8.3.16

The Port of Montevideo - The Most Advanced Container Terminal in South America

If we were to write the Gospel of St. John in political terms for our country, we would say that in the beginning was the bay - the port," explains Luis Alberto Lacalle, Uruguay’s president from 1990 to 1995.

It is only because of the strategic location of the Bay of Montevideo (which forms a natural harbor) that there was first an encampment, then a commercial stronghold, then a city. The natural harbor is the reason Montevideo came into existence.

The purpose of this article is to provide you with a brief history of the Port of Montevideo, describe what the Port is like today, and point out a few of the Port's future challenges.


Port of Montevideo history 


One of the Bay of Montevideo's key advantages for use as a harbor was its depth. Merchant ships could enter its protection without the need for dredging.

Across the Rio de Plata (River of Silver) from Montevideo was Spanish controlled Buenos Aires, the region’s largest population center. However, the water near Buenos Aires was so shallow that ships had to anchor far from shore until approach channels were dredged.

 The Bay of Montevideo was first used as a harbor by the Portuguese. In 1723 the Portuguese started building a fort on the peninsula that forms the south-east point of the bay.

The Spanish, who competed with the Portuguese to dominate the region’s commercial activities, seized the peninsula and developed it into a walled citadel.

The City of Montevideo was founded by the Spanish governor of Buenos Aires, Bruno Maurice de Zabala, in 1730. The first civilian residents of the new city were lured from Buenos Aires and the Canary Islands with the promise of free land, seeds, and livestock.

The nation of Uruguay was created 98 years later in 1828.

Besides being the reason the City of Montevideo was created, the natural harbor was a key factor in the formation of Uruguay as a nation.

Great Britain was a strong and influential advocate for an independent nation of Uruguay to act as a buffer state between Argentina and Brazil. And to assure one nation didn't end up with a monopoly on the ports of the Rio de la Plata.

1870 – 1930: Fifty years of port development
The creation of the nation of Uruguay was followed by several decades of internal revolts and civil wars. So, it wasn’t until the 1870s when significant development of the Port of Montevideo got underway. The pace of development picked up after the turn of the century and continued through 1930.

In the early decades of the 20th Century, Uruguay became one of the richest countries in the world. As a producer and exporter of meat and foods crops, this small South American country helped feed large numbers of people in the UK and Europe during World War I and World War II.

However, in the 1950s, Uruguay started having economic troubles. Europe came back into food production. And the development of synthetic materials started replacing animal products. With two decades of economic decline, episodes of civil unrest broke out, which eventually led to a military government from 1973 to 1984.

Port starts making a comeback with new favorable laws and foreign capital 
The Port of Montevideo started making a comeback during the Lacalle presidency. The first step to recovery was the 1992 Port Law, which set clear port policies guided by the principles of efficiency, safety, and reliability.

The Administracion Nacional de Puertas (National Ports Administration or ANP) oversees all the commercial ports in Uruguay. The 1992 Port Law provided the ANP with a clear and unambiguous mandate to provide greater efficiency and competitiveness in foreign trade.

This 1992 Port Law was followed by the 1994 Free Port Law, which opened the door for private companies to become involved with port operations through various concession and licensing arrangements.

The attempted recovery of the Port of Montevideo stumbled during the regional financial crisis from 1999 through 2002. However, even during the crisis. the Port started picking up market share from the Port of Buenos Aires.

It gained capital and port management experience by entering into a public/private partnership with a Belgium consortium.

The Belgium group, Katoen Natie, has been operating the Port of Montevideo’s main terminal, Terminal Cuenca del Plata, since 2002.  Katoen Natie’s capital investments and expertise has resulted in great success with the Port’s volume more than doubling since the partnership began.

Port of Montevideo,  Image by Daniel Stonek

2009: The most advanced container terminal in South America 
Katoen Natie invested an estimated 180 million dollars improving and modernizing the Port. When the project was completed in 2009, the Port of Montevideo became the most advanced container terminal in South America.

The improvements included adding more than 15 hectares of land surface (created by fill) that forms a new dock capable of handling the next generation of deeper draft vessels. The new development also included the construction of nine container cranes, which can move 80 to 100 containers per hour.


