The opinions expressed in this unedited document are the author’s alone and not necessarily those of the Organization

Courtesy translation provided by Transport Canada

Table of Contents

Latin America: Container Movement through Ports

Source: ECLAC – Marine Profile

This proposal is for discussion and its contents are not final until they have been commented on and approved by the various transportation authorities. The courses of action proposed herein are also provisional, and alternative or complementary proposals may be made.

This proposal is based on immediate predecessors that reflect consensus already achieved and on which we can move forward: the conclusions of the Profile of Regional Transport Systems of the Americas, the ministers’ statement at the third ministerial meeting held in New Orleans and the recent definition of the so-called terms of reference of the WHTI Executive Committee.

In proposing a plan of integration or action for integration, it is necessary to think about the purpose of the analysis, the goal being sought, the justification of the initiative, and the time frame in which the proposal is feasible and useful.

The object of analysis of the action plan is how transport operates in serving trade in goods and services between regional blocs in the western hemisphere. The main goal of the plan for integrating regional transport systems is to design and propose better solutions, taking into account the situation and advancement of each regional bloc. The justification for the action plan lies in the need for transport to contribute to increased trade in the hemisphere in view of the expected and announced expansion of free-trade areas in the Americas. The time frame of this proposal is 3 to 5 years, so that by 2005 the three central points of the proposal will have been consolidated: definition of continental transportation routes as priorities for improvement, hemispheric institutional coordination mechanisms and development of transportation information systems.

Keep in mind that the needs, obstacles and possible strategies for the integration of transportation systems in the hemisphere are covered in regional and national plans and that both the agreements in force and the initiatives under way should be references for the integration of transportation systems in the hemisphere. The hemispheric plan must accompany and support these initiatives and studies and avoid duplication and interference as it is developed. Of particular importance in this regard are the recent integration initiative signed by the South American Presidents and the studies and projects under way throughout the hemisphere.

In summary, this proposed plan of action for the integration of transportation systems focusses on:

1) creating a transportation information system for obtaining data and cooperation directly from those involved in the sector;

2) specifying transportation and trade routes between regional groups in the hemisphere for study and work; and

3) creating hemispheric institutional coordination mechanisms as a way to design and propose solutions.

These features should help to promote, in the trade and transport routes considered, the development of transportation clusters for pilot experiences of best practices in quality of service; interaction between users, operators and authorities; interoperability of modes of transportation; interconnectivity of facilities; efficiency of transfer, assembly and distribution; optimal use of information systems; streamlining of procedures; and compliance with international environmental, labour and safety standards.

This document must be considered by the Executive Committee of the Western Hemisphere Transportation Initiative and responds to a request made by the transportation ministers in New Orleans in December 1998, the text of which reads as follows:

"Based on the discussions of this ministerial meeting and the conclusions and recommendations of the "Profile of Regional Transport Systems of the Western Hemisphere", prepared by ECLAC, we ask that organization, in consultation with the Executive Committee of the Western Hemisphere Transportation Initiative, to prepare a plan of action to integrate the transportation systems in the region for accomplishing effectively the objectives and vision described previously, including identifying the fundamental transportation policies that could be adapted, focussing particularly on the vital role of ports as crucial entry and departure points for the intermodal transportation of freight and passengers. The analysis and policies recommended in this plan of action, which must be concluded so that we can review it and begin actions within a year of this ministerial meeting, must emphasize the important role of transportation in economic development and in the growth of trade and tourism in countries of the western hemisphere, including the small and island nations of the region."

This proposal is for discussion and cannot be considered final until it has been commented on and approved by the various transportation authorities. The courses of action proposed herein are also provisional, and alternative or complementary proposals may be made.

In developing this document, we have considered the principles of connection and convergence of regional transportation systems in the hemisphere arising from the ministerial statement at the meeting in New Orleans in December 1998, which in turn was largely based on observations and recommendations in the Profile of Transport Systems of the Americas prepared by ECLAC for the same occasion.

Developments and initiatives under way in some regional systems that affect the actions proposed herein were also considered. In this regard, the comprehensive studies and plans for transportation infrastructure and services being carried out in the ten countries of South America and in the Central American isthmus are worth pointing out for their scope and possible repercussions in the medium term. The Brasilia Declaration and its annex referring to a plan for the physical integration of the southern continent, recently signed by the presidents of the twelve South American countries, also constitutes a new and fundamental reference point for any hemispheric initiative.

It is also necessary to mention that these proposals for action are based on current knowledge of transportation operations in interchange between transportation systems. Without attempting to change the share of each mode in this exchange, we are striving here for more interaction among them with a view to future development of intermodal services that permit greater continuity, fluidity and homogeneity in transportation operations throughout the hemisphere.

