ElijahRadioProphet
Thursday, March 04, 2010
The Punta Colonet Multimodal Project
http://www.kcsmartport.com/pdf/SmtPrtOneRoute.pdfPrint Document
Red China Opens NAFTA Ports in Mexico
The Port Authority of San Antonio has been working actively with the Communist Chinese to open and develop NAFTA shipping ports in Mexico.
Red China Opens NAFTA Ports in Mexico
by Jerome R. Corsi
Posted Jul 18, 2006
The Port Authority of San Antonio has been working actively with the Communist Chinese to open and develop NAFTA shipping ports in Mexico.
The plan is to ship containers of cheap goods produced by under-market labor in China and the Far East into North America via Mexican ports. From the Mexican ports, Mexican truck drivers and railroad workers will transport the goods across the Mexican border with Texas. Once in the U.S., the routes will proceed north to Kansas City along the NAFTA Super-Highway, ready to be expanded by the Trans-Texas Corridor, and NAFTA railroad routes being put in place by Kansas City Southern. Kansas City Southern’s Mexican railroads has positioned the company to become the “NAFTA Railroad.â€
Right now, the cost of shipping and ground transportation can nearly double the total cost of cheap goods produced by Chinese and Far Eastern under-market labor. The plan is to reduce those transportation costs by as much as 50% by using Mexican ports.
Cost-savings will be realized by bringing the goods into the U.S. at mid-continent. Equally important is that the substantially reduced cost of using Mexican labor in the ports and to transport the goods once off-loaded. Mexican workers undercut Longshoremen Union port employees on the docks of Los Angeles and Long Beach, just as Mexican truck drivers undercut the Teamsters and Mexican railroad workers undercut United Transportation Union railroad workers. By using the Mexican ports, the international corporations managing this global trade are able to avoid the U.S. labor union workers who otherwise would unload the ships in west coast ports and transport the Asian containers into the heart of America by U.S. truckers or U.S. railroad ground transport moving east across the Rocky Mountains.
In April 2006, officials of the Port Authority of San Antonio traveled to China with representatives of the Free Trade Alliance San Antonio, the Port of Lazaro Cardenas, and Hutchinson Port Holdings to develop the Mexican ports logistics corridor. The goal of the meetings in China was described by the March 2006 e-newsletter of the Free Trade Alliance San Antonio:
"In January of 2006, a collaboration of several logistics entities in the U.S. and Mexico began operation of a new multimodal logistics corridor for Chinese goods entering the U.S. Market. The new corridor brings containerized goods from China on either Maersk or CP Ships service to the Mexican Port of Lazaro Cardenas. There, the containers are off loaded by a new world class terminal operated by Hutchinson Ports based in Hong Kong. The containers are loaded onto the Kansas City Southern Railroad de Mexico where they move in-bound into the U.S. The containers clear U.S. customs in San Antonio, Texas and are processed for distribution.
"Hutchinson Whampoa, a diversified company that manages property development and telecommunications companies, with operations in 54 countries and over 200,000 employees worldwide, is also one of the world’s largest port operators. Hutchinson Ports Holding (HPH) owns Panama Ports Co., which operates the ports of Cristobal and Balboa which are located at each end of the Panama Canal. HPH also operates the industrial deepwater port of Lazaro Cardenas in the Mexican State of Michoacan, as well as the Mexican port at Manzanillo, also along the west coast of Mexico, north of Lazaro Cardenas.
The Free Trade Alliance San Antonio was created in 1994 to promote the development of San Antonio’s inland port. The Free Trade Alliance San Antonio and the Port Authority of San Antonio are both members of NASCO, an acronym for the group’s formal name, the North American’s SuperCorridor Coalition, Inc. A Kansas City Star newspaper article posted on the website of the Kansas City SmartPort, another NASCO member, shows the importance of San Antonio’s inland port to the developing NAFTA Super-Highway and NAFTA railroad corridor emerging along Interstate I-35. According to reporter Rick Alm, San Antonio envisions the opening of a Mexican customs office in their inland port, a move that has been pioneered by Kansas City SmartPort:
"Under this area’s arrangement restablishing a Mexican customs facility in the Kansas City SmartPort], freight would be inspected by Mexican authorities in Kansas City and sealed in containers for movement directly to Mexican destinations with fewer costly border delays. The arrangement would become even more lucrative when Asian markets that shipped through Mexican ports were figured into the mix. “We applaud the efforts of Kansas City and the Mexican government in developing a Mexican customs facility there,†said Jorge Canavati, marketing director for Kelly USA [former name for San Antonio’s inland port established on the former site of Kelly Air Force Base]. He said a Mexican customs function for KellyUSA “is something that is still far away … We may be looking at that†in the future.
A world map on the North American Inland Ports Network (NAIPN) on the NASCO website graphically highlights in yellow the trade routes from China across the Pacific ocean, to Mexico at the ports of Manzanillo and Lazaro Cardenas, entering the U.S. through San Antonio.
A Free Trade Alliance San Antonio 2005 summary of goals and accomplishments documents the direct involvement of the Bush administration into the development of San Antonio’s inland port NAFTA plans. The following were among the bulleted points:
*Organized four marketing trips to Mexico and China to promote Inland Port San Antonio and met with prospects. Met with over 50 prospects/leads during these trips.
*Continued to pursue cross border trucking by advocating a pilot project with at least two major Mexican exporters as potential subjects. Worked with U.S. Department of Transportation, Dept. of Homeland Security and U.S. Trade Representative on this concept.
*Working with Mexican ports to develop new cargo routes through the Ports of Manzanillo and Lazaro Candenas.
*San Antonio is on the route of the Trans-Texas Corridor planned to be built along I-35 from Laredo, Tex., on the Mexican Border, north through Dallas, en route to the Oklahoma border.
The development of a China-Mexico trade route reflects a fundamental shift since the passage of NAFTA. At the peak in the mid-1990s, there were some three thousand maquiladoras located in northern Mexico, employing over 1 million Mexicans in low-paying, assembly sweat-shops. Today, even Mexican labor is not cheap enough for the international corporations seeking only to maximize profits. According to the Federal Reserve Bank of Dallas, that bubble has burst and the maquiladora activity is down over 25 percent from the peak as the international corporations have found even cheaper labor in China.
As the Port of San Antonio evidences, linking NAFTA inland ports with NAFTA super-highways and NAFTA railroads is an important part of the development plan for the emerging global free trade economy. San Antonio officials by working with the communist Chinese to open Mexican ports for NAFTA trade evidence that plan. International capitalists are now determined to exploit cheap Mexican labor, not so much for manufacturing and assembly, but as a means of saving port and transportation costs in the North American market.
The Bush Administration seems on-board with the plan, aiming to increase corporate capital gains in NAFTA markets rather than worrying about the adverse consequences to Mexican low-skilled workers or to the U.S. labor movement that transferring increasing amounts of manufacturing and assembly to China entails. Copyright © 2006 HUMAN EVENTS. All Rights Reserved.
Los Angeles, Long
Beach ports unite on
proposal to fight air
pollution
Updated 6/29/2006 12:33 AM ET
LOS ANGELES — The neighboring seaports of Los
Angeles and Long Beach announced Wednesday a
proposal to crack down on the diesel-powered ships,
trucks and trains that are polluting the air over the
USA's trade gateway to Asia.
Under the proposed five-year cleanup plan, the twin
ports would offer $200 million to owners of 16,000
trucks to replace old rigs with cleaner new ones.
Ships would have to burn cleaner fuel, cut speed
within 40 miles of the harbor and plug into dockside
electrical outlets that are being built. Railroads would
be required to use cleaner locomotives.
The city-owned ports, 20 miles south of downtown
Los Angeles, are the nation's largest. Together they
handle 40% of U.S. cargo-container imports and
account for 600,000 local jobs. They're also a health
hazard as Southern California's "largest fixed source
of air pollution," the South Coast Air Quality
Management District says.
Vessels and vehicles idling at docks spew more
smog-forming nitrogen oxides and cancer-causing
diesel particulates than the metropolitan area's 6
million cars, the district says. Residents of nearby
neighborhoods have high rates of respiratory illness
and the region's highest cancer risk, according to the
California Air Resources Board.
The cleanup plan aims to reduce diesel particulates
nearly 50% and nitrogen oxides 30% by 2011. Arley
Baker, spokesman for the Port of Los Angeles, says
the regulations could be a pattern for other ports.
Houston and Shanghai also are grappling with air
pollution problems, says Geraldine Knatz, the Los
Angeles port's executive director.
The Los Angeles and Long Beach ports are landlords
for shipping companies that operate cargo terminals.
The cities compete for shippers' business. Their top
port officials were so mistrustful of each other that
until last January they hadn't held a joint meeting
since 1929, says S. David Freeman, president of the
Port of Los Angeles Harbor Commission.
