Volume 11 | Issue 2 | Year 2008

From a satellite-eye view, the port is just a geographical dimple interrupting the curve of Mexico’s Gulf Coast as it rises toward the southern tip of Texas. Zooming in reveals breakwaters branching out from the land like spindly spider legs hugging protectively around the placid inner harbor waters. Zoom in even more (and here you would likely be in on of the helicopters buzzing the heads of cranes and radar towers) and you can see thousands of containers stacked for shipping. More than 100 ships plow their wakes into and out of the harbor every month.
Welcome to the Port of Veracruz, one of Mexico’s busiest. Though it’s been a port for hundreds of years, it has been under the management of Administracion Portuario Integral de Veracruz (Apiver) for only about 12, and during that time traffic at the port has shot up to levels never before seen in Veracruz. With all that business going on, Apiver is preparing to invest $600 million over the next five years to increase the port’s accessibility and capacity.

The project includes increased connectivity to the country’s rail system, deepening of the harbor to accommodate some of the biggest ships in the world, and a literal doubling of the size of the port’s service areas. The eventual goal, said marketing chief Ernesto Garcia Marin, is to build what would essentially be a second port – and that one wholly owned by private companies, rather than simply concessioned from the government.

The Port of Veracruz has a history that goes back to the days of the Spanish conquistadores, when Hernan Cortez landed there in 1519 to begin the Spanish conquest of Mexico. Through the years, the city has been sacked by pirates, captured by the French, and put under siege by the Americans, a popular object of conquest for the simple reason that it was one of Mexico’s most valuable ports. The Port of Veracruz and the town that surrounds it has often been the launching point for some of Mexico’s most important exports, like silver, as well as its most essential imports.

That, at least, has remained true to this day, only on a much larger scale. Throughout almost the entire 20th century, Veracruz was in the hands of the government and government unions. The modern version was inaugurated in 1905, and up through the
1990s the port remained an important one in the country.

Like everywhere else in Mexico, however, the 1990s were an important decade for change in Veracruz. The operation of the port was privatized early on in that decade, meaning that the government began seeking private companies to care for this public good. In 1994, Apiver was made possible by another change in the ports law that created a framework for private port administrators, and Apiver has been in charge ever since.

The operations that Apiver oversees truly are massive. Also from that satellite view (available on www.apiver.com) one can count 12 docks, each one with its own niche to fill: the cement dock, for example, which sits alongside the largest dock of the 12, the container dock. The amount of machinery operating at the port at any given time is massive as well, and it includes more than 100 cranes of different sizes and styles, scores of trucks, a fire squad, half a dozen tug boats, and more than 100 gravity loaders, just to give a few examples.

Along with the equipment come scores of private companies – sub-concessionaires that offer the kinds of services that a port might need. Customs services, for example, are abundant, with about 300 customs agents to sort through the hundreds of thousands of containers that enter and leave the port every year. Also, the port offers the services of 26 shipping lines, 17 shipping agencies, and even two railroad service companies: Ferosur and TFM.

All that adds up to the moving of a lot of stuff over the course of a given year. Last year, like every year since at least 1998, was a record setter in which the port moved 18.5 million tons of cargo worth about $2 billion in tax revenue, Marin said. Compare that to the three million metric tons the port was dealing with when Apiver took over and it’s clear that the administrator has made a huge difference. More than 1,500 ships docked last year at the port to load or unload, though the majority came to do the latter: Veracruz is primarily an import destination, with 80 percent of the ships that stop there coming to drop something off.

About 35 percent of those imports, Marin said, can be chalked up to agriculture products and container traffic. Much of the rest is raw materials like steel to feed Mexico’s booming construction market and its automotive factories. The remaining 20 percent of boat traffic at Veracruz comes from exports. A big client of the port, for example, is Mexico’s automotive industry. Nissan Mexico shipped its two millionth car though the Port of Veracruz this year, and a total of 2.38 million metric tons of port traffic came from these and other car exporters in 2006.

Like the year before, 2007 promises to be a record-breaking year for Apiver. The Authority is projecting that by year’s end, the port will have moved 19.8 million metric tons of cargo, a significant increase over last year’s 18.5 million. Marin said Apiver makes about $80 million annually from fees received for the operation of the port, about half of which goes into the piggy bank to be invested later in expansion and repair projects.

Compared to the rest of the country’s ports, Veracruz ranks near the top in several important categories. It has the most diversified cargo shipping profile of any port in the country, with more than 7,500 customers. The value of the cargo the port moves is also one of the highest in the country, second only to the port in Nuevo Laredo. Now, however, Veracruz is making a bid to move up, with one of the ports biggest projects ever launched this year.

Marin said the new expansion, planned to take place over the next five years or so, is expected to cost about $600 million. The construction will include everything from the mundane to the transformational. For example, the dock reconfiguration will widen and deepen the port’s main basin so that the port will be able to accommodate the new generation of large ships now plying the world’s waterways. Likewise, the plan intends to increase the connectivity between the port’s infrastructure and that of the railroads that take goods directly to the capital district in the center of the country.

Bigger things are in the works as well, the main one being a plan to double the physical size of the port area by developing an additional 300 hectares of space. That space can be used for a variety of things – storage, customs, workspace – and it will give Apiver additional concessioning options. That first phase should be completed by 2010, Marin said. Following, the authority plans to launch a second phase for completion in 2015 that will essentially be a new port with 400 developed hectares that is completely private.

“It’s a system that works much better” than the public management of the port that is the port’s legacy, Marin said.

While those developments shake themselves out, the ships will continue their coming and going to this Gulf of Mexico port, same as they have for almost 500 years.

Previous articleCore Values
Next articleBig & Getting Bigger