Twenty years ago, Swiss chocolates, French wines, American brands, German beer, Japanese electronics and Indian fabrics were a hard-to-access luxury for Colombians. Today we eat, drink, dress and use products elaborated from the four corners of the world.
More than 90% of the goods consumed daily in the world’s factories, offices and houses, use waterborne transport as part of their journey from manufacturer to consumer — and ports their link to the mainland.
Historically, ports have been more than places where merchandise is loaded and unloaded, but commercial centers that have shaped trade routes and have been shaped by trade dynamics. Merchants have always needed to reach conveniently located ports and ports needed to offer quick and efficient services in order to attract them. We have not strayed far from this necessity with all our modern conveniences, but moving things today is a bit more complex.
The invention of the container in the 1950s led to a revolution in sea transportation followed by a boom of international trade over the following decades. During the second half of the last century, container ships grew in dimension from their 100-container capacity to more than 20,000 causing a redesign of maritime routes, the need for trans-shipment, and a corporate integration of shipping companies.
The expansion of these transoceanic vessels has resulted in lower costs for the client, and higher volumes in the goods moved. To cope with the super transporters, maritime terminals need to be supported by strong infrastructure; the kind that costs and can move billions in raw and finished materials everyday.
Port infrastructure is particularly sensitive to change, and this is shaped by a number of critical factors involving stakeholders, shipping companies, suppliers, financial entities, maritime agents and of course, the manufacturer. These are the private actors.
Then you have national government, local authorities, international trade agencies, foreign governments and non-profit organizations. Social issues also exert an important influence on port efficiency and security.
Then there are the many external factors such as climate change, energy accessibility, geopolitical relationships, the general culture of a country and to top it off, trends in technology.
All these factors are decisive when determining the infrastructure of a terminal and affect the decisions of port operators and their investors.
The Panama Canal expansion program is one of the biggest infrastructure projects in Latin America and will bring bigger ships to these shores with cheaper freights and additional fuel savings given the economies of scale.
However, these mega-ships can only put in at a restricted number of ports capable of receiving them. This has already triggered a costly competition among terminals that serve container ships on the Panama route, including those in the Caribbean and the east coast of the United States.
Close to Panama, Colombia faces both challenges and opportunities with the expansion. On the one hand, the canal opening offers connectivity, an increase in trans-shipment and a chance to consolidate the country as a main hub for the transfer and distribution of international cargo.
On the other hand, it has required — and still requires — huge investment. The acquisition of SuperPostPanamax cranes and latest technology equipment, dredging works for wider and deeper channels to guarantee prompt access to ships, modernization of equipment, more pier and yard infrastructure, civil works, construction of warehouses for the storage of cargo, investment in technology, automation of facilities and training of personnel are some of the efforts Colombia is making to confront the challenge.
This represents a massive demand for Colombian ports, which shall endeavor capacity and productivity, while also having the pressure to cut costs and recover investments made.
In addition to these challenges, ports also need to deal with keeping their clients satisfied. Every day, shipping lines have more specialized requirements that may result in ships intentionally choosing to make a detour from a predetermined route in order to call on a port which is capable of offering higher standards in the services needed.
Because of these fast-changing realities, advanced port management is essential, as is promptness, speed and port operation safety. Additional services such as storage, bigger warehouses and distribution centers become leading factors for shipping companies when choosing which terminal and where. Again, there is a call for more and better infrastructure.
In our scenario, facing these challenges is at the top of the agenda. The bet for Colombia is building the best infrastructure that will enable the country to take full advantage of the opportunities looming with a post-conflict reality.
And not just port infrastructure, but infrastructure which connects the ports with the interior, the highways and river transportation networks capable of uniting a nation of difficult topography.
Progress has been made, but there is a still a long way to go to build and expand key infrastructure which connects our ports with our cities.
Ana Karina Arrazola-Chadid works as corporate affairs lawyer at the Port of Cartagena Organization, Colombia. She graduated with distinction with an LL.M in International Business Law from the University of London, United Kingdom and is currently a member of RedBrit, the U.K. alumni network in Colombia.