The Port of Montevideo today 


Port of Montevideo Facilities 
  • Docks and equipment to accommodate, load, and unload container ships, bulk carriers, and rear-loading car carriers
  • Dock and a large cold storage facility for frozen meat, fish, and chilled fruit
  • A dock and facilities for Uruguay’s Navy vessels
  • A cruise ship dock
  • A large dock for Uruguay’s national fishing fleet.  
  • Three docking and offloading facilities for oil tankers and LPG tankers 
  • Dock space for a ferry between Montevideo and Buenos Aires 
  • Dock space for Uruguay’s tall-ship, the Captain Miranda 

Cruise ship docked at the Port of Montevideo  image by J.R. Inacio

Capacity 
The Port of Montevideo makes the most of its facility and equipment with continuous operations-24 hours a day, 365 days a year. This is possible due to Uruguay’s mild climate, as well as two breakwaters constructed to block waves caused by Pamperos (occasional strong southwest and south-southwest winds). With its mild climate and advanced equipment, the port of Montevideo is capable of moving over a million containers per year. 


Developing a niche with transshipment and refrigerated cargo 
Transshipment is the movement of cargo through an intermediate port (or hub port) en rout to its final destination. Transshipped cargo is distributed between a hub port and its corresponding regional points by means of maritime feeder services, trucks, and trains.

The Port of Montevideo is seeking to become a preferred regional transshipment hub. With the Free Port Law in place, Montevideo is the only major shipping terminal on South America’s Atlantic coast that allows loads to be handled, stored, consolidated, split up, regrouped or repackaged without charging any import duties.

The Port of Montevideo’s main transshipment activity is receiving fruit and vegetables from Argentina’s Patagonia region and preparing it for shipment to Northern Europe and the Mediterranean. The Port of Montevideo is a preferred port for this service because it:

  • has lower port costs
  • saves a day of shipping time
  • has proven expertise handling refrigerated cargo and containers

Cruise ship calls 
In addition to shipped cargo, the Port of Montevideo is starting to provide dock space and services for visiting cruise ships. Passengers go ashore to explore Montevideo's Old City or take a bus tour. During Uruguay's 2015/2016 cruise season (November 6th through April 10th) 109 cruise ship calls are expected.

Trends and future challenges


Changes in the shipping industry – larger ships calling on fewer ports 
Global shipping trends are changing. Instead of cargo liners calling on various ports in a region, larger ships carrying more cargo will deliver and pick up all their cargo for a region at a central hub port. Cargo will then be transshipped between the central hub and various regional points.

The region significant to the Port of Montevideo includes Uruguay itself, Argentina, Paraguay, and Brazil. These four countries are also the original four Mercosur countries. Mercoser is a southern common market setup to facilitate the free flow of trade across country borders. The Mercosur countries have a regional population of nearly 200 million with an annual GDP of 2 trillion US dollars.

Ports competing to become the shipper’s regional hub of choice 
The ports in competition for the Mercosur region are the Port of Montevideo and the Port of Buenos Aires, which continue a longtime rivalry for the region's shipping business. There is also a more recent contender, The Rio Grande Port in Southern Brazil.

The competition among these ports to become a preferred regional hub is fierce. One weak spot for Uruguay as a regional hub port is its relatively small population. Because the population of Uruguay is small compared to Buenos Aires or southern Brazil, a higher percentage of cargo will need to be transported a longer distance to get to its destination. While Uruguay has one of the best road systems in the region, some suggest a railroad connecting Uruguay’s ports with Brazil would be a helpful addition to the regional movement of goods.

The strong points for the Port of Montevideo as a regional hub is its geographically strategic location, it’s relatively fast and efficient service, its experience with refrigerated shipping, its competitive prices, and being a “free port”, which doesn’t impose import duties on transshipping activities.


A yearly opportunity to visit the Port of Montevideo 


The Port is open to the public once a year during Uruguay’s annual Días del Patrimonio (Heritage Days). It's a weekend when many public buildings and facilities, including the Port of Montevideo, are open to be toured by the general public.
Port of Montevideo visitors board train to tour the port waterfront 
Días del Patrimonio is usually in September or October. In past years, visitors to the port viewed special maritime displays and rode a train along the waterfront to see the docks and various port activities.


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