The ports have had separate, uncoordinated
pollution-reduction programs, posing a risk that
dirtier ships would choose the port with lower
standards, Freeman says. "United, there ain't no place
for these shippers to go," he says.
Barraged with lawsuits by environmental groups and
neighbors, the ports united on the cleanup so the
courts will let them expand to handle a projected
tripling of trade by 2020, Freeman says. "The port is
Hundreds of shipping containers move in a train at the Port of Los Angeles. A five-year plan proposed by neighboring seaports in California would require railroads to use cleaner locomotives and ships to burn cleaner fuel.
By Reed Saxon, AP
Hundreds of shipping containers move in a train at the Port of Los Angeles. A five-year plan proposed by neighboring seaports in California would require railroads to use cleaner locomotives and ships to burn cleaner fuel.
one of the largest sources of decent-paying jobs
around here, and it can't grow unless we smash the
pollution," he says.
Some shipping companies here complain that the new
regulations will raise operating costs and make them
less competitive with other U.S. and Mexican ports,
Knatz says. "We tell them we have no alternative.
Development will let customers grow their business
and use the revenue to pay for meeting the emissions
standards."
Freeman says consumers of imported goods won't be
socked with higher prices. The "impact on the
delivery price of television sets and tennis shoes is
essentially de minimis," he says.
The plan disclosed Wednesday is a draft that could be
revised after 30 days of public hearings. A final plan
goes to port commissioners in September.
Port of Punta Colonet, Mexico
Mexico's government is preparing to open bidding on the largest infrastructure project in the nation's history, a $4-billion seaport that could transform this farming village into a cargo hub to rival the ports of Los Angeles and Long Beach.
If completed as planned by 2014, the port would be the linchpin of a new shipping route linking the Pacific Ocean to America's heartland. Vessels bearing shipping containers from Asia would offload them here on Mexico's Baja peninsula, about 150 miles south of Tijuana, where they would be whisked over newly constructed rail lines to the United States.
The massive development, which is to be privately funded, is attracting interest from heavyweights such as Mexican billionaire Carlos Slim Helu. The world's second-richest man is part of a consortium planning an "aggressive" run at the project, according to Miguel Favela, general director of Mexican operations for cargo terminal operator MTC Holdings of Oakland.
Favela said MTC had teamed up with Slim's IDEAL infrastructure company and Mexican mining and railroad giant Grupo Mexico in an effort to nab the 45-year concession.
Mexico's transportation secretariat will release the request for proposal in June and hopes to select a winner by summer 2009, Subsecretary Manuel Rodriguez Arregui said in an interview earlier this month.
Competition promises to be fierce. Hong Kong-based Hutchison Port Holdings, a major port developer and operator whose parent company is chaired by billionaire Li Ka-Shing, said it planned to study the bid documents. So will terminal operators SSA Marine of Seattle and Dubai's DP World.
Ditto for railroads Union Pacific Corp. of Omaha and Fort Worth-based BNSF Railway Co. Several companies had previously expressed interest in the deal but backed off after repeated delays in the launch of the bidding.
"All the major players . . . they'll be here," said a confident Rodriguez Arregui, who will oversee the selection process.
The Punta Colonet proposal will be structured as a joint port and rail project, requiring terminal operators, railroads and construction companies to join forces to win the deal. Hutchison and Union Pacific had formed an earlier alliance that dissolved last year. Sources said SSA had partnered with leading Mexican construction firm Empresas ICA. Those companies declined to comment about their arrangement.
Rodriguez Arregui said Mexico would choose the group that could guarantee the most volume, and he estimated the facility would be capable of handling a minimum of 2 million containers annually at start-up.
The prospect of billionaires duking it out over this remote stretch of Baja underscores just how lucrative the movement of goods between Asia and North America has become. About 30 million containers crossed the Pacific last year, a flow that had been increasing by about 10% annually for more than a decade until recently. And, though transpacific trade has slowed because of weakness in the U.S. economy, experts said those figures would continue to grow over time.
With the West Coast's largest port complex, L.A.-Long Beach, constrained by urban development and environmental regulations, shippers are searching for alternatives.
Punta Colonet has emerged as an attractive option. It's close to the United States. It possesses a wide, natural harbor. And it's located in a rural, lightly populated area offering almost unlimited room for expansion.
"In the long run . . . it could get to the size of Long Beach-L.A.," which last year handled 15.7 million containers combined, Favela said. "Without a doubt, this is one of the biggest green-field projects ever to be done" in the industry.
The plan is nothing if not ambitious. Punta Colonet would be the first major seaport built in North America in nearly a century.
The harbor would have to be dredged and protected with breakwaters. The rail links could prove costly and complicated. Hundreds of miles of new track must be laid in Mexico.
But the ultimate route and U.S. crossing points would depend on which railroad snared the deal and how it would link up with existing networks on both sides of the border.
Mexico's transportation secretariat estimates the winning consortium will have to invest at least $4 billion to get the project launched.
Some industry experts are skeptical. Dubbed the "Port of Illusion" by one Baja newspaper, Punta Colonet has been plagued by legal squabbles and other setbacks since it was first proposed in 2004. While Mexico dithered, competitors forged ahead.
Panama is in the midst of a $5.3-billion expansion of its landmark canal. Canada, whose coast is the shortest sailing distance from Asia, is looking to capitalize on that advantage with $3 billion in port and rail improvements to speed cargo to the United States.
Ports along the West, East and Gulf coasts of the U.S. have begun their own upgrades. So has Mexico's own Puerto Lazaro Cardenas on the Pacific Coast of the state of Michoacan.
"The logic for [Punta Colonet] is not as strong now," said Asaf Ashar, research professor with the National Ports and Waterways Institute in Washington. But others insist there will be plenty of boxes to go around. The Punta Colonet project could be especially appealing to U.S. railroad interests, which don't want to lose business to Canada or Panama.
Union Pacific owns a 25% stake in the Mexican railroad firm Ferromex, which is part of Grupo Mexico. And it controls the U.S. side of the tracks at half a dozen key border crossings from Calexico, Calif., to Brownsville, Texas, making it an obvious contender.
Union Pacific spokeswoman Zoe Richmond said the company was waiting to see the Mexican government's request for proposal. She wouldn't comment on whether the railroad was contemplating renewing its partnership with Hutchison or joining a new consortium to bid on Punta Colonet.
Some industry veterans say Mexico's timetable may be overly aggressive and that its insistence on awarding the contract as a package deal rather than divvying it up into separate infrastructure, port operation and railroad pieces will make a complex project even more unwieldy.
Mexico has a spotty track record when it comes to executing big public-works projects on time, on budget and with top-flight quality. Much is riding on the outcome.
"What's at stake here is much more than the project itself," Rodriguez Arregui said. "It's our capacity to show the world that we can do big things."
Not everyone is likely to share his enthusiasm.
A new Baja port could dilute the power of Southern California's unionized longshoremen, whose muscle depends in part on shippers having few options on the West Coast. Surfers will lose a prized spot for catching waves near Punta Colonet. Environmentalists are already worried about potential destruction of some of the area's unique plants and sea creatures.
Mexico plans huge Baja port for U.S. trade
Calderon will open bidding for infrastructure contracts Thursday. The project is likely to transform the village of Punta Colonet.
By Marla Dickerson
August 28, 2008
Mexico's government is setting sail with the largest infrastructure project in the nation's history, a $4-billion seaport that it hopes will one day rival those of Los Angeles and Long Beach.
President Felipe Calderon is scheduled to travel to northern Baja California today to open bidding on a development that his administration hopes will catapult Mexico into a major player in North American logistics.
Plans call for the construction of a massive port in the tiny coastal village of Punta Colonet, about 150 miles south of Tijuana, along with new rail lines to whisk Asian-made goods north to the United States. Mexico's aim is to snatch some Pacific cargo traffic from Southern California's ports, whose growth is constrained by urban development and environmental concerns.
Punta Colonet is expected to have a capacity of 2 million shipping containers annually when it opens in 2014, Mexico's transportation secretariat told The Times But officials envision it ultimately handling five times that amount. Last year, the ports of L.A. and Long Beach handled 15.7 million containers combined.
The massive development is to be privately funded, with the first phase estimated to cost between $4 billion and $5 billion. The government is expected to award the 45-year concession in 2009.
A number of major players are expected to vie for the project, including Mexican billionaire Carlos Slim Helu, the world's second-richest man. Slim's infrastructure company, known as Ideal, has teamed with Mexican mining and railroad giant Grupo Mexico and New Jersey-based terminal operator Ports America Group to make a run at the deal.
"We've spent a lot of years working on this," said Miguel Favela, head of Mexican operations for Ports America. "It's going to make Mexico _ much more competitive."
About 30 million shipping containers crossed the Pacific Ocean last year, a flow that increased about 10% annually in the last decade. A weak U.S. economy has slowed the trade, but experts predict it will rebound.