Finally, it should be kept in mind that gradual development is considered feasible for building a hemispheric system with connections to existing subsystems, without initially altering the functioning and evolution of the transportation systems in each regional bloc, until the possibilities for interconnection are exhausted.

This proposal is based on three immediate predecessors that reflect consensus already achieved and on which we can move forward: the conclusions of the Profile of Regional Transport Systems of the Americas, the ministers’ statement at the third ministerial meeting held in New Orleans and the recent definition of the so-called terms of reference of the WHTI Executive Committee. These three documents lead to the definition of the scope of this plan of action, priority areas and the institutional mechanism for implementation. These three categories are presented below.

Expected Development of Hemispheric Patterns

The profile of regional transportation systems in the Americas brought out some features of transportation for international trade in the hemisphere:

In this context, the Western Hemisphere Transportation Initiative (WHTI), whose primary purpose is the integration of existing regional transportation systems, must focus on developing sea-land intermodal services, keeping in mind the particularities and progress of each regional bloc and its connections to the rest of the world.

For this, the WHTI can adopt a three-part approach:

Goals

What is the purpose of integrating transportation systems in the Americas? Various answers can be given depending on the scope and depth of the process proposed. The general purpose of improving trade in goods and services between regional blocs can be achieved with various levels of integration of transportation systems.

The specific goals of the transportation sector for trade are manifold, including cooperation on improved technology transfer and removing possible trade barriers, adoption of uniform technical standards for equipment, international agreements to connect systems for smoother flow of operations between them, harmonization of regulations, opening of regional markets to operators from other parts of the hemisphere, and creation of a single or open market for the whole hemisphere. The above are given in increasing order of integration.

These items require a policy decision once their impact on national and regional plans has been considered. The proposal presented here suggests going forward without altering the initial situation of each regional bloc or aiming for multilateral opening of transportation services markets.

Justification

The justification of the plan to integrate the transportation systems of the Americas lies in its authors’ expressed desire to have a hemispheric system serving the processes of trade opening and economic integration already under way and those still under development that are expected in the medium term.

The Summit of the Americas, of which the Western Hemisphere Transportation Initiative is a part, and the Free Trade Area of the Americas (FTAA) process are natural references for the WHTI.

Furthermore, each country and regional bloc in the WHTI has its own circumstances and processes that justify its contribution to the integration of regional transportation systems in the hemisphere. The large growth in trade within the hemisphere and the many agreements between regional blocs, the multilateral or bilateral agreements between individual countries or groups of countries, and the multilateral agreements between countries in the various regional blocs are additional equally relevant reasons when considering the integration of transport in the hemisphere.

Time Frame

For the work of the WHTI, in practice the ministers have met every two years. This proposal is considering a four-year time frame, so that by 2005 steps will have been taken to allow synchronization with progress made in negotiating the Free Trade Area of the Americas (FTAA). Within this time frame, we hope that the three central elements of the action plan will have been created and will be operating and that the WHTI will have the ability and knowledge to develop transport policies applicable throughout the hemisphere as part of a formal move to greater trade openness.

The structure proposed here meets the need for a strategic plan on a specific topic and using reliable information.

Specifically, the proposal is to integrate transportation systems around the following points:

In accordance with the conceptual framework, the immediate background and the general diagnosis of the intermodal transportation situation in the hemisphere, mentioned earlier, the proposed plan of action focusses on the main hemispheric trade routes chosen for connecting the infrastructure and services of regional transportation systems. If this effort is to succeed, the participation of the various business sectors concerned, users and researchers, as well as technical cooperation, are required. The proposed information system should enable ongoing contact with these sectors.

Each of the areas would include initiatives in the form of projects, measures, policy development and possible agreements for implementation. Although presented separately, these areas are in fact part of the same coherent whole, interact with one another, are related at many levels and seek the integration of transportation by establishing complementary mechanisms for definition, action and information.

The areas could interact through centres of excellence for connecting regional systems. In fact, the interconnection of regional transportation operations in the hemisphere is essentially a matter of land and sea terminals. That is, it concerns the interfaces between transportation systems at the borders of each regional bloc.

These borders set the limits of customs territories and are also technological and business frontiers and set boundaries for markets and the application of regulations, tax systems, labour and environmental laws. The connection must also be at the system level to include all the relevant factors, since changing one of the components will affect the others and the overall efficiency of the system.

The promotion of transportation clusters is the mechanism proposed here to achieve this systems approach and create nucleuses of best practices, both to ensure better interconnection of regional systems and to set examples for each regional system and thus benefit operators and the sector as a whole in these regional units.

The points to be developed in each of these areas are summarized below.

