port logistics and competitiveness in latin america and ... 2014... · competitiveness in latin...

Tomás Serebrisky Principal Economic Advisor. Infrastructure Department. Inter-American Development Bank

[email protected]

June 18th, 2014

InterAmerican Committee on Ports

9th Ordinary Meeting

Port Logistics and

Competitiveness in Latin

America and the Caribbean

Port Efficiency and Competitiveness in Latin America and the Caribbean Tomás Serebrisky

mailto:[email protected]

Productivity in LAC is lagging behind

Source: Penn World Table 8.0 (January 2014)

Note: Total Factor Productivity measures the growth of GDP over the combined contributions of total hours,

workforce skills, machinery and structures and IT capital.


0.5

0.6

0.7

0.8

0.9

1.0

Logistics costs are key to competitiveness: Latin America has plenty of room to improve

0

5

10

15

20

25

30

Production losses: Share of primary

production that does not reach the market

Logistics cost as a share of market value

Inventory Level

(%

)

OECD LCR

Source: World Bank, Guasch (2004, 2008)


Logistics costs are vital as Latin America opens to the world and

trade expands

Source: World Development Indicators


Logistics Costs are key to Poverty Alleviation: Logistics is a significant component of retail food price

Sha

re o

f H

H B

udg

et s

pen

t o

n fo

od

GDP per capita (log)

Source: Dessus, et al, World Bank (2008); data from household surveys.

Shar

e o

f h

ou

seh

old

bu

dge

t sp

ent

on

fo

od


Where does LAC stand in logistics performance? Average: no better than other developing regions

3.7

2.9 2.9 2.8 2.6 2.6

2.5

OE

CD

Dev

elop

ing E

uro

pe

and

Cen

tral

Asi

a

Eas

t A

sia

and P

acif

ic

Lat

in A

mer

ica

and t

he

Car

ibbea

n

Sou

th A

sia

Reg

ion

Mid

dle

Eas

t an

d N

ort

h

Afr

ica

Sub

-Sah

aran

Afr

ica


2.6

2.8

2.7

2.8

2007

2010

2012

2014

Average Logistics Performance Index 2014 By regions

Evolution of the Logistics Performance Index Latin America and the Caribbean


Ports: fundamental to improve logistics in LAC

Supply chain globalization has made the economy more

transport and container intensive Over the last 10 years in Latin America:

5% 6% 9%

GDP GROWTH:

INTERNATIONAL TRADE GROWTH:

CONTAINER THROUGHPUT GROWTH:

International trade opening

Supply chain globalization

New production models

More outsourcing

Cargo Containerization

Empty container handling

New shipping lines

Transshipment

Globalization has been transport intensive



Perception of port quality varies widely in LAC…

8

6.4

5.6

5.2

5.2

5.1

5.0

4.9

4.7

4.6

4.3

4.0

3.9

3.9

3.8

3.6

3.6

3.5

3.3

3.3

3.2

3.2

2.6

2.5

2.4

1.9

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

PanamaBarbados

ChilePuerto Rico

JamaicaSurinameUruguay

Dominican RepublicHonduras

MexicoGuatemala

EcuadorEl Salvador

Trinidad and TobagoArgentinaParaguay

PeruBoliviaGuyana

ColombiaNicaragua

BrazilVenezuela, RB

Costa RicaHaiti

Average

Source: World Economic Forum (2013)


Worldwide container shipping line services, zooming in Latin America and Caribbean region

Caribbean transshipment hubs and large import/export

markets concentrate shipping lines


Port quality and liner connectivity in LAC

10

HTI

VEN

BRA CRI

GUY NIC

COL PER

ARG HND

TTO GTM SLV ECU

MEX DOM

URY

SUR JAM CHL

BRB

PAN

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

0 5 10 15 20 25 30 35 40 45 50

Per

ceiv

ed Q

uali

ty o

f P

ort

In

fra

stru

ctu

re 2

01

3 (

WE

F)

Liner Shipping Connectivity 2013 (UNCTAD)

Better perceived

quality than

connectivity

Better

connectivity

than perceived

quality

Low perceived

quality and low

connectivity


-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

US

$ 2

01

3

Source: World Bank Doing Business (2013)

How much does it cost to export a container in LAC? Costs much higher than in OECD countries (bigger economies

have high costs!!)


What do we know about

port efficiency?


