b'4American Journal ofTransportation ajot.com(EXPANSIONcontinued fromA. P. MollerMaersk Group sharePort of Montevideo faces tough page 2) By2016,TCPsmarket partnering with the other. haddroppedto30%to40%,from Some background: For years, gov- upwards of 70% before. Katoen Natiecompetition from regional portsernments in Uruguay wrestled with theconcluded it could no longer compete. future of its main port, located near theIt tried to sell its share but was unsuc- By Matt Miller, AJOTheadwaters of the Rio de la Plata, thecessful.Threeyearslater,Katoen worldswidestriver.(SomeactuallyNatie turned to international arbitra- Montevideos port faces stiff com- eight times as large. Ports are another consider it an estuary or bay.) Montevi- tion and elevated the issue to one ofpetition when it comes to regional trade.matter.BuenosAiresreportsonly deo port had declined considerably inbilateralrelationsbetweenUruguayThats likely to grow over time as biggerabout 1.1 million TEUs annually, and the last decades of the 20th century, itsandBelgium.Meanwhile,anew,vessels ply routes from Asia, Europe andmuch of that is feeder traffic, including aged infrastructure, bloated workforcemore centrist government took powerNorth AmericatoSouth Americaandbarges. In many respects, Buenos Aires and politicized management no matchin Uruguay. will press for fewer ports of call.is far less competitive, and Montevideo for ports beefing up capacity along theKatoenNatiepresenteda$1.5Already,forexample,theentireshouldbeabletogainsomemarket east coast of Brazil. billion bill for its exit. While it neversouthern portion of Argentina relies onshare from its larger neighbor as time In2001,Antwerp-basedKatoenfiled a lawsuit demanding that sum,feeder vessels to either Buenos Aires,goeson,especiallyaslargervessels Natie,thegloballogisticsprovider,thefigurequicklybecamepublicMontevideo, or ports in southern Brazil.become more commonplace.successfully bid on a new Montevi- fodder in assessing the dispute.Likewise,feedervesselsfromeitherBuenos Aires port is plagued with deo container terminal the UruguayanThe arbitration lasted almost twoBuenosAiresorMontevideoservenumerousproblems.Tobeginwith, governmentauctioned.Theconces- years. In May 2021, the two countriesall the river traffic to Paraguay. Thattheres geography. The channel up the sion was for 30 years and promisedannounced an agreement. UruguayskindofcompetitionwillcontinuetoRio Plata is 200 kilometers (124 miles), exclusivity,specificallystatingthattransport minister trumpeted the newheighten. Heres a look at some of theas opposed to 50 kilometers (31 miles) the terminal gets priority for all con- deal in public statements highlight- competing ports and terminals. for Montevideo. And the Buenos Aires tainer traffic, and that the port author- ing not only the investment and portBuenos Aires: The Argentine capi- channelisshallow,only9.7meters itycanonlyassignthisbusinesstoexpansion,butalsoaKatoenNatietal is only about 200 kilometers (124(32 feet). That compares with Monte-others if the terminal cant handle it.concessioninwhichTCPwouldmiles) from Montevideo, on the othervideos planned dredging to 14 meters Under the agreement, the port author- grant preferential rates to some Uru- sideoftheRioPlata. Argentina is a(46feet).Acumbersomebureaucracy ity,theAdministracionNacionalde(EXPANSIONcontinued onmuch bigger market, with 13 times Uru- slows down traffic as well.Puertos, or ANP, became a 20% part- page 6) guays population and an economy about(TOUGHcontinued on page 6)JOC POP. Latin America 2021.pdf 1 5/5/21 5:01 AMner in TCP.Foritspart,KatoenNatiemore than doubled the size of the quay wall, addedstraddlecarriers,andbroughtThe Port of professional management to the port. Inaveryshortperiod,westarted tomodernizethecontainerterminal,Pascagoulaandwithsuccess,saidVandecau-ter, interviewed in his office, an old, colonial-stylebuildingneartheport. We captured more global volume and Montevideo port was on the map again after many decades of going down.Q uAySideQ uAndAryThen, the global economic crisis hit in 2008. Seeking to jumpstart more investmentandgainmorerevenue, the Uruguayan government decided to tender for a second terminal conces-sion. No bids emerged.However, the port authority began to rent space in the public area of the portMexico Caribbeanto Montecon, which became a de facto second container terminal and without a legal base, said Vandecauter.According to Vandecauter, Mon- Central Americatecon easily undercut TCPs business. CThey could do whatever they want. Goods were not only limited to con- M Forest ProductsYtainers,hesaid.Theydonthave maximum rates. They dont haveCM Metalsan MYinvestment obligation. So, they have a completely different cost structure. CY SteelMontecon,ofcourse,portrays CMYwhathappenedtoitinadifferentBulk Cargo South AmericaKlight. In a statement after the 50-year concession extension was announced,Project CargoMonteconsaiditsoperationswere perfectlylegal,asthepublicareaof the port had the right and authority to rent out space. Whats more, it said, the government benefited by the arrange-mentasMonteconpaid ANPmore than $100 million for the use of stor-ageareas,permits,concessionsand containertransferfeesandinvested more than $90 million in port infra-structure, equipment and technology.Thatmaybetrue,butthefact remainsthatMonteconprosperedon the back of public infrastructure, said MichaelKaasnerKristiansen,presi-dent of the maritime consultancy CK Americas, based in Panama. Monte-con was able to compete because it had low cost. It wasnt really fair, he said,PortofPascagoula.compointing out that the terminal Monte-con uses was built with public money.Kaasner Kristiansen for years wasMain Office - 228-762-4041 Miami Office - 305-254-3117based in Montevideo as manager for'