Development of a South-South

Development of a South-South-North
Maritime Corridor
John Cuttino
President, Portal Commerce & Logistics
Brazil Representative, Port of Houston Authority
&
Paulo Protasio
Director, National Agricultural Society
Ex. President National Association of Users of Cargo Transport
Ex. President Rio de Janeiro Commercial Association
United Nations CEPAL International Seminar
Facilitating the Effective Integration of Developing Countries in the Global Economy through Aid for Trade
Managua, Nicaragua - September 25, 2013
Seminole Plaza Hotel
Points of Departure
• Firms, not nations compete (Porter)
• Competitiveness of supply chains
• 4th Generation Port (UNCTAD) and need
to link Port-Hinterland Networks
• Trade Corridor as Unit for Analysis (Actor
and Context) can Improve Trade
Facilitation Outcomes
• South-South-North as Catalyst
– Commercial and Academic/Scientific Project
AGENDA
• Legacy of Transportation Corridor Planning: U.S.,
Brazil, and IIRSA
• Trade Corridor as Unit of Analysis
• The SSN Challenge: Opportunities for Trade,
Transport, and Trade Facilitation
• An Instrumental Research Solution: Actionable
Research Across Trade Corridors
• South-South-North Maritime Corridor as Catalyst
– Commercial and Academic/Scientific Projects
• Bonus: Houston Case: How IT (harbor scheduling) brought
productivity increases at Port of Houston
U.S., Brazilian, and South American Transportation
& Economic Development Corridors
Brazilian Eixos
U.S. High Priority
Transportation and
Marine Corridors
South American Ejes
Initiative for Integration of
Regional Infrastructure in South
America
(IADB, CAF, FONPLATA)
10 Development Axes
•Amazon (Colombia-Ecuador-Peru-Brazil)
•Andean Axis
•Southern Andean Axis (North-South Argentina and Chile)
•Capricorn Axis (Antofogasta/Chile-Jujuy/ArgentinaAsuncion/Paraguay-Porto Alegre/Brazil)
•Guyanese Shield (Venezuela-Brazil-Guyana-Suriname)
•Parana-Paraguay Inland Waterway
•Central Interoceanic (Brazil-Bolivia-Paraguay-Peru-Chile)
•Mercosul-Chile
•Peru-Brazil-Bolivia
•Southern (Talcahuano-Concepcion/Chile-Neuquen-Bahia
Blanca/Argentina)
Companies Associated with IIRSA
ADM
Asea Brown Boveri
Bechtel
Booz Allen Hamilton
Bunge
Cargill
El Paso
Furnas
GyM
Halliburton
Hunt Oil
Maggi
Odebrecht
Petrobras
Pluspetrol
SK Corp
Siemens
Sonatrach
Tecgas
Tractebel
SUFRAMA
Brazilian Axes for Development and Integration
• Redefined economic space and codified in
multiyear-budget plan (Avanca Brasil 99/03)
• Result of public/private Eixos Study (97/98)
• Consorcio Brasiliana (Booz Allen Hamilton,
Bechtel International, ABN Amro Bank), Ministry of
Planning, National Development Bank (BNDES)
•Criteria for delimiting axes of development
• multimodal transportation infrastructure network
based on analysis of origin/destination matrices of
freight for priority commodities (GEIPOT)
•Functional hierarchy of cities based on location
theory of production, consumption of goods and
services (IBGE)
•Dynamic centers with economic potential
•Ecosystems
•Policy legacies (Brazil in Action, NE Drought
Assistance)
•Innovations and Objectives:
• Bundle projects in different sectors
• Prioritize projects with dual public/private interest
• Combat negative sum fiscal compensatory
policies
• Focus on regional/global competitiveness
• Lessen rural to urban migration
• Reduction of transport costs
• State reform in project management, and
• Address regional imbalances.
