Stephenson was speaking at the CSA Annual General Meeting held in Panama and participants had come in large number to be briefed on the latest Canal expansion report and also to discuss what will be the future of business in the region after the Canal opens its third lane mid-2015.
Four transhipment hub, Manzanillo International Terminal (MIT) and Colon Container Terminal (CCT), both in Panama, DP World Caucedo in Dominican Republic and Kingston in Jamaica, are the main hubs in the region redeploying cargo to secondary hubs through feeder lines. The major hubs are all expanding their facilities to prepare for the arrival of new-panamax vessels after 2015.
In Panama, MIT is undertaking a $270m expansion to increase capacity to 4m teu while CCT capacity will rise to 2m teu with its $66m expansion. Caucedo, operated by DP World is also looking at expanding while Kingston is embarking on a privatisation of its main terminal to attract more cargo. Even Cuba will have a new 1m teu container terminal in Mariel by 2014.
Cartagena, in Colombia, is undertaking a $530m investment in extensive infrastructure and technology upgrades in an effort to boost its capacity to become one of the largest players of the region. Most of the ports, in the islands, want a piece of the cake and have been planning tenders to lure international operators.
However, the regional container throughput remained sluggish in 2012 mostly due to the fall of Venezuelan exports and imports and the rescheduling of several shipping services, ports operators said.
It is likely that “we will see more consolidation [amongst shipping lines] to capitalise on economies of scale, with less services,” Maersk Line-Caribbean Islands general manager Andres Rodriguez told the CSA conference. Although the Canal expansion will not generate more volumes, cargo will shift to different areas with regional hubs becoming more relevant as they will distribute cargo in the region, he said.
Warning about a war of rates for the feeder lines, “there is nothing we can do if there is no cargo and feeder lines will depend on trade volumes,” said Tom Paelinck, executive vice president of Caribbean Feeder Services, one of the major feeders in the Caribbean region. “The business [of transporting cargo through feeder lines] will essentially rely on cost and speed of operations.
“But since there will a larger number of bigger vessels sailing in the region, so will grow opportunities of developing the existing facilities while there will be more business for feeder lines but it will likely affect the rates for the Caribbean and bring more competition amongst regional feeders, he said.
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