Supply Chain Council of European Union |

Latin America ports expand target to include shippers and forwarders

As the Port of Cartagena Group celebrates its 25th anniversary this year, it has embarked on a period of diversification as it responds to the new challenges of rapidly changing container supply chains.

25 years ago it had a quay, which was originally constructed in 1934, and could handle around 200,000 teu annually, with a draft alongside of 10 metres with the largest vessels it could handle was 1,300 teu.

“We had no cranes, no systems and no one would trust us to handle their cargo. But after a lot of fights and making a lot of mistakes, but we now have 5m teu capacity, 15 metres of draft and can handle vessels up to 16,000 teu; and we have customers that trust us,” group marking manager Giovanni Benedetti told delegate at this week’s TOC Americas Container Supply Chain event in Cartagena.

This year Mr Benedetti expects Cartagena to handle 3m teu, and next year he forecasts 3.6m-3.8m teu – which means it is far outperforming many of its regional competitors.

According to Dinesh Sharma, director at Drewry Maritime Advisors, container port throughput volumes across the Latin American region are expected to show a 2% decline in 2019, although they are also expected to rebound with between 3.4% and 4.1% growth in 2020.

“But what is growth? For us it is not just about container volumes – the development of our port is based on being a hub for three pillars: container carriers, freight forwarders and as a location for international distribution centres for multinationals,” Mr Benedetti explained.

He described the less-than-container load (LCL) hub opened by Panalpina in the port around a year ago and which changed the face of transhipment operations Cartagena as a “pretty successful” example of how it was trying to attract forwarders directly.

He added that targeting these three groups with the ambition of securing greater amounts of cargo in and around the port has resulted in the development of three key initiatives.

“The first is to develop what is behind the port in terms of distribution centres and value-added services with the aim of diversifying out revenues but also lowering the cost of moving containers to the port. “It also allows us to ask what is the role of the port in the [cross-border] e-commerce economy and I believe we will be able to begin offering port-to-door e-commerce solutions,” he said.

A second prong of its strategy is to increase the number of port-to-port pairings it has through greater cooperation to make the journey of a container once it leaves Cartagena to the end destination more seamless: “The shipper is still our customer even once its container has left our port,” he said.

The final strategy is to introduce an extended gate concept for its hinterland customers: “Ports and terminal operators should address the last mile a lot more – and our shippers need to think about the port as being at their doorstop, because we are putting a lot of effort into this,” he said.

Drewry’s Mr Sharma, who explained that 80% of Cartagena’s volume is transhipment with the remainder gateway traffic, suggested that this might explain how Cartagena has managed to buck the trend of declining container volumes in the region.

“I suspect that part of the reason for Cartagena’s growth is the recent establishment of the huge warehouse for Decathalon – this cargo is not just for domestic consumption, but a lot of it is stock that is being stored for region, and possibly even the US,” he said.

It is also fair to say that Cartagena is embracing the digital revolution, having launched Delta X Ventures, the first start-up accelerator dedicated to the logistics industry in Latin America.

Delta X has so far funded four start-ups, including Mexico’s first digital-only freight forwarder Nowports; another Mexican venture, Logiety, which has digitalised customs and tariff data; and Colombian last mile e-commerce logistics service provider

Delta X Ventures head of innovation Karina Kure said it was currently preparing to invite another round of applications.

The 19th version of TOC Americas continues 31 October in Cartagena de Indias, Colombia, October 29-31.
Source: TOC Worldwide

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