With shippers increasingly worried about congestion at L.A.-Long Beach, Punta Colonet has emerged as an attractive alternative. It's close to the United States. It possesses a wide, natural harbor. And it’s in a lightly populated area offering almost unlimited room for expansion.
When Calderon visits the dusty hamlet of about 2,500 people today, he is expected to talk about the big changes in store. The village will need extensive upgrades to its roads, housing, electrical grid and water supply. State and local officials are planning for a city of about 200,000 to spring up around the port.
The changes envisioned are alarming environmentalists, who worry about the potential destruction of the area's plants and wildlife. But the farmers who scratch out a living there are thrilled at the prospect of a big payday.
"What we need is employment for our kids," said Jesus Lara, representative of several peasant landowner groups that are eager to sell. "Everyone is excited. Having the president come your town is like winning the Lotto."
But whether Punta Colonet turns out to be lucrative for Mexico won't be known for years. Competitors up and down the Pacific coast are in the midst of major upgrades. Panama has begun a $5.3-billion expansion of its landmark canal. Canada’s Prince Rupert port in British Colombia began speeding containers to the American heartland by rail last year and is planning a major expansion.
Little of the cargo bound for Punta Colonet will stay in Mexico, making the port vulnerable to the whims of shippers, who can choose other routes to the United States.
"Nothing is guaranteed," said Asaf Ashar, research professor with the National Ports and Waterways Institute in Washington. "It's a big risk."
Building a seaport from scratch would be difficult enough. But the overland transportation piece is likely to make or break Punta Colonet. The deal is being structured as a joint port-and-rail project, requiring terminal operators, railroads and construction companies to team up in consortia to win the bid. The railroad’s ultimate route and U.S. crossing points will depend on which railway operator is chosen and how it manages to link up with existing rail networks on both sides of the border.
Union Pacific Corp. of Omaha and Forth Worth-based BNSF Railway Co. control the U.S. side of the tracks at most of the key U.S.-Mexico border crossings. Striking a deal with one of those companies to get the cargo to the American side will be crucial, said Paul Bingham, managing director of the global trade and transportation practice for Global Insight, a Massachusetts-based consulting firm.
"They have the ability to essentially choke off that port," Bingham said.
BNSF spokesman Patrick Hiatte said Wednesday that the company was "very interested" in the Punta Colonet project. He declined to say with whom the firm might collaborate to make a bid.
Union Pacific could not be reached for comment. The company earlier had teamed with Hong Kong-based Hutchison Port Holdings to make a run at the project, but that alliance dissolved last year.
marla.dickerson@latimes.com
Lloyd's List
Mexico's $5bn Colonet project launched
Rainbow Nelson - Friday 29 August 2008
MEXICAN president, Felipe Calderon, has given his official blessing to one of the most eagerly-awaited intermodal projects in Latin America, Punta Colonet.
The Mexican government has compared the $5bn port and rail project to the widening of the Panama Canal, placing it at the heart of its infrastructure program for the next five years.
Mr Calderon, speaking at the official launch of the ambitious scheme, said it was “the largest infrastructure project” of his administration “for now” and that it was without doubt the “most important port project in Mexico for many years”.
“To give you an idea of the magnitude of the project only the land area of the port is four times bigger than the Port of Los Angeles and represents more than five times he Port of Long Beach in California,” he said.
Initial designs of the project, were released by Luis Tellez, secretary for communications and transport.
The Punta Colonet Multimodal Project will house a single container terminal with 32 berthing positions and a land area of 700 hectares. All told the complex boasts 5,300 hectares including 2,600 hectares of coastline. As well as plans for a port and rail link there are proposals to build an air cargo facility at a cost of $226m.
The port, to be built at an estimated cost of $1.1bn, will be connected to the US hinterland by one or two rail lines that will stretch more than 150 km to Mexicali, Yuma, Nogales or El Paso to link up to the US rail network. The rail element of construction is valued at around $2bn. Public utilities including a power plant, roads and water treatment facilities will all need to be constructed taking the total cost to almost $5bn.
Bid documents will be released next week outlining the process in which the port and the rail link will be built and operated by the private sector.
A new port authority will be established to oversee activity when it has been constructed. It is estimated that it will generate up to $500m a year for the Baja California region.
All the major port operators, including Hutchison Port Holdings, SSA Marine, Ports America Group, DP World, APM Terminals, PSA Corp, Cosco Group and the largest rail operators in Mexico, Ferromex and Kansas City Southern, have been working on plans to turn the facility into an alternative gateway to ports on the US west coast.
Mr Tellez said: “Once it is in operation the port will move 6m containers a year, double that moved in the entire port system today.”
The first phase of construction is scheduled for completion within three years of the concession being awarded sometime in 2009. When fully developed, volumes will be five times that of Mexico’s largest container port Manzanillo and ten times that of Veracruz, the largest port on the Gulf Coast.
Access to the US market holds considerable appeal to international operators such as DP World, PSA Corp and Hutchison Port Holdings, which to date have been reluctant or unable to establish US operations due to the high cost of US labour or restrictions imposed in Washington on foreign ownership of US terminals.
Article from Lloyd's List:
www.lloydslist.com/art/20017566232
Published: 29/08/2008 GMT
© 2010 Informa plc. All rights Reserved. Lloyd's is the registered trademark of the Society incorporated by the Lloyd's Act 1871 by the name of Lloyd's
West Coast ports fearing growing competition
Les Blumenthal
WASHINGTON – Struggling to ride out the recession, West Coast ports face new competition as ports in Canada and Mexico, an expanded Panama Canal and even the Suez Canal could steal away some of the cross-Pacific shipping they’ve relied on.
More than 70 percent of Asian goods imported into the U.S. – everything from toys to electronics to autos – pass through the ports of Los Angeles, Long Beach, Oakland, Seattle, Tacoma and Portland.
The directors of the ports, in a first-ever joint visit, were on Capitol Hill last week seeking billions of dollars and a federal commitment to improve rail corridors necessary to speed the goods east.
“We need a well-thought-out, strategic freight policy,” said Tim Farrell, executive director of the Port of Tacoma. “We need to focus on corridors from Shanghai to Chicago or Tokyo to Houston. We are just getting started, but the West Coast ports generate more jobs than the Big Three automakers.”
The looming clash over Asian shipping routes is part geography lesson, part the dreams of naval architects as they design ultra-large cargo ships, and part a short course in shipping economics – all of it overlaid with concerns about greenhouse gas emissions.
Canada is already developing a national shipping strategy utilizing the Port of Vancouver and a new port at Prince Rupert, 900 miles north of Vancouver. Prince Rupert is roughly a day closer to Shanghai by freighter, and the trains from there to Chicago and other Midwest cities encounter fewer bottlenecks than eastbound trains from the U.S. West Coast.
Mexico announced plans to build a mega-port at Punta Colonet on the Baja Peninsula and has expressed interest in Southwest markets. The existing Mexican ports handle cargo mostly for domestic consumption. However, rail times from the Mexican ports to Houston would be shorter than those from U.S. West Coast ports.
Come 2014, a new set of locks in the Panama Canal will be completed, capable of handling container ships nearly double the size of those now using the canal. The large container ships could bypass West Coast ports entirely and head directly to the East Coast.
However, the biggest drawback to using the Panama Canal might be the fees it charges. Even now, those can range up to $250,000 for a large car carrier. Some shippers sail around Cape Horn at the tip of South America rather than pay.
Goods from countries west of Singapore, such as India and Bangladesh, often come through the Suez Canal on their way to the U.S. East Coast. Though the canal doesn’t have locks, tolls and fees can run into the hundreds of thousands of dollars.
“In the very long term, all of these gateways will be needed,” Bingham said. The key for West Coast ports will be improved rail service to the East, he said. “They have to be very proactive.”
At the heart of the congressional lobbying campaign by port directors was the reauthorization of the five-year Surface Transportation Act, which includes highways, roads, mass transit and the movement of freight. The current bill expires later this year.
The ports want the bill to include a greater emphasis on the freight rail corridors from the West Coast to eastern markets.
The funding would help augment improvements railroads are making already, including new track, upgraded signals and new or expanded yards.
Les Blumenthal: 202-383-0008 lblumenthal@mcclatchydc.com
1950 South State Street, Tacoma, Washington 98405 253-597-8742
© Copyright 2010 Tacoma News, Inc. A subsidiary of The McClatchy Company
Read more: http://www.thenewstribune.com/2009/06/28/v-lite/793988/west-coast-ports-fearing-growing.html#ixzz0hEmuPoYC
CANAMEX Corridor Opens New Options for Trade with Asia
Published: May 24, 2006 in Knowledge@W.P. Carey
The topic of international trade these days mostly conjures thoughts of expanding Asian markets and Middle Eastern oil, but one route to prosperity in the global marketplace runs right through Arizona: It is the Canada-American-Mexico Corridor.
