Q&A with Grupo Puerto de Cartagena

Ahead of TOC Americas 2019, the TOC team sat down with Giovanni Benedetti, Head of Marketing for host Grupo Puerto de Cartagena to talk about growth as a regional hub for shipping lines, logistics providers and shippers, investment in start-ups, smart and sustainable tech, and welcoming the TOC community back for the 2nd time to coincide with the port’s 25th anniversary.

TOC: How has your container traffic developed this year?

Giovanni Benedetti:

We are on target to reach 3 million TEU in 2019, which is a major milestone for our 25th anniversary year. We’ve continued to grow steadily for the past 5 years, with around 7-10 per cent increase in transhipment volumes annually and 3-5 per cent in domestic trade. Transhipment today is 77% of our volume and continues to outpace gateway cargo.

TOC: With alliances, M&A, bigger ships and Panama Canal expansion, we’ve been debating for years now at TOC about the new shipping landscape for the Americas. How have you seen things play out in 2019 and what’s the impact for you?

Giovanni Benedetti:                                                      

The expanded Panama Canal is still an ongoing process for us and just recently we saw another reshuffling of services in the region. Various services that were direct are now being transhipped, such as Mediterranean-West Coast South America cargo. The trend to larger ships continues, with inevitable impact for port operations. On the Med-Caribbean-Central America route, for example, we saw vessel sizes leap almost overnight from 2500 TEU to 7000TEU. 

Transhipment is absolutely growing across the region in line with carriers’ need to utilise large vessels in a more efficient way. By restructuring their networks, carriers can make huge savings in system costs and it’s this that’s driving decisions rather than absolute trade growth. 

We’ve seen recently some transhipment volumes moving from the Pacific to the Atlantic side of the Panama Canal, which is very interesting and rather unexpected. We are also seeing more and more north-south services take on a partial feeder role. That includes the expanded Eurosal XL service launched this year between West Coast South America and Northern Europe.

What does this mean for us here in Cartagena? Well, we are proud to be a carrier hub for big names including CMA CGM, Hamburg Süd, Hapag-Lloyd, Maersk and ONE based on our location, service levels and connectivity. In fact, UNCTAD and the World Bank said recently that Cartagena has the highest connectivity index of any port in the Latin region.  

TOC: So, what does it mean to be a hub port these days?

Giovanni Benedetti: 

We see ourselves as a hub in three different dimensions. Firstly, of course the ocean carriers. Secondly, as a hub for logistics service providers. For instance, last year Panalpina set up the first ocean freight hub in our free zone for Central and South American less-than-container-load (LCL) cargoes. This brand-new venture is adding volumes and services to Cartagena, with lots of container stuffing and stripping and cargo consolidation work.

We will shortly also open a new 23,000sqm international distribution centre for sports giant Decathlon, to serve the Americas including Chile, Peru, Colombia and even the US. Attracting multinational brands, retailers and manufacturers is the third dimension of Cartagena as a hub.

So, we are putting a lot of focus into going deeper into supply chain solutions for logistics companies and shippers, developing distribution centres and supporting services. Especially, we are putting lots of investment into perishables, where we are growing by 15-20% annually. That includes fruit, vegetables and also flowers, which have traditionally gone by air.

We are currently moving up to 300 containers of flowers a week and this trade presents a big growth opportunity for the future. Colombia exports 300,000 tonnes of flowers a year and if the whole trade converted to containers it would add 100,000 TEU to our throughput. Full conversion probably won’t happen, but even a percentage is an exciting prospect. 

If we look at this total basket of services we are now offering, we expect to handle 3.8-4 million TEU in 2020. That’s a huge increase. As I said earlier, a lot of that growth will be driven by transhipment as shipping lines looking to make better utilisation of the fleet. But attracting distribution hub traffic from logistics providers and multinational shippers is really important, too.

As part of this enhanced supply chain focus, we believe it’s more important than ever to work in port pairs with a secure trade plan for gateway cargo. We are currently working with our 5 main trading ports to add value for importers and exporters, understanding their needs from port to port, and seeing how we can jointly add value. Building loyalty with shippers focused around their specific supply chain needs is key.

TOC: As always, we have a big focus on digitalisation and automation at this year’s TOC Americas and for the first time, we are also hosting a start-ups panel. What is your strategy and vision for new technology?

Giovanni Benedetti:

We are making a lot of investment in technology including intelligent gate systems and online live trucking appointments, and we hope to join Tradelens soon.

As an experiment, we created DeltaX as an accelerator and incubator for start-ups. We received about 120 different applications in the first round and finally selected three, some of whom will join at TOC Americas on your new panel.

It will good to see how we can match start-up ideas with our needs and needs of our customers. So far, it’s been a very interesting process. Innovation is part of our DNA and we know that change is a constant. We are living in a very hectic environment and we can’t just sit and wait. 

TOC: IMO2020 is a very hot topic and high on the 2019 agenda for TOC Americas. What’s the Cartagena take on this? And sustainability in general?

Giovanni Benedetti: 

We have been electrifying all of our RTGs and are now 60-70% completed in going electric. We’ve also starting the process to deploy solar energy on a high scale, making a major investment that will help us power our reefers with clean energy.

For IMO2020, we are working with our local refinery – the most modern in the Americas - that is now producing ultra-low sulphur fuel oil and also with the bunker providers to be ready to support this big change for our shipping customers.

The key is to keep doing our bit to be part of a sustainable system. We have also looked at wind power. While we aren’t proceeding with that at the moment, we will keep exploring innovative solutions to reduce environmental impact.

TOC: We also have been talking at every TOC about the need for a new level of public-private sector relations to adapt to all the changes in technology and trade.

Giovanni Benedetti:

Yes, our biggest challenge is still to get government to keep up with the ever-changing nature of trade and it’s so important to bring them with us on the journey. We have to be very proactive in inviting them to understand what is changing and how we can collaborate to everyone’s benefit.

TOC: And finally… what do you expect to get out of this year’s TOC Americas?

Giovanni Benedetti: 

TOC is always such a great opportunity to learn, debate and meet many of our peers, customers and suppliers from the region and actually across the world. And we are especially looking forward to the chance to celebrate our 25th anniversary with the whole community attending. Welcome to Cartagena!

Registration Options to attend are here and for up to date information on TOC Americas you can follow the TOC company page on Linked in 

About TOC Americas

TOC Events has been leading successful maritime industry events for over 40 years. The nineteenth version of TOC Americas will take place in Cartagena de Indias, Colombia, October 29-31. For more information on delegate passes or exhibition stands, please visit:

https://www.tocevents-americas.com

About TOC Worldwide 

For 40 years, TOC Worldwide has provided the market-leading conference and exhibition forums for the global port and terminal industries and their customers. With a change of name to TOC Container Supply Chain, the TOC event portfolio is now evolving fast to attract a wider audience of container supply chain professionals. Taking place each year in the world’s four key shipping hubs – Europe, Middle East, Americas and Asia – each TOC is now a complete container supply chain event for its region, bringing together cargo owners, logistics providers, carriers, ports, terminals and other key members of the container supply chain to learn, debate, network and foster new business solutions.