Trade Corridors: Definition
• From transportation-specific to more encompassing of trade process
–
–
–
–
“..corridors are understood as places or axes where business is made viable, benefiting from a cluster of economic and
social facilities, highlighted by the trunk transportation systems.” (Brazilian Transportation Planning Company, GEIPOT
1999)
“..corridors are conceived as a group of facilities along specific axes of penetration that are associated with the nation’s
economic frontier. They include, more precisely, transportation resources, considered in their multimodal dimension,
storage and warehousing installations and their intra- and intersectoral interfaces.” (GEIPOT 1988)
Four components of a corridor: 1) standards and commercial and financial practices;
2) governmental regulations; 3) infrastructure, vehicles, equipment and facilities; and, 4) actors. (United Nations
Economic Commission for Latin America and the Caribbean 1992)
“..geographically designated areas that facilitate the national and transnational movement of goods, services, people, and
information.” (Arizona Executive Order 2001-05 on CANAMEX)
• Regional planning units that link production functions through the
transformation process to domestic and international market access
(Bender)
• Working Definition:
• “geographical designated area over which significant trade flows from
a given origin of production to a given destination across a transport
infrastructure met with a variety of services and linkages to labor,
capital, production, and consumption.” (Boske and Cuttino)
Components of a Trade Corridor
• A commercial infrastructure
–
–
–
–
Distribution and warehousing facilities;
Foreign trade zones;
Regulatory system for customs and inspection; and
Trade incentives.
• An integrated regional technological infrastructure with
electronic data interchange and trade databases;
• Business and professional know-how and expertise;
• Well-developed social, political, and business linkages;
• A physical infrastructure of highways, rail, air, sea, inland
waterway, pipeline, and telecommunications;
• Direct access to multiple markets; and,
• Specific legislation and regulations. (Boske and Cuttino)
Trade Corridor as New Unit of
Administration
“Trade corridors are a new class of region. They are not the
products, by and large, of planning theory and practice….Rather, they
are increasingly the result of decentralized decision making, led by
the private sector’s understanding of changing, competitive markets,
comparative advantages in raw materials, production capabilities and
access to markets. The private sector is in a partnership with the
public sector, which is divesting itself of those activities which it
does poorly or inefficiently. …Trade corridors are generating their
own set of emerging issues: new models of public administration.”
Defining elements: production, transformation, market access
-Stephen Bender, OAS, Unit for Sustainable Development and Environment
Theoretical Underpinnings: Literature Review
• Economic Geography
– Central place and location theory (Von Thunen, Christaller, Losch)
– Growth-pole theory (Perroux and Hansen)
• New Economic Geography (Krugman)
–
–
–
–
Imperfect competition
Increasing returns to scale
Market access
Transportation costs, freight flow analysis, regional infrastructure
• Global City-Region
– City-region as actor and spatial node in global economy (Scott)
– Paradiplomacy (Friedmann) and fiscal warfare
– X-Border, transborder, decentralization, governance, sustainable development (Edgington)
• Business and Maritime Logistics
– From “Firms, not nations compete” (Porter) to Systems
• Add that firms only compete to the extent their trade corridors/supply chains compete
• Brand vs. Brand to Supplier/Brand/Store vs. Suppliers/Brand/Store (Lambert)
– Clusters and value-added productive arrangements (Porter)
– Port-hinterland networks and governance (DeLangen)
• Institutionalism
– Reduction of transaction costs (North)
– Institutions shape and are shaped by (Agent and Medium, Independent and
Dependent Variable)
THE SOUTH-SOUTH NORTH:
INTEGRATED MARITIME ROUTES
• OPTIMIZATION OF MARITIME TRANSPORT
• RATIONALIZATION OF PRODUCTION
• ACCESS TO NEW MARKETS
• SAFETY
AND SECURITY: MARITIME SURVEILLANCE
AND MONITORING
• INVESTMENTS IN TELECOMMUNICATIONS,
TRANSPORT AND ENERGY INFRASTRUCTURE
• RELIABILITY AND SUSTAINABILITY
• STAKEHOLDER COMMITMENT
Strategic Position of Houston
(Production, Consumption, and Transport Logistics)
•
300 miles - 22 million population
•
500 miles– 50 million population
•
1000 miles- 103 million population
•
Texas GDP: $1.22 trillion (14th globally)
300
Port of Houston Complex
500
•
Port of Houston Authority and 150 private
companies along 85 km Ship Channel
•
>95 Berths- > 8000 deep sea vessel calls per
year & > 150,000 barge moves
•
All-Water Services from 100 carriers connecting
to >1000 port terminals
•
>230 million metric tons and 1.9 Million TEUs
•
Global Center of Oil & Gas and Energy Industry
Milhões
TRADE BALANCE:
HOUSTON/GALVESTON AND BRAZIL
$18000,0
$16000,0
$14000,0
$12000,0
IMPORTAÇÕES
$10000,0
$8000,0
EXPORTAÇÕES
$6000,0
TOTAL
$4000,0
$2000,0
$,0
2000
2001
2002
2003
Source: U.S. Bureau of the Census.