The CANAMEX Corridor of Innovation initiative has been working in recent years to plan improvements to public and private shipping, rail, highway and inspection facilities through a multistate cooperative of Arizona, Nevada, Utah and Idaho. Now, most truck and freight train traffic in Arizona goes east and west. CANAMEX (aka "Smart Corridor") has the potential to free up north-south trade in North America and more efficiently reach out to the Far East.
CANAMEX can expand trade to more markets by easing bottlenecks, according to experts at Arizona State University and the W. P. Carey School of Business. Stepped-up trade with China, Japan and other Asian nations has made Los Angeles-area ports so busy that CANAMEX planners are looking south for easier access to Pacific Ocean steamship lines.
One route runs through Guaymas, Mexico, which is on the Gulf of California, about 200 miles south of the Arizona-Mexico border city of Nogales. A recent Arizona Department of Transportation report, "Logistics Capacity Study of the Guaymas-Tucson Corridor," concluded that the Port of Guaymas, "with some minor improvements, such as the acquisition of additional container-moving equipment, is ready to start a container service comparable to other Mexican regional ports, such as the Port of Mazatlan [much farther to the south on Mexico's Gulf of California coast] and Ensenada [on the Baja peninsula]."
CANAMEX appeal growing
"The problems caused by the congestion of the ports of Long Beach and Los Angeles have caused companies to look for other alternatives such as the corridor between Guaymas and Tucson," says J. Rene Villalobos, associate professor of industrial engineering at ASU's Ira A. Fulton School of Engineering and a co-author of the Guaymas-Tucson corridor study. Although the CANAMEX Corridor may not be a household name among the general public, Villalobos says people in international business are familiar with the corridor, a concept started in 1995.
Despite the surge in fuel and transport prices, trade with Asian partners still makes sense, Villalobos says: "The increase in transportation prices certainly makes places that are close by more attractive for trade. However, the transportation costs with the Far East countries are still very competitive because of the prices offered by the steamship companies. It depends on the commodity."
Improvements to border-crossing facilities in Nogales and to the infrastructure of Guaymas are vital, according to Arnold Maltz, associate professor of supply chain management at the W. P. Carey School of Business and a co-author of "Logistics Capacity Study of the Guaymas-Tucson Corridor." That study says the main limitation of Guaymas' port capacity is the lack of quay cranes, which are land-based cranes that lift cargo to and from ships.
"This precludes the Port of Guaymas from being able to offer efficient turnaround services to modern container ships that are not geared with their own cranes," the study states. "In order to provide this service we believe that at least two quay cranes are needed, since just one quay crane would not provide enough capacity to make the loading and unloading of containers from the vessels more expedient."
The exact capacity and characteristics of the quay cranes and related issues, the authors state, are a suitable subject for a future study. The Mexican government is providing funds for follow-up studies, Villalobos says. Although Guaymas has adequate rail and highway connections through Mexico to Arizona, the study says the Port of Guaymas lacks a regularly scheduled container service, which railroads need to utilize the corridor's potential.
"While the analysis of the requirements to attract a major shipping line to the port was beyond the scope of this study, we believe that the geographical position of Guaymas may be an issue to attract, in the short term, a company to provide direct service to Asia," the authors wrote. "We believe that the railroad companies are indispensable for the creation of an economically feasible container corridor between the Port of Guaymas and Arizona. Thus, these companies must be encouraged to take an active role in the activation of a container service in the Corridor."
New ports eyed for China trade
"It has always been my understanding that the issues at Guaymas are facilities," says Tracy Clark, an economist with the Bank One Economic Outlook Center at the W. P. Carey School. "They have been working on those issues. L.A. is close to maxed out. If there is an alternate port with good land transport connections, it will be used ... There [is] not enough capacity on the West Coast as a result of the ramp-up of the China economy."
The study says improvements also will be needed for the Nogales inspection compound, known as the Mariposa Port of Entry, which every commercial motor vehicle entering the United States at Nogales must go through. Upgrades also will be needed for railroad inspection procedures on the U.S. side of the border. The study says the maximum number of trucks that can be processed daily at Mariposa POE under current operation conditions is around 1,500.
"Considering a current demand of up to 1,300 per day: It can only serve 200 trucks extra per day" before waiting times would be significantly increased, the study states. "Due to inspection time requirements and railroad operations in Nogales, currently only up to eight trains per day can cross the border, which means only one additional northbound train per day can send through the corridor."
The study found no significant point of congestion along Mexico's Federal Highway 15, which links Guaymas and Nogales, but a segment of Interstate 19 that connects with Interstate 10 in Tucson is at capacity or near capacity during rush times.
CANAMEX Corridor initiatives might warrant some cautious optimism for trade within North America and an easing of the U.S.-Mexico immigration issue, although trade with Asia is expected to continue to accelerate despite higher petroleum prices.
"CANAMEX is a route to expanding markets, not shifting trade between areas," Clark cautions. "Asian trade will continue to expand because of rising standards of living in China and continued low cost. Asian trade in high-value, low weight/volume items like computer chips goes by air, and has to go to Asia because that is where the assembly plants are located. Asian trade in low-value, high-weight/volume stuff [the things made out of the computer chips] goes by boat or not at all. The biggest barrier to expanding trade with Asia is the lack of port capacity, not fuel prices."
Clark says Mexican employment was hit hard as China became the low-cost producer. "I suppose that energy prices or wages in China might rise enough to help Mexico regain some of that lost business. However at current energy prices and wages China is still cheaper," he says.
A 'borderless economy'?
Many Mexican workers who lost jobs at maquiladoras -- manufacturing plants near the U.S. border which assemble finished goods out of U.S.-supplied parts and resources -- are among the millions now working low-wage jobs in the United States. Mexican-government incentives for the maquiladora program, initiated by the then-ruling Institutional Revolutionary Party (PRI) around 1968, have expired, prompting many Mexican workers to cross into the U.S. One of the stated goals of the CANAMEX Smart Corridor organization is "facilitating provision of professional services in the region through common registration and licensing, which contribute to the creation of a 'borderless economy.'"
How can the CANAMEX goal of a "borderless economy" be squared with the controversy over illegal immigration?
"You can't have it both ways," Maltz says. "But what CANAMEX is about is encouraging development in Mexico, which will make the opportunities greater down there and thus decrease the attraction of illegal crossing. ... This is on the table for many companies right now. Mexico claims to have regained some business, and Motorola has made Nogales a major manufacturing center."
"There is some tension there," Clark says of the immigration issue and CANAMEX goals, "but just as with the fear that bombs will be imported through a port facility, inspection is the answer. We will never have borderless [trade] in the same sense we do between states. I don't think illegal immigration will prevent either trade or somewhat freer movement of goods, although it may delay things just as 9/11 fears set things back at the Canada-U.S. border."
And, although most of the CANAMEX emphasis has been southward, there are issues involving our neighbors to the north.
"There are transportation challenges on the Canadian side," says Dawn McLaren, research economist with the W. P. Carey School of Business. "I've heard from some shippers that it is better to use the old quota system than NAFTA because of the bureaucracy involved."
McLaren describes the CANAMEX Corridor as a "fairly new" concept. "The difficulty is that Mexico borders the southwest United States, and the industrial areas of Canada are in the east [Ontario]. As Alberta comes onto the map with the oil sands, however, that could change quite a bit."
Although second only to the Saudi Arabian reserves, Alberta's oil sands, formerly known as tar sands, are thick and require special extraction and refining methods. Still, oil sand has come to represent about half of Canada's total crude oil output. "As the technology to extract oil from the sands is developed, it becomes more important," McLaren says.
And, although Canada and Mexico export more oil than they use, she notes, "Neither Mexico's nor Canada's oil is of the grade found in the Middle East." Regardless of such complications, the development of the CANAMEX Corridor will aid the flow of oil and other resources and products, which could unify and strengthen the North American economy, including its balance of trade with Asia.
"In my opinion, the existence of an efficient CANAMEX Corridor would make the production and acquisition of some products from Mexico more attractive than getting those products from China," Villalobos says. "Also, very often products produced in Mexico are either based on U.S. raw materials or are finished in the U.S. For every dollar that Mexico imports, around 55 cents are from the USA; for every dollar that China imports, about 8 cents come from the USA. Thus, if the [logistical] efficiency of the Corridor increases, it should, in the mid to long term, have a positive impact [maybe minor] on reducing the U.S. trade deficit."
Among the CANAMEX goals:
* About $4 billion worth of highway improvements are planned and programmed, including the Hoover Dam bypass, which is under way. Smart Process Partnerships in which all five CANAMEX states -- Arizona, Utah, Idaho, Nevada and Montana -- create efficiency and savings for government, businesses and individuals.
* Telecommunications access for rural areas where broadband is lacking.
* A shared Information Technology System (ITS) that could be used by everyone from freight shippers to tourists.
* Accelerating access to e-government services for business registrations and license renewals.
