Marine terminals hot topic at Mexico conference
Even as 2007 looms as an unpredictable year for the U.S. economy and its associated trade activity, the financial worth of marine terminals was a dominant source of discussion on the opening day of the Terminal Operators Conference Americas in Acapulco, Mexico Tuesday.
The conference, which has brought more than 300 delegates from Latin America, North America and Europe, began amidst the recent purchase of four U.S. terminals by a Canadian teachers' pension fund, the not-soon-forgotten DP World controversy and the swirling interest of private equity firms in terminals all over the world.
'The question is, how will the terminal operator industry react to a seller's market,' said James Brennan, a partner in Norbridge, a transportation and logistics consultant group. 'Will they react like container shipping lines and airlines, where every peak leads to capacity increases, followed by oversupply and a trough of two years? Or will they take cues from the rail industry, who have seen the benefits of an oligopoly.'
Brennan also had some advice for terminal operators that will likely make shippers and truckers none too happy.
'Ten to 15 percent of revenue for terminal operators comes from detention and adding capacity,' Brennan said. 'It's quite a windfall. Reduced free time has increased revenue, but it hasn't changed dwell time. The take out of this is terminals aren't charging enough to change behavior.'
Aside from the underlying theme of acquisition, the conference focused on port demand and capacity for 2007. One of the inherent constraints on growth is a looming trucker shortage for port drayage activities.
Chile and Colombia sign trade pact
Chile and Colombia have signed a bilateral trade agreement that will eliminate duties on goods shipped between the countries.
The agreement was signed Monday by Michelle Bachelet of Chile and Alvaro Uribe of Colombia. It must now be ratified by the legislative bodies in each country.
Colombia and Chile had trade volumes totaling nearly $700 million in 2005.