Maritime Transportation in Latin America and the Caribbean
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Lyndon B. Johnson School ofPublic Affairs Policy Research Project Report Number 138 Maritime Transportation in Latin America and the Caribbean Project directed by Leigh B. Boske A report by the Policy Research Project on Multimodal/Intermodal Transportation 2001 The LBJ School ofPublic Affairs publishes a wide range ofpublic policy issue titles. For order information and book availability call 512-471-4218 or write to: Office ofPublications, LyndonB. Johnson School ofPublic Affairs, The University ofTexas at Austin, Box Y, Austin, TX 78713-8925. Information is also available online at www.utexas.edullbj/pubs/. Library ofCongress Catalog Card No.: 2001095022 ISBN: 0-89940-751-X ©2001 by the Board ofRegents The University ofTexas Printed in the U.S.A. All rights reserved Cover design by Doug Marshall LBJ School Publications Office 11 Policy Research Project Participants Project Director Leigh B. Boske, Ph.D. Professor ofEconomics and Public Affairs Students Mustafa Akcay, B.S. (Civil Engineering), Middle East Technical University, Ankara, Turkey Angelica Cervantes, B.A. (Government/English), The University ofTexas at Austin John Cuttino, MPAff, MA, University ofTexas at Austin Cara Dougherty, B.A. (Latin American Studies), Columbia University Celestino Gallegos, B.A. (International Studies), University ofWashington at Seattle Ricardo Garcia Babun, B.A. (Latin American Studies & Spanish/Spanish American Literature), Vanderbilt University Matthew Gever, B.A. (History), University ofCalifornia at Los Angeles Bryan P. Hykes, B.A. (Government and MAS), The University ofTexas at Austin Anna Okola, B.S. (Civil Engineering), Northeastern University Sarah Fox Ozkan, B.S. (Natural Resources and the Environment), University ofMichigan at Ann Arbor Michael L. Pratt, B.A. (History/Spanish), Texas Tech University Richard J. Rodarte, B.A. (Business Administration), Colorado State University Cindy E. Rosales Bush, B.A. (Political Science), B.A. (History), Southern University, Baton Rouge, Louisiana Daniel Stein, B.A. (Spanish, International Relations), University ofRochester Ravi Subramanian, B.S. (Mechanical Engineering), The University ofTexas at Austin David Wortman, P.E., B.S. (General Engineering), University ofIllinois at Urbana/Champaign 111 IV Table of Contents List ofTables ix List ofFigures xi Foreword xiii AcknowledgIIlents xv Executive Summary xxi Chapter 1. Latin American and Caribbean International Trade I Introduction 1 Fonns ofRegional Trade Blocs 2 Regional Trade Blocs in the Americas 3 Interregional Trade Flows 18 Chapter 2. Liner Shipping Services 35 Introduction 35 Global Trends in Maritime Transport 35 Effects ofGlobalization 38 Freight Rates in Latin America and the Caribbean .44 Liner Services in Latin America and the Caribbean 46 The Effect ofConcentration in Latin America and the Caribbean 58 Case Studies 60 Chapter 3. Ports and Port Refonn : 81 Introduction 81 Levels ofPort Privatization and Organization 81 Case Studies ofPort Refonn 82 Buenos Aires, Argentina 82 v Puerto Cabello, Venezuela 93 Kingston, Jamaica 100 Limon-Moin Complex, Costa Rica 108 Rio Haina, Dominican Republic 115 San Antonio, Chile 121 Santos, Brazil ; 129 Veracruz, Mexico 13 8 Willemstad, Cura9ao 144 Panama 149 Chapter 4. Hub Ports 183 Introduction 183 Regional Containerized Trade 183 Necessary Criteria 186 Cautionary Note about Hub Port Development.. 188 PortPrincipal Component Model: Descriptive Model ofCurrent Situation 190 Caribbean Transshipment: Location Linear Regression Model 195 Port Development 203 Conclusion 207 Chapter 5. The Mercosur Atlantic Corridor Consortium 211 Introduction 211 Transportation and Trade Corridors as Units ofAnalysis 212 The Origins ofthe Mideast and the Mercosur Atlantic Corridor Consortia 215 Mercosur Atlantic Corridor Consortium 223 The Impacts ofthe Mercosur Integration Roundtables .224 Roundtable Dilemmas 230 VI Conclusion 232 Chapter 6. Cabotage Law in the Americas 235 Introduction 235 What Cabotage Laws Exist in the Americas 235 The Case against Cabotage 240 The Case for Preserving Cabotage 241 . Regional Cabotage in the European Union .242 Issues for Further Study 246 Appendix A. Port Principal Component Analysis 253 Appendix B. Location Loading Factor 257 Vll VIll List ofTables Table 1.1 Exports ofLeading Products: MERCOSUR 8 Table 1.2 Exports ofLeading Products: Andean Community 11 Table 1.3 Exports ofLeading Products: CACM 13 Table 1.4 Exports ofLeading Products: NAFTA 15 Table 1.5 Exports ofLeading Products: CARICOM 17 Table 2.1 World Fleet Size by Type ofVessel, 1998 36 Table 2.2 Top 20 Container Carriers 40 Table 2.3 Geographic Groupings ofMajor Latin American and Caribbean Ports 47 Table 2.4 Containership Service in LAC 48 Table 2.5 Regional Summary ofContainership Service in LAC 48 Table 2.6 Intraregional Vessel Deployment in LAC 51 Table 2.7 Most Active Intraregional Trade Lanes 52 Table 2.8 Liner Trade between LAC and the World, 2000 54 Table 2.9 Service between LAC and the World 55 Table 2.10 Major Ports in North America 55 Table 2.11 Vessel Deployment between LAC and the World 56 Table 2.12 Most Active Trade Lanes between LAC and the World 57 Table 2.13 Top 20 LAC Container Carriers 60 Table 3.1 Comparative Port Characteristics 83 Table 3.2 Port ofBuenos Aires Container Movement (TEUs), 1994-99 90 Table 3.3 Representative Vessel Costs 97 Table 3.4 Representative Vessel Costs per Container 98 Table 3.5 LoadinglDischarging Costs per Container.. 