* An interoperable Digital Signature program for CANAMEX states to coordinate a single set of standards for secure electronic commercial transactions.
Red China Opens NAFTA Ports in Mexico
The Port Authority of San Antonio has been working actively with the Communist Chinese to open and develop NAFTA shipping ports in Mexico.
Red China Opens NAFTA Ports in Mexico
by Jerome R. Corsi
Posted Jul 18, 2006
The Port Authority of San Antonio has been working actively with the Communist Chinese to open and develop NAFTA shipping ports in Mexico.
The plan is to ship containers of cheap goods produced by under-market labor in China and the Far East into North America via Mexican ports. From the Mexican ports, Mexican truck drivers and railroad workers will transport the goods across the Mexican border with Texas. Once in the U.S., the routes will proceed north to Kansas City along the NAFTA Super-Highway, ready to be expanded by the Trans-Texas Corridor, and NAFTA railroad routes being put in place by Kansas City Southern. Kansas City Southern’s Mexican railroads has positioned the company to become the “NAFTA Railroad.â€
Right now, the cost of shipping and ground transportation can nearly double the total cost of cheap goods produced by Chinese and Far Eastern under-market labor. The plan is to reduce those transportation costs by as much as 50% by using Mexican ports.
Cost-savings will be realized by bringing the goods into the U.S. at mid-continent. Equally important is that the substantially reduced cost of using Mexican labor in the ports and to transport the goods once off-loaded. Mexican workers undercut Longshoremen Union port employees on the docks of Los Angeles and Long Beach, just as Mexican truck drivers undercut the Teamsters and Mexican railroad workers undercut United Transportation Union railroad workers. By using the Mexican ports, the international corporations managing this global trade are able to avoid the U.S. labor union workers who otherwise would unload the ships in west coast ports and transport the Asian containers into the heart of America by U.S. truckers or U.S. railroad ground transport moving east across the Rocky Mountains.
In April 2006, officials of the Port Authority of San Antonio traveled to China with representatives of the Free Trade Alliance San Antonio, the Port of Lazaro Cardenas, and Hutchinson Port Holdings to develop the Mexican ports logistics corridor. The goal of the meetings in China was described by the March 2006 e-newsletter of the Free Trade Alliance San Antonio:
"In January of 2006, a collaboration of several logistics entities in the U.S. and Mexico began operation of a new multimodal logistics corridor for Chinese goods entering the U.S. Market. The new corridor brings containerized goods from China on either Maersk or CP Ships service to the Mexican Port of Lazaro Cardenas. There, the containers are off loaded by a new world class terminal operated by Hutchinson Ports based in Hong Kong. The containers are loaded onto the Kansas City Southern Railroad de Mexico where they move in-bound into the U.S. The containers clear U.S. customs in San Antonio, Texas and are processed for distribution.
"Hutchinson Whampoa, a diversified company that manages property development and telecommunications companies, with operations in 54 countries and over 200,000 employees worldwide, is also one of the world’s largest port operators. Hutchinson Ports Holding (HPH) owns Panama Ports Co., which operates the ports of Cristobal and Balboa which are located at each end of the Panama Canal. HPH also operates the industrial deepwater port of Lazaro Cardenas in the Mexican State of Michoacan, as well as the Mexican port at Manzanillo, also along the west coast of Mexico, north of Lazaro Cardenas.
The Free Trade Alliance San Antonio was created in 1994 to promote the development of San Antonio’s inland port. The Free Trade Alliance San Antonio and the Port Authority of San Antonio are both members of NASCO, an acronym for the group’s formal name, the North American’s SuperCorridor Coalition, Inc. A Kansas City Star newspaper article posted on the website of the Kansas City SmartPort, another NASCO member, shows the importance of San Antonio’s inland port to the developing NAFTA Super-Highway and NAFTA railroad corridor emerging along Interstate I-35. According to reporter Rick Alm, San Antonio envisions the opening of a Mexican customs office in their inland port, a move that has been pioneered by Kansas City SmartPort:
"Under this area’s arrangement restablishing a Mexican customs facility in the Kansas City SmartPort], freight would be inspected by Mexican authorities in Kansas City and sealed in containers for movement directly to Mexican destinations with fewer costly border delays. The arrangement would become even more lucrative when Asian markets that shipped through Mexican ports were figured into the mix. “We applaud the efforts of Kansas City and the Mexican government in developing a Mexican customs facility there,†said Jorge Canavati, marketing director for Kelly USA [former name for San Antonio’s inland port established on the former site of Kelly Air Force Base]. He said a Mexican customs function for KellyUSA “is something that is still far away … We may be looking at that†in the future.
A world map on the North American Inland Ports Network (NAIPN) on the NASCO website graphically highlights in yellow the trade routes from China across the Pacific ocean, to Mexico at the ports of Manzanillo and Lazaro Cardenas, entering the U.S. through San Antonio.
A Free Trade Alliance San Antonio 2005 summary of goals and accomplishments documents the direct involvement of the Bush administration into the development of San Antonio’s inland port NAFTA plans. The following were among the bulleted points:
*Organized four marketing trips to Mexico and China to promote Inland Port San Antonio and met with prospects. Met with over 50 prospects/leads during these trips.
*Continued to pursue cross border trucking by advocating a pilot project with at least two major Mexican exporters as potential subjects. Worked with U.S. Department of Transportation, Dept. of Homeland Security and U.S. Trade Representative on this concept.
*Working with Mexican ports to develop new cargo routes through the Ports of Manzanillo and Lazaro Candenas.
*San Antonio is on the route of the Trans-Texas Corridor planned to be built along I-35 from Laredo, Tex., on the Mexican Border, north through Dallas, en route to the Oklahoma border.
The development of a China-Mexico trade route reflects a fundamental shift since the passage of NAFTA. At the peak in the mid-1990s, there were some three thousand maquiladoras located in northern Mexico, employing over 1 million Mexicans in low-paying, assembly sweat-shops. Today, even Mexican labor is not cheap enough for the international corporations seeking only to maximize profits. According to the Federal Reserve Bank of Dallas, that bubble has burst and the maquiladora activity is down over 25 percent from the peak as the international corporations have found even cheaper labor in China.
As the Port of San Antonio evidences, linking NAFTA inland ports with NAFTA super-highways and NAFTA railroads is an important part of the development plan for the emerging global free trade economy. San Antonio officials by working with the communist Chinese to open Mexican ports for NAFTA trade evidence that plan. International capitalists are now determined to exploit cheap Mexican labor, not so much for manufacturing and assembly, but as a means of saving port and transportation costs in the North American market.
The Bush Administration seems on-board with the plan, aiming to increase corporate capital gains in NAFTA markets rather than worrying about the adverse consequences to Mexican low-skilled workers or to the U.S. labor movement that transferring increasing amounts of manufacturing and assembly to China entails. Copyright © 2006 HUMAN EVENTS. All Rights Reserved.
Los Angeles, Long
Beach ports unite on
proposal to fight air
pollution
Updated 6/29/2006 12:33 AM ET
LOS ANGELES — The neighboring seaports of Los
Angeles and Long Beach announced Wednesday a
proposal to crack down on the diesel-powered ships,
trucks and trains that are polluting the air over the
USA's trade gateway to Asia.
Under the proposed five-year cleanup plan, the twin
ports would offer $200 million to owners of 16,000
trucks to replace old rigs with cleaner new ones.
Ships would have to burn cleaner fuel, cut speed
within 40 miles of the harbor and plug into dockside
electrical outlets that are being built. Railroads would
be required to use cleaner locomotives.
The city-owned ports, 20 miles south of downtown
Los Angeles, are the nation's largest. Together they
handle 40% of U.S. cargo-container imports and
account for 600,000 local jobs. They're also a health
hazard as Southern California's "largest fixed source
of air pollution," the South Coast Air Quality
Management District says.
Vessels and vehicles idling at docks spew more
smog-forming nitrogen oxides and cancer-causing
diesel particulates than the metropolitan area's 6
million cars, the district says. Residents of nearby
neighborhoods have high rates of respiratory illness
and the region's highest cancer risk, according to the
California Air Resources Board.
The cleanup plan aims to reduce diesel particulates
nearly 50% and nitrogen oxides 30% by 2011. Arley
Baker, spokesman for the Port of Los Angeles, says
the regulations could be a pattern for other ports.
Houston and Shanghai also are grappling with air
pollution problems, says Geraldine Knatz, the Los
Angeles port's executive director.
The Los Angeles and Long Beach ports are landlords
for shipping companies that operate cargo terminals.
The cities compete for shippers' business. Their top
port officials were so mistrustful of each other that
until last January they hadn't held a joint meeting
since 1929, says S. David Freeman, president of the
Port of Los Angeles Harbor Commission.
The ports have had separate, uncoordinated
pollution-reduction programs, posing a risk that
dirtier ships would choose the port with lower
standards, Freeman says. "United, there ain't no place
for these shippers to go," he says.