2004
2005
2006
2007
2008
2009
2010
2011
13
The Challenge
CURRENT ROUTES
•Heavy movement of crude and finished products from the Middle
East and Asia;
• Large crude move from the Middle East to the US from the
Persian Gulf;
•Consumer products from Asia to LA/LB, Houston, and NY/NJ
FUTURE ROUTES
•Brazilian pre-salt oil reserves and changing economic demographics
•Opportunities for refining and manufacturing of finish products at South-South-North
ports;
• Offer of direct access back to the US, Asia and the expanding African market place.
• A global hub in South Africa
• Panama Canal Expansion
Back to the Challenge
Need for a Catalyst: SSN
• Greater understanding:
– Economic development opportunities, challenges, public policies
and investments
– Linkages that tie NORTH AMERICA, CENTRAL AMERICA,
CARIBBEAN, SOUTH AMERICA and AFRICA economies to
stimulate a greater political, social, economic and environmental
integration.
• Articulation and development of a South-South-North Maritime
Superhighway that connects and integrates South (Africa)South (South America) and North (U.S. Gulf-Central America &
Caribbean), including Intraregional Trade (Short sea).
SSN SURVEY:
•
South-South-North Maritime Corridor: What is it?
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–
•
•
What are the critical infrastructure needs for more efficient trade and
transportation?
What is the potential of the SSN?
–
•
•
The industrial potential and latent trade that could take place with structural and
punctual infrastructure investments
How can public policies and institutions better open trade
opportunities and facilitate optimization?
Are there best practices among selected ports, terminals, and
transportation operators that we can learn from on the SSN?
–
–
•
Mapping or delimitation of the existing trade lanes of the SSN
Origin/destination of cargoes, port pairs, existing maritime and air cargo services, a
study of trade flows
E.g. Houston: ISO 14001, ISO 28000, Fuel Switching
Brazil: National Dredging Program
What is the potential role of a South African “Hub” for SSN?
HOW DO WE GET THERE?
•INSTRUMENTAL CROSS-NATIONAL COLLABORATIVE
RESEARCH- LINKING PORT-HINTERLAND NETWORKS
•VEHICLE: SHIPMENT LEVEL ANALYSES OF REGIONALLY
SIGNIFICANT COMMODITIES THROUGH COMPETING
TRADE CORRIDORS
•HOW TRADE IS ACTUALLY TAKING PLACE? PROCESSES,
INFRASTRUCTURE, REGULATIONS, COSTS
SSN Maritime Corridor Research Project
•
Basic Objectives of the Academic Project:
– Collaborative Research of Regional Universities, Thinktanks, Class
Entities, Multilateral Organizations
– Multi-year survey with purposive case studies designed to delimit the
SSN and provide inputs and suggestions for formation of public policies
to stimulate international trade and investment, trade facilitation, and
cooperation.
– Identify economic development and trade opportunities
– Collaboration between leading institutions within the SSN Maritime
Corridor (especially Port User Organizations- COMUS, Santa Catarina)
– Engage/stimulate a public-private sector dialogue on critical
infrastructure, public policy, and maritime security issues affecting the
corridors.
– Collaboration between research entities and leading trade and
transportation firms critical to trade corridors (ports, terminals, project
cargo/breakbulk, rail companies, and cargo owners-users of cargo
transport)
SSN Data Needs
• Commodity Flow Data O/D
– Census, Trade Ministries
• Transportation Costs and Performance
– University of Sao Paulo-ESALQ-SIFRECA
– EPL
– Federal University of Santa Catarina
• Shipment-level B/L Data (Datamar/PIERS)
• Survey Level Data of Actors/Stakeholders
– World Bank Trade Facilitation Audit Methodology
AFT Needs
Expected Result of SSN
Building productive capacity
Identification of gaps in competitiveness by comparison of (non)functioning trade corridors.
