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Wednesday, Nov. 21, 2012

As Panama Canal expands, Latin America rushes to be ready

Ports across Latin America and the Caribbean are rushing to meet the challenges of the Panama Canal expansion head-on.

- jwyss@MiamiHerald.com

BUENAVENTURA, Colombia -- Standing atop a hulking crane at this country’s largest Pacific port, Alejandro Echeverri pointed out scurrying workers below reinforcing pylons, preparing the ground for an extended pier and tending to a dredging boat that has been deepening the harbor.

As the planning director for the Buenaventura Regional Port Authority, Echeverri says his job is to be a “futurologist” and try to stay ahead of the industry. Right now, the industry’s future is high stakes and under the sway of a singular event: the expansion of the Panama Canal, which will make the ships that straddle the seas larger and heavier than these ports have ever seen.

The industry “doesn’t care what ports need to do to be ready or what it costs,” Echeverri said. “If you’re not ready, they’ll simply take you off their route.”

Ports throughout the Americas and the Caribbean are rushing to be ready for the post-Panamax future. Currently, the Panama Canal can handle ships 965 feet long that need a depth of 39.5, a size known as Panamax. Once the expansion is complete in 2015, the canal will be able to accommodate ships 1,200 feet long with a 50-foot draft — and shippers are already building to those dimensions.

Ports in Costa Rica, Peru, Jamaica, the Bahamas and Cuba, among others, are either expanding or have plans to expand.

Some, like Buenaventura, hope to receive the “post-Panamax” ships and become a transshipment hub that will supply smaller ports with feeder vessels. Others are simply bracing for increased feeder traffic.

“For the second time, the Panama Canal is going to divide the history of shipping,” said Domingo Chinea, the general manager of the Buenaventura Regional Port Society, who is overseeing the $450 million modernization project. “All the ports along the Pacific are trying to get ready.”

The race for deep water is fierce. Buenaventura currently feeds much of the traffic to the shallower port in Guayaquil, Ecuador. But Buenaventura is facing competition from Balboa, in Panama, which is emerging as the Latin American leader of transshipment and expects to see its business double after the expansion.

The Bahamas is working with Hutchison Port Holdings to stake its claim as the most modern container facility in the English-speaking Caribbean. With a depth of 52 feet, the Freeport Container Port can already accommodate post-Panamax ships.

“We are the best prepared,” said Ian Rolle, president of The Grand Bahama Port Authority. “We have the necessary equipment to handle the traffic and if we need more, we will get it. Having a harbor that is deep enough to accommodate these ships is key.”

But both the port of Jacksonville and Miami are hoping to take a bite out of Bahamian business.

PortMiami is also hoping to undercut Freeport and regain some of the transshipment business that it lost after the terrorist attacks of Sept. 11, 2001, when new security regulations strangled business.

PortMiami Director Bill Johnson said the Panama Canal expansion and Miami’s recent designation as a foreign trade zone, which will make transshipping less cumbersome, will be a threat to Freeport.

“They should be worried,’’ he said. “Our job is to bring this business back. How do we change this? By being bulldog aggressive.”

In many ways, all of the ports in the region need to succeed for any of them to succeed, said German Silva, Colombia’s former vice minister of transportation and a shipping consultant.

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