Barraged with lawsuits by environmental groups and
neighbors, the ports united on the cleanup so the
courts will let them expand to handle a projected
tripling of trade by 2020, Freeman says. "The port is
Hundreds of shipping containers move in a train at the Port of Los Angeles. A five-year plan proposed by neighboring seaports in California would require railroads to use cleaner locomotives and ships to burn cleaner fuel.
By Reed Saxon, AP
Hundreds of shipping containers move in a train at the Port of Los Angeles. A five-year plan proposed by neighboring seaports in California would require railroads to use cleaner locomotives and ships to burn cleaner fuel.
one of the largest sources of decent-paying jobs
around here, and it can't grow unless we smash the
pollution," he says.
Some shipping companies here complain that the new
regulations will raise operating costs and make them
less competitive with other U.S. and Mexican ports,
Knatz says. "We tell them we have no alternative.
Development will let customers grow their business
and use the revenue to pay for meeting the emissions
standards."
Freeman says consumers of imported goods won't be
socked with higher prices. The "impact on the
delivery price of television sets and tennis shoes is
essentially de minimis," he says.
The plan disclosed Wednesday is a draft that could be
revised after 30 days of public hearings. A final plan
goes to port commissioners in September.
Port of Punta Colonet, Mexico
Mexico's government is preparing to open bidding on the largest infrastructure project in the nation's history, a $4-billion seaport that could transform this farming village into a cargo hub to rival the ports of Los Angeles and Long Beach.
If completed as planned by 2014, the port would be the linchpin of a new shipping route linking the Pacific Ocean to America's heartland. Vessels bearing shipping containers from Asia would offload them here on Mexico's Baja peninsula, about 150 miles south of Tijuana, where they would be whisked over newly constructed rail lines to the United States.
The massive development, which is to be privately funded, is attracting interest from heavyweights such as Mexican billionaire Carlos Slim Helu. The world's second-richest man is part of a consortium planning an "aggressive" run at the project, according to Miguel Favela, general director of Mexican operations for cargo terminal operator MTC Holdings of Oakland.
Favela said MTC had teamed up with Slim's IDEAL infrastructure company and Mexican mining and railroad giant Grupo Mexico in an effort to nab the 45-year concession.
Mexico's transportation secretariat will release the request for proposal in June and hopes to select a winner by summer 2009, Subsecretary Manuel Rodriguez Arregui said in an interview earlier this month.
Competition promises to be fierce. Hong Kong-based Hutchison Port Holdings, a major port developer and operator whose parent company is chaired by billionaire Li Ka-Shing, said it planned to study the bid documents. So will terminal operators SSA Marine of Seattle and Dubai's DP World.
Ditto for railroads Union Pacific Corp. of Omaha and Fort Worth-based BNSF Railway Co. Several companies had previously expressed interest in the deal but backed off after repeated delays in the launch of the bidding.
"All the major players . . . they'll be here," said a confident Rodriguez Arregui, who will oversee the selection process.
The Punta Colonet proposal will be structured as a joint port and rail project, requiring terminal operators, railroads and construction companies to join forces to win the deal. Hutchison and Union Pacific had formed an earlier alliance that dissolved last year. Sources said SSA had partnered with leading Mexican construction firm Empresas ICA. Those companies declined to comment about their arrangement.
Rodriguez Arregui said Mexico would choose the group that could guarantee the most volume, and he estimated the facility would be capable of handling a minimum of 2 million containers annually at start-up.
The prospect of billionaires duking it out over this remote stretch of Baja underscores just how lucrative the movement of goods between Asia and North America has become. About 30 million containers crossed the Pacific last year, a flow that had been increasing by about 10% annually for more than a decade until recently. And, though transpacific trade has slowed because of weakness in the U.S. economy, experts said those figures would continue to grow over time.
With the West Coast's largest port complex, L.A.-Long Beach, constrained by urban development and environmental regulations, shippers are searching for alternatives.
Punta Colonet has emerged as an attractive option. It's close to the United States. It possesses a wide, natural harbor. And it's located in a rural, lightly populated area offering almost unlimited room for expansion.
"In the long run . . . it could get to the size of Long Beach-L.A.," which last year handled 15.7 million containers combined, Favela said. "Without a doubt, this is one of the biggest green-field projects ever to be done" in the industry.
The plan is nothing if not ambitious. Punta Colonet would be the first major seaport built in North America in nearly a century.
The harbor would have to be dredged and protected with breakwaters. The rail links could prove costly and complicated. Hundreds of miles of new track must be laid in Mexico.
But the ultimate route and U.S. crossing points would depend on which railroad snared the deal and how it would link up with existing networks on both sides of the border.
Mexico's transportation secretariat estimates the winning consortium will have to invest at least $4 billion to get the project launched.
Some industry experts are skeptical. Dubbed the "Port of Illusion" by one Baja newspaper, Punta Colonet has been plagued by legal squabbles and other setbacks since it was first proposed in 2004. While Mexico dithered, competitors forged ahead.
Panama is in the midst of a $5.3-billion expansion of its landmark canal. Canada, whose coast is the shortest sailing distance from Asia, is looking to capitalize on that advantage with $3 billion in port and rail improvements to speed cargo to the United States.
Ports along the West, East and Gulf coasts of the U.S. have begun their own upgrades. So has Mexico's own Puerto Lazaro Cardenas on the Pacific Coast of the state of Michoacan.
"The logic for [Punta Colonet] is not as strong now," said Asaf Ashar, research professor with the National Ports and Waterways Institute in Washington. But others insist there will be plenty of boxes to go around. The Punta Colonet project could be especially appealing to U.S. railroad interests, which don't want to lose business to Canada or Panama.
Union Pacific owns a 25% stake in the Mexican railroad firm Ferromex, which is part of Grupo Mexico. And it controls the U.S. side of the tracks at half a dozen key border crossings from Calexico, Calif., to Brownsville, Texas, making it an obvious contender.
Union Pacific spokeswoman Zoe Richmond said the company was waiting to see the Mexican government's request for proposal. She wouldn't comment on whether the railroad was contemplating renewing its partnership with Hutchison or joining a new consortium to bid on Punta Colonet.
Some industry veterans say Mexico's timetable may be overly aggressive and that its insistence on awarding the contract as a package deal rather than divvying it up into separate infrastructure, port operation and railroad pieces will make a complex project even more unwieldy.
Mexico has a spotty track record when it comes to executing big public-works projects on time, on budget and with top-flight quality. Much is riding on the outcome.
"What's at stake here is much more than the project itself," Rodriguez Arregui said. "It's our capacity to show the world that we can do big things."
Not everyone is likely to share his enthusiasm.
A new Baja port could dilute the power of Southern California's unionized longshoremen, whose muscle depends in part on shippers having few options on the West Coast. Surfers will lose a prized spot for catching waves near Punta Colonet. Environmentalists are already worried about potential destruction of some of the area's unique plants and sea creatures.
Mexico plans huge Baja port for U.S. trade
Calderon will open bidding for infrastructure contracts Thursday. The project is likely to transform the village of Punta Colonet.
By Marla Dickerson
August 28, 2008
Mexico's government is setting sail with the largest infrastructure project in the nation's history, a $4-billion seaport that it hopes will one day rival those of Los Angeles and Long Beach.
President Felipe Calderon is scheduled to travel to northern Baja California today to open bidding on a development that his administration hopes will catapult Mexico into a major player in North American logistics.
Plans call for the construction of a massive port in the tiny coastal village of Punta Colonet, about 150 miles south of Tijuana, along with new rail lines to whisk Asian-made goods north to the United States. Mexico's aim is to snatch some Pacific cargo traffic from Southern California's ports, whose growth is constrained by urban development and environmental concerns.
Punta Colonet is expected to have a capacity of 2 million shipping containers annually when it opens in 2014, Mexico's transportation secretariat told The Times But officials envision it ultimately handling five times that amount. Last year, the ports of L.A. and Long Beach handled 15.7 million containers combined.
The massive development is to be privately funded, with the first phase estimated to cost between $4 billion and $5 billion. The government is expected to award the 45-year concession in 2009.
A number of major players are expected to vie for the project, including Mexican billionaire Carlos Slim Helu, the world's second-richest man. Slim's infrastructure company, known as Ideal, has teamed with Mexican mining and railroad giant Grupo Mexico and New Jersey-based terminal operator Ports America Group to make a run at the deal.
"We've spent a lot of years working on this," said Miguel Favela, head of Mexican operations for Ports America. "It's going to make Mexico _ much more competitive."
About 30 million shipping containers crossed the Pacific Ocean last year, a flow that increased about 10% annually in the last decade. A weak U.S. economy has slowed the trade, but experts predict it will rebound.
With shippers increasingly worried about congestion at L.A.-Long Beach, Punta Colonet has emerged as an attractive alternative. It's close to the United States. It possesses a wide, natural harbor. And it’s in a lightly populated area offering almost unlimited room for expansion.