Establishment of integration roundtables representing port-hinterland networks capable of
understanding entirety of intermodal transportation networks and policies.
Diversification of exports
Quantitative analysis of commodity flow data between regions.
Harmonization of trade
norms and regulations
policy, Delimitation of differing national policies will allow for better understanding of opportunities
for convergence.
Improvements in infrastructure
Shipment-level analysis follows trade through the physical movement of goods and services.
Gaps made evident as shipments journey on a trade corridor through transportation and
supply chains.
Increased competitiveness
Cross-sectional comparison of like commodities selling to the same destination markets will
reveal gaps and where and why some trade corridors are more competitive than others. The
potential for development of benchmarking and new performance measures.
Insertion into global value chains
Greater understanding of how trade takes place by encompassing entire O/D chains.
Monitoring and evaluation
Understanding each stage of the trade and transportation process, better processes for
monitoring and evaluation can emerge. Proposal to set up integration roundtables could help
institutionalize monitoring and evaluation.
Policy recommendations
Policymaking improves with better understanding of determinants of international trade.
Promoting trade facilitation
Cooperation disperses across trade corridors’ multiple jurisdictions.
Reductions
barriers
in
non-tariff
trade Identification of asymmetries in treatment of different commodities provides basis for
negotiation and analysis of non-tariff barriers impacts on local and regional economies.
Commercial Project
• Identify economic development opportunities in key infrastructure
(telecommunications, transportation, energy)
• Bankable feasibility studies and executive projects for infrastructure
development
• Increased trade volume
• Development of more and regular maritime services
– Short sea and cabotage
• Digital integration of participating ports and business communities via
IT platform
• Africa, South America, Gulf of Mexico, Central America and Caribbean
business cooperation: new player
• Maritime electronics and monitoring in partnership with oceanographic
research
SSN Ports (Purposive)
•
Houston (USA)
• Buenos Aires and Zarate (Argentina)
•
Port of Spain (Trinidad & Tobago)
• New Orleans and South Louisiana
(USA)
•
Kingston (Jamaica)
•Panama (Colon)
•
Itaqui (Brazil)
• Puerto Cabello (Venezuela)
• Cartagena (Colombia)
•
Montevideo (Uruguay)
• Caucedo (Dominican Republic)
•
Santos (Brazil)
•
Santa Catarina Port Cluster (Brazil) • Rio de Janeiro (Brazil)
•
Lagos (Nigeria)
•
Coega (South Africa)
• Fortaleza/Pecem (Brazil)
• Belem/Vila do Conde (Brazil)
• Salvador/Aratu (Brazil)
Top-in-Class Partners
• Research Universities, Thinktanks, Class Entities, and Multilateral Organizations
• Maritime Steamship Lines (Container, Liquid Bulk, Dry Bulk & Breakbulk)
• Terminal Operators
• International Freight Forwarders
• Railroads
• Trucking companies
• Infrastructure Development and Project Management
• Users of cargo transport: Importers and Exporters
SSN Benefits to Trade Facilitation
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•
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Save time and money
Reduce costs and streamline procedures
Integrate transportation and logistics under the multimodal/intermodal
optic
Coordinate stakeholder commitment across multiple jurisdictions with
public and private sector participation (technology)
Rationalize and optimize the transportation matrix
Solve bottlenecks and resolve disputes
Develop comparable micro-level data for benchmarking Trade Corridors
(O/D pairs)
Commitment to environment and sustainability (holistic visibility)
Creation of a special interest- new institution (agent and medium)
Generate economic development
Facilitate trade and technology transfer through linked port-hinterlandmaritime networks
Leverage position of small and medium-sized businesses
TOWARDS A SUSTAINABLE
SOUTH-SOUTH-NORTH MARITIME CORRIDOR
Thank You!
John Cuttino
Brazil Representative
Port of Houston Authority
Email: jcuttino@poha.com
29
Alexandra Morrell, Mare Liberum Consulting
When is Your Ship Coming In?
Integrated Billing System
• Electronic pilot cards
and electronic invoices
• Same day invoicing
• Integration into
accounting software
• Accurate billing
information for all port
entities
• Customized fees and
charges to port
operations
Results