West of Buenos Aires. In those days you could read what the beautiful City of Sydney was doing to relocate their harbours to Port Botany and Port Kembla. Just have a look at the good results. But also read in this month’s newspapers what is being discussed in a relatively small city, Santos. Every day you can read about “the port, the city, the congestion, the extra costs,” etc. Brazilian planners of the late 70s had a clearer view of ports and cities than those who followed later and in 1980 the first container terminal was built on green fields, on the other side of the estuary, outside the city. Later, they choked the modern terminal outside the city with low-income houses and brought container terminals back to the centre of the city and now you can see the results. Many are claiming now that the container and grain terminals in the city of Santos should be relocated to the other side or, as the case of the new BTP terminal, close to the foot of the highways to Sao Paulo and with direct rail access. But the best thing to do, is to publish one day in your newspaper what Singapore, the second-largest port in the world, is doing: it is already making plans to move its most modern harbours in 2030 to other areas and use the present location to build plush buildings.
Let’s go back to producers and consumers.
Our producers should start investigating a bit how globalization, competitiveness and economies of scale in shipping have worked in the world over the last decades. They should start reading how globalization is in fact based on something which began in 1956 with the use of containers in the United States and which spread in the 60s to Europe. There is no doubt that industrialized countries pushed the massive use of containers up the throats of their commercial partners because this was in their own interest. It is absolutely true that they did so to solve their own problems and not those of emerging countries, which did not benefit at all in the first decades of containerization. The use of this piece of transport equipment required very high investments and only the industrialized countries improved their own competitiveness. Most emerging countries have been dragged down by the changes and in most cases have resisted them fiercely. But many have stopped reading this history at this point and never had a look at recent studies about the benefits which, after all, this “container” has brought to almost all countries in the world.
What, for instance?
It is a proven fact that over the long run, emerging countries have benefited as much as the industrialized countries which started this. Intermodal Transport, resurgence of rail-transportation all over the world, cost reductions in transport and infrastructure and much more. Recently a train-service was started between China and the port of Hamburg in Germany. In the 80s and 90s the massive use of containers began to move around the world and resulted in an impressive growth of world trade, which benefited both the core countries and emerging countries, almost without any exception. Many international studies have been made about this evolution, some as early as 1980 and some very recently, in February 2013, which deserve much more attention than is given in our region.
There is much talk about logistics and multi-modal transport. When did those terms appear?
With the use of containers, the core countries studied how they could improve their competitiveness, and found that they could implement new and much better streamlined forms of trade and transport. New systems were invented to hire the total transport in a chain of international commerce and transport, and new terms appeared: “Seamless Transport Chains,” and “Intermodal Transportation” in the US, and “Combined Transport” in Europe. Then followed “International Physical Distribution” and later came the magic word, “logistics” and finally the term “multi-modal transport” was invented between 1972 and 1980 in the UNCTAD discussions about the failed “Multi-modal Transport Convention.” Many talk about multi-modal transport but yet few understand what it really means.
And what does all this actually mean, in your view?
An attentive reader of some of these international studies can conclude that, in general, the leaders of many emerging countries have paid little attention to what happened during this evolution and the benefits it was bringing undoubtedly to almost everyone after 1990. The continued efforts of the UNCTAD, created in 1964 to foster new knowledge among developing countries, were only read by a small group of people who were directly affected in their daily work by the changes. Meanwhile in the US, Europe and Japan, major think-tanks analyzed how they could advance further after each step taken. Until today, the effects of progress have been studied carefully in a Scheme of International Trade and Transportation, where each cost generated to carry an item of merchandise or a person is taken rigorously into account.
Within this scheme they evaluate how they can obtain the most efficient system and how they can reduce the overall costs to a minimum. I repeat, all costs are included, direct and indirect, including the costs of infrastructure. An example of such a scheme can be found in the CPIC presentation at www.antonioz.com.ar).
How do you see the giant ships fitting into this scheme?
Another result of the massive use of containers is the advance of the economies of scale, with the use of ever bigger container ships, which “exploded” after 2000 and reached its climax in July, 2013, when 18,000 TEU-vessels entered the world’s busiest traffic, which is between Asia and Europe, and 9,600 TEU-vessels between South America and Asia. (TEU means equivalent units 20ft container. A 40-footer counts for 2 TEU).
This will have a huge impact on the system of shipping and ports on the East Coast of South America, extending from the port of Pecém/Fortaleza, in northern Brazil, to the River Plate.
This trend could be envisaged already in 2001, when I wrote a book: Containers, Ships and Ports, parts of a Transport System. Its last chapter was called The Need to Prepare a Strategic Plan for Argentine Ports 2030.
At the CPIC forum there were mentions of a Master Plan 2030: Development of the Port of Buenos Aires.
We need to open a public debate to judge whether or not it is necessary to finally draw up a Strategic Plan for Argentine Ports 2030 and not only for the Port of Buenos Aires. All international studies, without exception, teach us that the basis for a strategic plan for a port must begin with a study of its connectivity with the rail system. We must study with all stakeholders how our port system should serve the interests of our foreign trade and how it should benefit our consumers and producers. There is no doubt that those important stakeholders should take the initiative.