98 IX Table 3.6 Limon-Moin Equipment 109 Table 4.1 Latin American Containerized Trade Forecast by Region 184 Table 4.2 Port Database 192 Table 4.3 Results ofFactor Analysis for Latin American/Caribbean/ North American East Coast Ports ModeI.. 193 Table 4.4 Caribbean Ports' Transshipment/Location Database 197 Table 4.5 Results ofP-NAEC Trade Lane Regression Model 198 Table 4.6 Results ofP-E Trade Lane Regression ModeL 199 Table 4.7 Results ofP-SAEC Trade Lane Regression ModeL 201 Table 4.8 Typical Draft Requirements for Various Ship Sizes 204 Table 4.9 Location Loading Factor and Draft for South American Ports 205 Table 5.1 Components ofa Transportation Corridor.. 214 Table 5.2 First Impacts ofthe Mideast Corridor Consortium 221 Table 5.3 Mercosur Atlantic Corridor Integration Roundtables 224 Table 5.4 Members ofthe Mideast Corridor Consortium 225 Table 5.5 Achievements ofthe Integration Roundtables 226 Table 6.1 Domestic Shipping Laws 236 Table 6.2 Liberalized Cargo Trades by Market Segment and Country 243 Table 6.3 Flag Involvement in Southern European Cabotage, 1995 244 x List of Figures Figure 1.1 MERCOSUR Trade with Western Hemisphere Trade Blocs, 1999 20 Figure 1.2 Andean Community Trade with Western Hemispshere Trade Blocs, 1999 ... 21 Figure 1.3 CACM Trade with Western Hemisphere Trade Blocs, 1999 22 Figure 1.4 NAFTA Trade with Western Hemisphere Trade Blocs, 1999 23 Figure 1.5 CARICOM Trade with Western Hemisphere Trade Blocs, 1999 24 Figure 1.6 Global Exports and hnports ofMERCOSUR, 1998 27 Figure 1.7 Global Exports and hnports ofAndean Community, 1998 28 Figure 1.8 Global Exports and hnports ofCACM, 1998 29 Figure 1.9 Global Exports and hnports ofNAFTA, 1998 30 Figure 1.10 Global Exports and hnports ofCARICOM, 1998 31 Figure 2.1 Regional Deployment within LAC 49 Figure 2.2 Vessel Size Operating within LAC 50 Figure 2.3 Most Active Trade Lanes within LAC 53 Figure 2.4 Most Active Trade Lanes between LAC and the World 59 Figure 2.5 Hamburg Sud ECSA-to-Europe Sailing Schedule 63 Figure 2.6 Antillean Marine Shipping Corporation Sailing Schedule 67 Figure 2.7 Cabotage in Brazil: A1ian<;a and Docenave Shipping Schedules 71 Figure 4.1 TEU Costs 189 Figure 4.2 Graph ofthe Two Principal Components ofLatin American! CaribbeanlNorth American Ports Model 194 Figure 4.3 Transshipped TEUs vs. Deviation Distance from P-NAEC Trade Lane ...... 198 Figure 4.4 Transshipped TEUs vs. Deviation Distance from P-E Trade Lane 200 Figure 4.5 Transshipped TEUs vs. Deviation Distance from P-SAEC Trade Lane ....... 202 Xl Figure 5.1 The Mideast Corridor Port and Highway Complex 220 Figure 5.2 Mercosur Atlantic Corridor Integration Roundtables 231 XlI Foreword The Lyndon B. Johnson School ofPublic Affairs has established interdisciplinary research on policy problems as the core ofits educational program. A major part ofthis program is the nine-month policy research project, in the course ofwhich two or more faculty members from different disciplines direct the research often to twenty graduate students ofdiverse backgrounds on a policy issue ofconcern to a government or nonprofit agency. This "client orientation" brings students face-to-face with administrators, legislators, and other officials active in the policy process and demonstrates that research in a policy environment demands special talents. It also illuminates the occasional difficulties ofrelating research findings to the world of political realities. This report is the product ofa policy research project conducted in the 2000-2001 academic year with funding from the U.S.-CID! Specific Fund ofthe Organization of American States (GAS) and the William and Flora Hewlett Foundation through the Center for Inter-American Policy Studies at The University ofTexas at Austin. Also participating was the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The purpose ofthe study is to examine the role ofmaritime transportation and seaports in fostering international trade, economic integration, and sustainable development throughout Latin America and the Caribbean. The curriculum ofthe LBJ School is intended not only to develop effective public servants but also to produce research that will enlighten and infonn those already engaged in the policy process. The project that resulted in this report has helped to accomplish the first task; it is our hope that the report itselfwill contribute to the second. Finally, it should be noted that neither the LBJ School, The University ofTexas at Austin, the OAS, nor ECLAC necessarily endorses the views or findings ofthis report. EdwinDorn Dean Xlll xiv Acknowledgments This policy research project could not have been completed without the generous donation oftime and information by hundreds ofindividuals, most especially Dr.