When Calderon visits the dusty hamlet of about 2,500 people today, he is expected to talk about the big changes in store. The village will need extensive upgrades to its roads, housing, electrical grid and water supply. State and local officials are planning for a city of about 200,000 to spring up around the port.
The changes envisioned are alarming environmentalists, who worry about the potential destruction of the area's plants and wildlife. But the farmers who scratch out a living there are thrilled at the prospect of a big payday.
"What we need is employment for our kids," said Jesus Lara, representative of several peasant landowner groups that are eager to sell. "Everyone is excited. Having the president come your town is like winning the Lotto."
But whether Punta Colonet turns out to be lucrative for Mexico won't be known for years. Competitors up and down the Pacific coast are in the midst of major upgrades. Panama has begun a $5.3-billion expansion of its landmark canal. Canada’s Prince Rupert port in British Colombia began speeding containers to the American heartland by rail last year and is planning a major expansion.
Little of the cargo bound for Punta Colonet will stay in Mexico, making the port vulnerable to the whims of shippers, who can choose other routes to the United States.
"Nothing is guaranteed," said Asaf Ashar, research professor with the National Ports and Waterways Institute in Washington. "It's a big risk."
Building a seaport from scratch would be difficult enough. But the overland transportation piece is likely to make or break Punta Colonet. The deal is being structured as a joint port-and-rail project, requiring terminal operators, railroads and construction companies to team up in consortia to win the bid. The railroad’s ultimate route and U.S. crossing points will depend on which railway operator is chosen and how it manages to link up with existing rail networks on both sides of the border.
Union Pacific Corp. of Omaha and Forth Worth-based BNSF Railway Co. control the U.S. side of the tracks at most of the key U.S.-Mexico border crossings. Striking a deal with one of those companies to get the cargo to the American side will be crucial, said Paul Bingham, managing director of the global trade and transportation practice for Global Insight, a Massachusetts-based consulting firm.
"They have the ability to essentially choke off that port," Bingham said.
BNSF spokesman Patrick Hiatte said Wednesday that the company was "very interested" in the Punta Colonet project. He declined to say with whom the firm might collaborate to make a bid.
Union Pacific could not be reached for comment. The company earlier had teamed with Hong Kong-based Hutchison Port Holdings to make a run at the project, but that alliance dissolved last year.
marla.dickerson@latimes.com
Lloyd's List
Mexico's $5bn Colonet project launched
Rainbow Nelson - Friday 29 August 2008
MEXICAN president, Felipe Calderon, has given his official blessing to one of the most eagerly-awaited intermodal projects in Latin America, Punta Colonet.
The Mexican government has compared the $5bn port and rail project to the widening of the Panama Canal, placing it at the heart of its infrastructure program for the next five years.
Mr Calderon, speaking at the official launch of the ambitious scheme, said it was “the largest infrastructure project” of his administration “for now” and that it was without doubt the “most important port project in Mexico for many years”.
“To give you an idea of the magnitude of the project only the land area of the port is four times bigger than the Port of Los Angeles and represents more than five times he Port of Long Beach in California,” he said.
Initial designs of the project, were released by Luis Tellez, secretary for communications and transport.
The Punta Colonet Multimodal Project will house a single container terminal with 32 berthing positions and a land area of 700 hectares. All told the complex boasts 5,300 hectares including 2,600 hectares of coastline. As well as plans for a port and rail link there are proposals to build an air cargo facility at a cost of $226m.
The port, to be built at an estimated cost of $1.1bn, will be connected to the US hinterland by one or two rail lines that will stretch more than 150 km to Mexicali, Yuma, Nogales or El Paso to link up to the US rail network. The rail element of construction is valued at around $2bn. Public utilities including a power plant, roads and water treatment facilities will all need to be constructed taking the total cost to almost $5bn.
Bid documents will be released next week outlining the process in which the port and the rail link will be built and operated by the private sector.
A new port authority will be established to oversee activity when it has been constructed. It is estimated that it will generate up to $500m a year for the Baja California region.
All the major port operators, including Hutchison Port Holdings, SSA Marine, Ports America Group, DP World, APM Terminals, PSA Corp, Cosco Group and the largest rail operators in Mexico, Ferromex and Kansas City Southern, have been working on plans to turn the facility into an alternative gateway to ports on the US west coast.
Mr Tellez said: “Once it is in operation the port will move 6m containers a year, double that moved in the entire port system today.”
The first phase of construction is scheduled for completion within three years of the concession being awarded sometime in 2009. When fully developed, volumes will be five times that of Mexico’s largest container port Manzanillo and ten times that of Veracruz, the largest port on the Gulf Coast.
Access to the US market holds considerable appeal to international operators such as DP World, PSA Corp and Hutchison Port Holdings, which to date have been reluctant or unable to establish US operations due to the high cost of US labour or restrictions imposed in Washington on foreign ownership of US terminals.
Article from Lloyd's List:
www.lloydslist.com/art/20017566232
Published: 29/08/2008 GMT
© 2010 Informa plc. All rights Reserved. Lloyd's is the registered trademark of the Society incorporated by the Lloyd's Act 1871 by the name of Lloyd's
West Coast ports fearing growing competition
Les Blumenthal
WASHINGTON – Struggling to ride out the recession, West Coast ports face new competition as ports in Canada and Mexico, an expanded Panama Canal and even the Suez Canal could steal away some of the cross-Pacific shipping they’ve relied on.
More than 70 percent of Asian goods imported into the U.S. – everything from toys to electronics to autos – pass through the ports of Los Angeles, Long Beach, Oakland, Seattle, Tacoma and Portland.
The directors of the ports, in a first-ever joint visit, were on Capitol Hill last week seeking billions of dollars and a federal commitment to improve rail corridors necessary to speed the goods east.
“We need a well-thought-out, strategic freight policy,” said Tim Farrell, executive director of the Port of Tacoma. “We need to focus on corridors from Shanghai to Chicago or Tokyo to Houston. We are just getting started, but the West Coast ports generate more jobs than the Big Three automakers.”
The looming clash over Asian shipping routes is part geography lesson, part the dreams of naval architects as they design ultra-large cargo ships, and part a short course in shipping economics – all of it overlaid with concerns about greenhouse gas emissions.
Canada is already developing a national shipping strategy utilizing the Port of Vancouver and a new port at Prince Rupert, 900 miles north of Vancouver. Prince Rupert is roughly a day closer to Shanghai by freighter, and the trains from there to Chicago and other Midwest cities encounter fewer bottlenecks than eastbound trains from the U.S. West Coast.
Mexico announced plans to build a mega-port at Punta Colonet on the Baja Peninsula and has expressed interest in Southwest markets. The existing Mexican ports handle cargo mostly for domestic consumption. However, rail times from the Mexican ports to Houston would be shorter than those from U.S. West Coast ports.
Come 2014, a new set of locks in the Panama Canal will be completed, capable of handling container ships nearly double the size of those now using the canal. The large container ships could bypass West Coast ports entirely and head directly to the East Coast.
However, the biggest drawback to using the Panama Canal might be the fees it charges. Even now, those can range up to $250,000 for a large car carrier. Some shippers sail around Cape Horn at the tip of South America rather than pay.
Goods from countries west of Singapore, such as India and Bangladesh, often come through the Suez Canal on their way to the U.S. East Coast. Though the canal doesn’t have locks, tolls and fees can run into the hundreds of thousands of dollars.
“In the very long term, all of these gateways will be needed,” Bingham said. The key for West Coast ports will be improved rail service to the East, he said. “They have to be very proactive.”
At the heart of the congressional lobbying campaign by port directors was the reauthorization of the five-year Surface Transportation Act, which includes highways, roads, mass transit and the movement of freight. The current bill expires later this year.
The ports want the bill to include a greater emphasis on the freight rail corridors from the West Coast to eastern markets.
The funding would help augment improvements railroads are making already, including new track, upgraded signals and new or expanded yards.
Les Blumenthal: 202-383-0008 lblumenthal@mcclatchydc.com
1950 South State Street, Tacoma, Washington 98405 253-597-8742
© Copyright 2010 Tacoma News, Inc. A subsidiary of The McClatchy Company
Read more: http://www.thenewstribune.com/2009/06/28/v-lite/793988/west-coast-ports-fearing-growing.html#ixzz0hEmuPoYC
CANAMEX Corridor Opens New Options for Trade with Asia
Published: May 24, 2006 in Knowledge@W.P. Carey
The topic of international trade these days mostly conjures thoughts of expanding Asian markets and Middle Eastern oil, but one route to prosperity in the global marketplace runs right through Arizona: It is the Canada-American-Mexico Corridor.
