Latin American model of port privatization

Twenty years of successful operations at MIT

On April 6, 1995 the container vessel, “M/V Monterosa,” docked at the incipient Manzanillo International Terminal (MIT) of Colon, inaugurating what is known today – twenty years later – as a model of port privatization in Latin America.

This was recognized by the then executive of the United Nations Conference on Trade and Development (UNCTAD), Jan Hoffman, in his book “The Latin American Ports: Results and Determinants of Private Sector Participation”.

Hoffman notes that MIT, the port company of the US group Carrix, won the concession in 1994 as the first private port in the region. With a dock 600 meters long, two gantry cranes, to which three others were added in October, and just 200 employees, almost all residents of Colón, MIT handled in is first eight months of operation 176,840 TEUs. Today MIT handles about 2.0 million TEUs with 1,300 direct employees and 800 indirect, of which 93% are from the province of Colón.

Aerial view of Manzanillo International Terminal.

Aerial view of Manzanillo International Terminal.

Commenting on its modest, but promising, start-up, Hoffman said: “This terminal, with an operator who started from scratch in 1995, handled 860,000 TEUs in 1999, becoming the first container terminal in Latin America.” Before that – in 1996 – the prestigious magazine Containerisation International selected MIT as among the ten most efficient container ports in the world.

MIT has been a key in the first place that has been held by the port complex of Colón (Cristobal, Colón Container Terminal and MIT) since 2011 among the ports of the region, according to the Economic Commission for Latin America and the Caribbean (ECLAC). In 2014 this complex handled nearly 3.3 million TEUs, of which 63% were by MIT.

Its high productivity is largely responsible for the high score (6.4 points out of a possible 7.0) given in 2013 by the Global Competitiveness Report of the World Bank based on a survey of users of the ports in Central America. Noting the low productivity of the Central American ports that move just about 17 containers per hour, Markets & Trends magazine said in its issue of April-May 2013 that, “The exception is Panama, which has ports like Manzanillo, able to work up to 45 units per hour.”

Carlos Urriola, vice president of Carrix, was previously marketing manager and general manager of MIT, and he attributes the success of the company to strict compliance with its commitment to “provide reliable service to its clients through excellence in productivity and quality.” Its current CEO, Stacy Hatfield, believes that the high productivity of MIT is the result of a combined effort in training, improved labor relations, and incorporating the latest technology into their operations.

Meanwhile, Manzanillo has continued to expand, and is concluding an expansion program at a cost of $300 million which includes the construction of three new docks, acquiring 12 cranes, additional patio equipment and dredging to 16.5 meters the access channel, the turning basin and alongside piers, to allow safe access to super post-Panamax ships.

Facing the commencement of operations of the third set of Panama Canal locks in April 2016, MIT has now been prepared to expand its capacity from 2.5 to 4.0 million TEUs. “With five docks and cranes equipped with modern high technology, the MIT port complex is prepared to continue providing a highly reliable and efficient service now and in the foreseeable future,” concluded Hatfield.

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