pilotage in argentina
DESCRIPTION
Rio de la Plata (Pilotage zone)TRANSCRIPT
PILOTAGE IN ARGENTINA
Rio de la Plata (Pilotage zone)
Argentina
• Emerging economy• Competition since 1991• Particular Pilotage System• Consequences
Actors
1991- Context• Neoliberal Government• Privatization by decree• Strong Lobbies• Business = Pilotage ??????
The decree…….
• The service fee is agreed between customers and pilots.
• A maximun rate is fixed
• Registration open (unlimited number of pilots)
• TARGETS:• Greater administrative
and operating agility• Free supply and
demand• Reducing the
argentine cost
Pilotage =Business
• 2 Errors
Pilots & agents /PARTNERS
Government mistakes
Explosive Mixture
• Pilot Owner (entrepreneur) + Explosive mixture • Intermediary
Context 1994
Pilot Owner - Entrepreneur
• Takes over 70% of the market • Strong support of young pilots, who
receive only 30% of their service.• Intermediaries = Improve their income
Imminent Conflict
30% Pilots Working for its owner
70% pilotsWorking under IMPA
CONCEPT
30%market4 services
X pilot x month70% market20 services
x pilot x month
First Stage: Impact• The government: failure
• Businessmen: big profits
• Pilots: economic inequalities
• Intermediaries: excellent business
Second Stage• News divisions (more companies)• IMPA (pilots threats )• Reaction of Intermediaries
• Pilots agreement
• 40% of argentine exports are made by San Lorenzo -Ocean route.
• A vessel must sail 330 NM to reach San Lorenzo from the Ocean.
• Requires 10 pilotages services (4 Rio de la Plata, 4 Rio Parana y 2 harbour pilots) inbound/outbound
INCREASED COSTS
Total cost of the Panamax
2003: U$s 92.849 2009: U$s 140.680
2011: U$s 172.045
2013: U$s 207.055
92.849
140.680172.045
207.055
0
50.000
100.000
150.000
200.000
250.000
U$sYear 2003 Year 2009 Year 2011 Year 2013
Impact of the Pilotage • Year 2003: 35,6% • Year 2009: 41,7%
• Year 2011: 43,8%
• Year 2013: 47,0%
35,6% 41,70% 43,80% 47%
Ano 2003 Ano 2009ANO 2011 Ano 2013
Year 2003 Cost of Pilotage
Year 2013 Cost of Pilotage
35 % 47 %
Results
Results• Increase in pilotage from 2003 -2013
• 2003: U$s 33.035
195 %• 2013: U$s 97.440
Third Stage: Final Impact• The government: Total failure
• Rates: Great increase
• Pilots: improving their incomes• Pilots employed: worsening • Intermediaries: maintain their incomes
kickbacks
Paradigm….
Thanks……