With its strategic location on the Mexican gulf coast, the port of Veracruz has gained a reputation of being Mexico’s most important commercial port. Administración Portuaria Integral de Veracruz, S.A. de C.V. (APIVER) oversees the port’s activities of receiving and shipping all types of cargo to and from places around the world. Rachel Hartman takes an inside look at the organization and its ongoing expansion project to accommodate even more cargo in the years to come.
Veracruz has long held a special spot in both the economic and cultural history of Mexico. In 1519, Hernán Cortés established the first port city in the New World there. In 1601, the port received its first vessels alongside the San Juan de Ulúa Fortress, a landmark that still looks over the port area today.
Over the years, the port has developed commercial ties with a long list of destinations. It currently receives more than 1,500 vessels per year. It also has connections with more than 80 ports around the world.
Of all the business it does, the port’s main interaction is with the United States, notes Juan Ignacio Fernández Carbajal, director of Administración Portuaria Integral de Veracruz, S.A. de C.V. (APIVER), the organization that oversees port activities at Veracruz. “Practically 50 percent of our cargo goes there,” he explains. The remaining 50 percent is divided among places such as Canada, Central America, South America, Europe and Africa. The port even has some commercial ties to parts of Asia, sending ships through the Panama Canal – which is just a short sailing distance from Veracruz – to reach the Pacific basin.
APIVER employs approximately 180 people to oversee the port’s activities. Through its operations, the Port of Veracruz generates an estimated 10,000 direct jobs, as well as 30,000 indirect jobs.
SOMETHING FOR EVERYONE
“Veracruz stands out as a port that handles absolutely all types of cargo,” says Fernández. Items passing in and out of its docks include: minerals, grains, containers, loose cargo, and petroleum. Fernández estimates that between 800,000 and one million vehicles will move through the port in 2011.
To properly accommodate the companies using its facilities, the Port of Veracruz has Internationals Ship and Port Facility Security (ISPS) code certification. It has also obtained ISO9001:2000 and ISO 14001:2004 certification. In addition to these, it is committed to preserving the environment and carrying out socially responsible policies for the city and its people. To carry out this policy, the port engages in various ecological and community projects.
The Port of Veracruz has a variety of terminals, including the largest container terminal on Mexico’s Gulf Coast and the country’s largest shipyard. It has connections to two major railroads: Ferrosur and Kansas City Southern de México. The port has easy access to a number of highways, making it efficient to move goods through Veracruz and continue on to their final destination. Veracruz serves as the main cargo gateway for Mexico City, which is located 430 kilometers west of the port.
Security of both cargo and personnel is a key priority for APIVER, and over the years the organization has worked to gain a reputation for Veracruz as one of the safest ports in the region. A perimeter fence surrounding the port is backed up by CCTV surveillance to monitor the coming and going of both individuals and vehicles in the port area. The port also makes use of gamma rays, x-rays, and security patrols inside the port to ensure safety.
PLANS TO GO BIG
APIVER first began operations in 1994. The organization was formed as a result of the Mexican government’s efforts to decentralize the country’s ports and encourage competition. Before 1994, the Mexican federal government controlled Mexico’s ports; starting in 1994, organizations like APIVER took over port operations.
Today APIVER maintains ties to the Mexican government and operates under the Secretary of Communication and Transportation; however, the organization has both financial and administrative autonomy. Under this system, excess annual revenue is invested in the infrastructure needs of both the port and surrounding community.
In recent years, due in large part to the port’s efficiency and competitiveness in the global market, APIVER has substantially increased the port’s cargo capacity levels. According to Fernández, the Port of Veracruz will likely handle 19 million tons of cargo in 2011, and in doing so, break previous port records.
The need to handle higher levels of cargo, together with a desire to accommodate fifth and sixth generation containerships, led officials at APIVER to develop an extensive expansion plan for the Port of Veracruz. Work on the expansion project first began in 2007. When finished, the port will have a Logistic Activities Zone (ZAL) with more than 30 new berths. It will also have warehouses, shipping yards, a new internal railway, dredging to accommodate the latest models of vessels, and improved infrastructure. Completion for the plan is estimated to take place by 2014.
Due to certain limitations in the current port area, APIVER decided to carry out the project by constructing a new port zone. This zone is located in the Bay of Vergara, which is northeast of the current port. To date, the Logistic Activities Zone, which covers 300 hectares, has reached a level of being 85 percent constructed.
When fully developed, part of this area will include a space where companies can add on value to their products, notes Fernández. “To products that are imported or exported, companies can add certain material or man hours to their products, either by using Mexican materials and labor or by using materials brought in from other countries by sea,” he explains. This strategic operation will take away the need to pay certain taxes on products that arrive in Veracruz. Companies will be able to make product modifications without having the items enter Mexico, and then export those same items on to a different final destination. “These activities would cover such things as assembly lines, vehicle accessorizing, and airplane parts,” says Fernández.
As it carries out plans to expand the port and looks into the future, APIVER has taken on the goal of improving its current processes. “We’re involved in a program that we’re carrying out together with the Port of Barcelona,” says Fernández. “The program involves creating an aggregated value to each of the steps involved at the port with the goal of optimizing each step. We also want to be able to guarantee all services – right now we’re guaranteeing containers.” This guarantee involves ensuring the quality of service and monitoring the length of time a product is in the port.
To improve transportation, APIVER is currently constructing a new roadway with a length of 20 kilometers. “With this we’ll eliminate all of the old roads that crossed practically the entire city of Veracruz,” says Fernández. The new road will help move cargo through the area in a more efficient way.
APIVER is also shifting away from paperwork. “We have a project underway called ‘Zero Papers,’” explains Fernández. “We’re practically throwing out all legal paperwork needed for importing and exporting any product, and moving it all on to a computer system.”
The first phases of the expansion project are expected to be completed by January 2012. When fully finished, the port will be able to handle three to four times as much cargo as it currently does, says Fernández. In doing so, Veracruz will continue to play an important role in Mexico’s commercial sector.