13

Number of Ports with

Container Throughput

> 50,000 TEUs

Average Container

Throughput (´000 TEUs)

Average Terminal

Area (m2)

63

141

0

20

40

60

80

100

120

140

160

Latin America

and the

Caribbean

Rest of the

Developing

World

587

1566

0

200

400

600

800

1000

1200

1400

1600

1800

Latin

America and

the Caribbean

Rest of the

Developing

World

1233

1682

0

200

400

600

800

1000

1200

1400

1600

1800

Latin America

and the

Caribbean

Rest of the

Developing

World

The average port in LAC handles less throughput than

the average port in the rest of the developing world…

*Rest of the Developing World: Countries outside LAC with GDP per capita under USD20,000. Source: Data collected from Containerisation

International.

LAC: 37 million TEUs in 2010, 14% of the developing world total.


14

Average Total Length of

Berths (meters)

Average Number of

STS Gantry Cranes Share of Private

Participation in Ports

315

728

0

100

200

300

400

500

600

700

800

Latin

America

and the

Caribbean

Rest of the

Developing

World

3.3

10.6

0

2

4

6

8

10

12

Latin

America

and the

Caribbean

Rest of the

Developing

World

60% 65%

20%

30%

40%

50%

60%

70%

80%

Latin

America

and the

Caribbean

Rest of the

Developing

World

…and is also smaller in terms of infrastructure assets

(terminal area, length of berths and cranes)

*Rest of the Developing World: Countries outside LAC with GDP per capita under USD20,000.

Source: Data collected from Containerisation International.

50% of LAC ports have rail connection, the same

proportion as in the developing world.


In terms of time productivity, there is large

variation among ports…

15

0 20 40 60

Puerto Limón - CR

Acajutla - ES

Santo Tomás de

Castilla - GUA

Puerto Cortés - HND

Cartagena - COL

Caucedo - DR

Manzanillo - PAN

Exolgan - ARG

Ship Productivity Moves/ship-hour, for calls involving less than

500 moves

Acceptable range

0 5 10 15 20

Puerto Limón - CR

Cartagena - COL

Acajutla - ES

Caucedo - DR

Puerto Cortés - HND

Manzanillo - PAN

Santo Tomás de

Castilla - GUA

Exolgan - ARG

Ship Delay Average time in hours between vessel´s

arrival at the port and at the berth

Acceptable

range

Source: Kent, P (2011) How Fit are Central America´s Ports? World Bank


Measuring port efficiency is a difficult task Benchmarking studies have addressed efficiency with Partial Productivity

Indicators or with the estimation of Technical Efficiency Frontiers

Port

Efficiency Port access

time

Hourly load

time

Ship

waiting

time

Customs

Other

administrative

procedures

Hourly

unload time

Focus on Technical Efficiency:

A technical efficient port generates the maximum container throughput

with the lowest quantity of infrastructure inputs


Distribution of technical efficiency in LAC ports (average 1999-2009):

Source: Morales Sarriera, J., Serebrisky, T., et al. (2013) Benchmarking Container Port Technical Efficiency in Latin America


-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

TE

Us

'00

0 (

av

erag

e 2

00

0-2

00

9)

Technical Efficiency (average 2000-2009)

Correlation = 0.46

Port size and Technical Efficiency

Is there a minimum efficient scale?


Overall technical efficiency in LAC ports is 43%

(Africa 30% and Europe 60%)

Good news: TE has improved significantly!!

36 37

40 38

40 43 43

45 47

51 50

30

35

40

45

50

55

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Tech

nic

al E

ffic

ien

cy, %

Compound Annual Growth Rate = 3.2%

Source: Morales Sarriera, J., Serebrisky, T., et al. (2013) Benchmarking Container Port Technical Efficiency in Latin America

Average technical efficiency growth in LAC over 1999-2009:


Data, data, data… Can’t do better without it

Source: IADB (2014) Freight Logistics Statistics Yearbook for Latin American and the Caribbean


Final Remarks

- Logistics costs are key determinants for productivity,

competitiveness and poverty alleviation

- Logistics and port quality: LAC is not in a good position

relative to other developing regions

- Growth in international trade has put pressure on ports to

accommodate increasing demand: expansion of

infrastructure is not the only solution. What about

efficiency?

- Data availability is a major constraint. Scarcity of data

does not allow a thorough benchmarking of our ports.

Major barrier to improve public policies.


port logistics and competitiveness in latin america and ... 2014... · competitiveness in latin...

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