JD Nielsen
Director General
APM Terminals
/
Insight

Constructing Mexico's Super Ports

Tue, 11/01/2016 - 09:08

As a result of its financial difficulties, ICA found itself unable to fulfil its contractual obligations to complete 212 the first semi-automated port in Mexico, TEC 2 in Lazaro Cardenas. Nevertheless, APM Terminals decided to carry on and meet the obligations alone. “Parting ways with ICA was an unforeseen event but was necessary to stick to our timeline for finishing the terminal by the deadline set out in our proposed concession,” says JD Nielsen, APM Terminals’ Director General. “The project was 60 percent finished when the decision was made and we moved forward as the general contractor.” APM Terminals divided the remaining tasks and solicited help from local contractors.

TEC 2 in Lazaro Cardenas is the first semi-automated port in both Mexico and in Latin America. The International Finance Corporation (IFC) and the World Bank financed half the cost of phase I while APM Terminals put up the other half. There are only 12 terminals of this type in the world and Nielsen says it will be a great opportunity for Mexico to showcase the port of Lazaro Cardenas. By semi- automating the terminal, it will be possible to move two containers simultaneously with special cranes. “TEC 2 will be extremely efficient in terms of speed and service,” says Nielsen. “Automation allows us to provide a consistent and high-quality service to all our clients at all times since it is not dependent on a specific person.”

APM Terminals also decided to automate various parts of the terminal, such as container storage, to reduce the number of potential safety hazards. “We are working arduously to make the port the safest and most secure workplace for our labor force,” says Nielsen. “Automated environments such as these also increase cargo security since people are not allowed to enter these areas.” The Lazaro Cardenas port will also have a tremendous economic impact on the surrounding area and the country, he says. “The city has a large number of skilled workers, which is a great advantage for us to offer competitive positions and well paid jobs to locals.”

When evaluating the future of these types of projects, Nielsen believes Mexico needs two superports, one on the west coast at Lazaro Cardenas and one on the east coast at the Port of Veracruz with a robust railroad network in between to connect Mexico’s major markets. “APM Terminals prefers to use the double-stack railway network that already exists in the country. Mexico is one of only four countries that have this advantage, which increases the efficiency of transporting,” says Nielsen.

These systems would allow Mexico to prosper, especially as trade in the east of the country continues to grow. “Lazaro Cardenas already is one of the most efficient ports on the west coast because it is well designed and built with a city at its side,” says Nielsen. “The rail network goes through Lazaro Cardenas, making it the port of the future due to its efficiency and structure.” The port plays a key role in the transport of cargo to and from the southeastern US, through the Kansas City Southern Mexico (KCSM) railway line.

Nielsen believes that, with the help of KCSM, super ports could supply the country’s interior through Mexico City, Queretaro, Monterrey and the US, covering 60 percent of the market. “We want to have a unit train that departs from our terminal directly to our facility in Mexico City, from which point we can truck cargo to our clients’ doors,” he says. “If all the participants play their role, a transportation network from Lazaro Cardenas to Mexico City could be a fantastic result.”

Mexico is new territory for APM Terminals and Nielsen is excited about the projects the company could carry out. “The country has a vibrant economy with expected growth of 2.7 percent this year, which is higher than many European countries and Latin America,” he concludes.