The proposal is to form a system for sharing information and data, using the structures for information and document management in the existing national and international institutions in the hemisphere. Three levels may be necessary:

This knowledge network would be supplied with input from the member organizations. Thus, for example, the statistics systems under development like SETAS or WHTDS, the Central American transport information systems or the DITIAS project would be part of the information network and make their data bases available; the regional cooperation organizations would participate in the research networks together with the universities but also in the institutional network. Transport service users and providers would also be on the network in any of the information and research areas.

Development of the network could be entrusted to an organization in the region with experience in creating and maintaining information systems, organizing seminars and conferences, supervising research programs and contacts in the public and private transport sectors. The initial task would be to develop a Web site on the Internet that would serve as a clearinghouse for information and contacts and that could later be used to disseminate news and organize meetings.

Once the institution responsible is selected, the network should be fully operational in a year. The network should be self-financing.

Interconnection of Regional Transportation Infrastructure and Services

 

 

The proposal is to identify American transportation networks that connect regional systems and to analyze how they operate their services and infrastructure and operating environment. Subsequently, solutions may be designed to develop integrated transportation systems in these hemispheric networks.

The proposed networks would consist of:

Under the responsibility and supervision of the Executive Committee, the responsible regional organizations in each bloc would be asked for the available studies on the following aspects:

The Executive Committee could ask a regional or national organization to prepare proposals for developing integrated systems with recommendations concerning best practices in quality of service; interaction between users, providers and authorities; technological developments; interoperability of modes of transportation; interconnectivity of facilities; and compliance with international environmental, labour and safety standards.

Keep in mind that the region has broad experience with infrastructure and service networks, which makes this activity much easier. The needs, obstacles and possible strategies for the integration of transportation systems in the hemisphere are covered in regional and national plans, and both the agreements in force and the initiatives under way should be references for this part of the action plan, avoiding duplication.

Of particular importance in this regard are the recent integration initiative signed by the South American Presidents and the studies and projects under way throughout the hemisphere.

At the regional level, mention must be made of the Central American Transportation Study (ECAT) and the South American Transportation Service and Infrastructure Survey (DITIAS) as examples of wide-ranging initiatives aimed at developing integrated transportation systems in these two subregions. Both projects should move forward in 2000.

At the national level, major initiatives in this regard are under way, including those in the USA, Mexico, Colombia, Venezuela, Peru, Bolivia, Chile, Brazil and Uruguay, which have adopted strategies to promote and develop integrated transportation systems.

As for the legal structure, the Andean Community and MERCOSUR each have their own international standards for multimodal transport. The Conference of Ministers of Transport, Public Works and Communications of South America has approved a draft multimodal standard for the ten member countries, under the partial ALADI agreement.

Within six months, priority routes should be identified and in 18 months a detailed proposal of possible actions at the selected nodes and links should be available. The activities should be financed by the participating organizations.

Institutional Cooperation

The WHTI should fulfil one of its basic objectives, which is to recognize the prior existence of regional blocs with their own standards, institutional structures and progress, so that it can use their experience and on that basis develop a process to bring these systems together.

Institutional cooperation should be the responsibility of ministerial meetings and the WHTI Executive Committee with the support of a group of inter-subregional experts who will analyze the following aspects applicable to the routes identified for connecting the regional transportation systems in the hemisphere:

1) Standardization and application of compatible or uniform standards for:

Within 12 months, the aspects on which progress can be made should be identified and within 18 months there should be a detailed proposal of possible actions in each case. The activities could be financed by the participating organizations.

A recounting of obstacles and possible solutions for intermodal transportation systems in the hemisphere follows. It is based entirely on the observations made at a seminar /1 on transportation networks and logistics. The detailed systematic presentation of this seminar is a model summary of the aspects to consider.

This is only for reference and is not intended to be an exhaustive list of points to cover in developing integrated transportation systems under the action plan.

Elements Required to Promote Intermodal Transport

Intermodality will occur only when there are some economic, financial or environmental benefits. Some of these benefits are related to the geographic context with freight movements over long distances; some are due to technological advances such as dual-cargo railway cars; and others arise from service opportunities presented by interruptions in the transport chain, like transshipping.

Concentration of traffic: a critical mass or volume of traffic is necessary to support the high frequencies, low transportation service costs and heavy investments in infrastructure and logistic support. Intermodalism has been less successful for small countries, small companies and small traffic flows.

High quality of service: a high quality of service is required in all transportation modes of the intermodal chain; a weak link means that this quality cannot be achieved. Individual modes must be supported with high-quality infrastructure and logistics in order to provide safe and reliable service, which is costly. To minimize the investments required, it is necessary to concentrate on providing intermodal services in specific corridors, instead of setting overly ambitious objectives to serve all routes.