The CANAMEX Corridor of Innovation initiative has been working in recent years to plan improvements to public and private shipping, rail, highway and inspection facilities through a multistate cooperative of Arizona, Nevada, Utah and Idaho. Now, most truck and freight train traffic in Arizona goes east and west. CANAMEX (aka "Smart Corridor") has the potential to free up north-south trade in North America and more efficiently reach out to the Far East.
CANAMEX can expand trade to more markets by easing bottlenecks, according to experts at Arizona State University and the W. P. Carey School of Business. Stepped-up trade with China, Japan and other Asian nations has made Los Angeles-area ports so busy that CANAMEX planners are looking south for easier access to Pacific Ocean steamship lines.
One route runs through Guaymas, Mexico, which is on the Gulf of California, about 200 miles south of the Arizona-Mexico border city of Nogales. A recent Arizona Department of Transportation report, "Logistics Capacity Study of the Guaymas-Tucson Corridor," concluded that the Port of Guaymas, "with some minor improvements, such as the acquisition of additional container-moving equipment, is ready to start a container service comparable to other Mexican regional ports, such as the Port of Mazatlan [much farther to the south on Mexico's Gulf of California coast] and Ensenada [on the Baja peninsula]."
CANAMEX appeal growing
"The problems caused by the congestion of the ports of Long Beach and Los Angeles have caused companies to look for other alternatives such as the corridor between Guaymas and Tucson," says J. Rene Villalobos, associate professor of industrial engineering at ASU's Ira A. Fulton School of Engineering and a co-author of the Guaymas-Tucson corridor study. Although the CANAMEX Corridor may not be a household name among the general public, Villalobos says people in international business are familiar with the corridor, a concept started in 1995.
Despite the surge in fuel and transport prices, trade with Asian partners still makes sense, Villalobos says: "The increase in transportation prices certainly makes places that are close by more attractive for trade. However, the transportation costs with the Far East countries are still very competitive because of the prices offered by the steamship companies. It depends on the commodity."
Improvements to border-crossing facilities in Nogales and to the infrastructure of Guaymas are vital, according to Arnold Maltz, associate professor of supply chain management at the W. P. Carey School of Business and a co-author of "Logistics Capacity Study of the Guaymas-Tucson Corridor." That study says the main limitation of Guaymas' port capacity is the lack of quay cranes, which are land-based cranes that lift cargo to and from ships.
"This precludes the Port of Guaymas from being able to offer efficient turnaround services to modern container ships that are not geared with their own cranes," the study states. "In order to provide this service we believe that at least two quay cranes are needed, since just one quay crane would not provide enough capacity to make the loading and unloading of containers from the vessels more expedient."
The exact capacity and characteristics of the quay cranes and related issues, the authors state, are a suitable subject for a future study. The Mexican government is providing funds for follow-up studies, Villalobos says. Although Guaymas has adequate rail and highway connections through Mexico to Arizona, the study says the Port of Guaymas lacks a regularly scheduled container service, which railroads need to utilize the corridor's potential.
"While the analysis of the requirements to attract a major shipping line to the port was beyond the scope of this study, we believe that the geographical position of Guaymas may be an issue to attract, in the short term, a company to provide direct service to Asia," the authors wrote. "We believe that the railroad companies are indispensable for the creation of an economically feasible container corridor between the Port of Guaymas and Arizona. Thus, these companies must be encouraged to take an active role in the activation of a container service in the Corridor."
New ports eyed for China trade
"It has always been my understanding that the issues at Guaymas are facilities," says Tracy Clark, an economist with the Bank One Economic Outlook Center at the W. P. Carey School. "They have been working on those issues. L.A. is close to maxed out. If there is an alternate port with good land transport connections, it will be used ... There [is] not enough capacity on the West Coast as a result of the ramp-up of the China economy."
The study says improvements also will be needed for the Nogales inspection compound, known as the Mariposa Port of Entry, which every commercial motor vehicle entering the United States at Nogales must go through. Upgrades also will be needed for railroad inspection procedures on the U.S. side of the border. The study says the maximum number of trucks that can be processed daily at Mariposa POE under current operation conditions is around 1,500.
"Considering a current demand of up to 1,300 per day: It can only serve 200 trucks extra per day" before waiting times would be significantly increased, the study states. "Due to inspection time requirements and railroad operations in Nogales, currently only up to eight trains per day can cross the border, which means only one additional northbound train per day can send through the corridor."
The study found no significant point of congestion along Mexico's Federal Highway 15, which links Guaymas and Nogales, but a segment of Interstate 19 that connects with Interstate 10 in Tucson is at capacity or near capacity during rush times.
CANAMEX Corridor initiatives might warrant some cautious optimism for trade within North America and an easing of the U.S.-Mexico immigration issue, although trade with Asia is expected to continue to accelerate despite higher petroleum prices.
"CANAMEX is a route to expanding markets, not shifting trade between areas," Clark cautions. "Asian trade will continue to expand because of rising standards of living in China and continued low cost. Asian trade in high-value, low weight/volume items like computer chips goes by air, and has to go to Asia because that is where the assembly plants are located. Asian trade in low-value, high-weight/volume stuff [the things made out of the computer chips] goes by boat or not at all. The biggest barrier to expanding trade with Asia is the lack of port capacity, not fuel prices."
Clark says Mexican employment was hit hard as China became the low-cost producer. "I suppose that energy prices or wages in China might rise enough to help Mexico regain some of that lost business. However at current energy prices and wages China is still cheaper," he says.
A 'borderless economy'?
Many Mexican workers who lost jobs at maquiladoras -- manufacturing plants near the U.S. border which assemble finished goods out of U.S.-supplied parts and resources -- are among the millions now working low-wage jobs in the United States. Mexican-government incentives for the maquiladora program, initiated by the then-ruling Institutional Revolutionary Party (PRI) around 1968, have expired, prompting many Mexican workers to cross into the U.S. One of the stated goals of the CANAMEX Smart Corridor organization is "facilitating provision of professional services in the region through common registration and licensing, which contribute to the creation of a 'borderless economy.'"
How can the CANAMEX goal of a "borderless economy" be squared with the controversy over illegal immigration?
"You can't have it both ways," Maltz says. "But what CANAMEX is about is encouraging development in Mexico, which will make the opportunities greater down there and thus decrease the attraction of illegal crossing. ... This is on the table for many companies right now. Mexico claims to have regained some business, and Motorola has made Nogales a major manufacturing center."
"There is some tension there," Clark says of the immigration issue and CANAMEX goals, "but just as with the fear that bombs will be imported through a port facility, inspection is the answer. We will never have borderless [trade] in the same sense we do between states. I don't think illegal immigration will prevent either trade or somewhat freer movement of goods, although it may delay things just as 9/11 fears set things back at the Canada-U.S. border."
And, although most of the CANAMEX emphasis has been southward, there are issues involving our neighbors to the north.
"There are transportation challenges on the Canadian side," says Dawn McLaren, research economist with the W. P. Carey School of Business. "I've heard from some shippers that it is better to use the old quota system than NAFTA because of the bureaucracy involved."
McLaren describes the CANAMEX Corridor as a "fairly new" concept. "The difficulty is that Mexico borders the southwest United States, and the industrial areas of Canada are in the east [Ontario]. As Alberta comes onto the map with the oil sands, however, that could change quite a bit."
Although second only to the Saudi Arabian reserves, Alberta's oil sands, formerly known as tar sands, are thick and require special extraction and refining methods. Still, oil sand has come to represent about half of Canada's total crude oil output. "As the technology to extract oil from the sands is developed, it becomes more important," McLaren says.
And, although Canada and Mexico export more oil than they use, she notes, "Neither Mexico's nor Canada's oil is of the grade found in the Middle East." Regardless of such complications, the development of the CANAMEX Corridor will aid the flow of oil and other resources and products, which could unify and strengthen the North American economy, including its balance of trade with Asia.
"In my opinion, the existence of an efficient CANAMEX Corridor would make the production and acquisition of some products from Mexico more attractive than getting those products from China," Villalobos says. "Also, very often products produced in Mexico are either based on U.S. raw materials or are finished in the U.S. For every dollar that Mexico imports, around 55 cents are from the USA; for every dollar that China imports, about 8 cents come from the USA. Thus, if the [logistical] efficiency of the Corridor increases, it should, in the mid to long term, have a positive impact [maybe minor] on reducing the U.S. trade deficit."
Among the CANAMEX goals:
* About $4 billion worth of highway improvements are planned and programmed, including the Hoover Dam bypass, which is under way. Smart Process Partnerships in which all five CANAMEX states -- Arizona, Utah, Idaho, Nevada and Montana -- create efficiency and savings for government, businesses and individuals.
* Telecommunications access for rural areas where broadband is lacking.
* A shared Information Technology System (ITS) that could be used by everyone from freight shippers to tourists.
* Accelerating access to e-government services for business registrations and license renewals.
* An interoperable Digital Signature program for CANAMEX states to coordinate a single set of standards for secure electronic commercial transactions.
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