Efficient transfer points: transfer points seem to be one of the main bottlenecks in intermodal chains. This is partly due to uncertainty about responsibility for them and partly because many of the transfer points now in use were adapted from old rail yards and port installations that were not designed for this purpose and are poorly located in relation to the existing needs.

Standardization of equipment and operating procedures, documentation and information technology systems. Agreements on legal liability. Standardization is crucial for intermodal handling of international cargo flows.

Elimination of legal and regulatory impediments: In recent years, deregulation has been very successful at opening new investment opportunities for intermodal transportation and incorporating the private sector in this activity. This has been particularly evident in the United States and Latin America.

Organizational structures suitable for the transportation industry: intermodal transport has been more efficient on trade routes where carriers are concentrated. The process of concentration has occurred in different ways in different parts of the world: in the United States, through vertical integration; in Europe, partnerships and the freedom given to national carriers to form global alliances. Intermodal operations are increasingly concentrated in a small number of companies or consortiums, raising the twofold challenge of maintaining competition and of ensuring market access to new participants with innovative ideas but no established base of traffic.

Efficient information systems: cargo and the movement among the various modes of transport in an intermodal chain must be monitored and supervised. Significant progress has been made in recent years, but much still remains to be done.

Obstacles to Intermodalism

Conflicts of interest: in an international distribution chain there are many potential conflicts of interest among the various parties involved. Conflicts of interest occur not only between the different modes in the chain, which are anxious to protect their established position and current market share, but also between the carriers and governments in neighbouring countries. It may be the result of competition for jobs and investment, or different cultural traditions; it may also reflect different political values and decision-making procedures, or be due to different taxation and rate-setting regimes.

Conflicts of interest also arise between governments and private-sector companies involved in intermodal transport: governments seek to maximize the economic and environmental benefits of intermodalism, while private enterprise is more interested in profits. There are also tensions between users of intermodal services, with some seeking efficiency and lower costs while others want to maintain their freedom of choice.

Clearly, the authorities must work together to resolve these differences and create an environment in which competition can be complemented by cooperation and a forum where the different parties can come together and identify projects of mutual benefit.

Lack of financial resources: The growth of intermodalism has been delayed by the widespread shortage of public funds for investment. This problem can be solved in various ways. Public-private partnerships seem to be the most promising solution to finance transportation infrastructure, since it combines the public sector’s experience in developing infrastructure and policy with the business viewpoint and willingness to accept risks of private enterprise.

Regulatory obstacles: Despite the widespread deregulation of transportation in recent years, some regulatory obstacles to intermodalism remain, both within countries and at border crossings.

Definition of responsibility: Confusion prevails as to who is responsible when things go badly. To prevent such disputes, many large intermodal operators are prepared to assume the risk themselves. Freight insurance is available and widely used by large shippers. However, risks are harder to absorb for small operators and have an important psychological effect on the attitude of customers to intermodalism.

Insufficient knowledge of users’ needs: since intermodal services are provided by competing private firms instead of a large government enterprise, the customers’ needs receive relatively little attention and are not widely known. Some links in the chain are controlled by organizations, which, like state-run railways in the past, have paid little attention to customers’ requirements and may not be fully informed of those services for which there is a growing demand from customers.

Strategies for Intermodalism

Technical aspects. There is broad agreement on the technical requirements for intermodal strategies: Focus on the customer’s needs. Intermodal transportation strategies must be customer-driven. Consider all modes. Once the customers’ needs have been defined, the strategies must consider the availability of each of the various modes to meet these needs, identifying the comparative advantages of each mode. Switching between the different modes must be considered - if necessary, include modifications to services now provided - in order to choose the combination that best meets the customers’ needs.

Combination of cargo flows. This strategy seeks to combine cargo flows to achieve the volume or critical mass required for economies of scale, preferring the use of less-polluting modes of transport, and to make the best use of existing transportation capacity.

Removing bottlenecks. Removing bottlenecks often leads to a great expansion in system capacity at relatively low cost, as well as significant improvements in quality of service.

Standardization. Intermodal developments must seek the most efficient ways to achieve standardization, either physical (e.g. equipment or vehicle size) or procedural (e.g. documentation and information technology systems).

Institutional aspects. There was great agreement on this point, but not on the appropriate institutional structure, where opinion divided on how much leadership the private or public sector should take in intermodal strategies.

Latin America: Container Movement through Ports by Subregion (in U.S. tons, 1998)

Latin America: Trade and Transport

© 2000 Executive Committee of the Western Hemisphere Transport Initiative, and, Office of Summit Follow-Up, Organization of American States.
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