Complexity behind the success

“We expected to start Phase 2 in 2016, but the market demanded we start in 2012 – after just two years of operation.”

This is rapid growth in a new venture might sound like luck to some, but it is the result of four years of planning, study, negotiations and world travel.

Victor Muñoz, project director at TC Buen in Colombia, knows all about that. He came onto Phase 1 of the project for a new container terminal at the port of Buenaventura in 2010. That was three years after the idea was first conceived and a year before it started operations. Now he is overseeing Phase 2.

"When we started, there was nothing here. It was a green field. Buenaventura was moving around 600,000 TEUs per year. Now we are moving 1 million TEUs," he says.

"It’s a very complicated project. At each phase you need civil works, equipment and dredging. You need to deal with the Colombian authorities and your providers."

But the complexity starts way before phase implementation. Obtaining finance, studying the Colombian and the region’s economy, considering the competition and visiting other ports are just some of the aspects Muñoz has been involved with.

The concept of a new terminal at Buenaventura was first mooted in 2007, when Colombian developers GEPSA had a meeting with TC Buen’s parent company, Barcelona-based GRUP TCB. The developers were looking for a global player to help them realize their ambition of a new terminal on Colombia’s Pacific coast.

"Usually you compete for a project like this. But the developers contacted us, so we came here to talk to them. Together we approached the local government and have been working closely with them ever since."

Civil work started in August 2009 and was completed 18 months later. Operations started in Jan 2011. For the first three months, TC Buen worked together with the existing port, Sociedad Portuaria de Buenaventura.

"At the same time, the construction company was working with the civil works, so we split the terminal into two: one part for operations and other for civil works."

Sociedad Portuaria de Buenaventura is still TC Buen’s main competitor, yet "we share customers because we each don’t have enough capacity on our own," explains Muñoz.

"But a third competitor would be too much," he adds. "There isn’t room for three. The quicker we develop our project, the better. Once we finish the third phase, I don’t think it will be easy for a third player because we will have the customers. But we build phase by phase to prevent overcapacity."

Gateway to the Far East

In preparation for Phase 2, Muñoz and his colleagues undertook a number of studies. "We created simulations, models, scenarios, looked at the economy, trade, the container industry. We realized this port had interesting development potential.

"Colombia is the gateway to the Far East because most vessels need to pass through the Panama Canal, so the natural way for cargo is from the Far East to Buenaventura."

At the end of 2012, the priority was financing and engineering. Financing agreements with local and government agencies, as well as a pool of mainly American and German banks were completed the following year. Equipment suppliers in China, the USA and Finland were also contracted.

Dredging, due to start this year, will be done in two phases. Negotiations with Colombian authorities will be complete at the end of September to enlarge the turning basin and the width of the canal.

TC Buen decided to implement OCR to Phase 1 to reduce the risk of smuggling, piracy and narcotics trafficking, as well as to improve performance. "We started operations without OCR but after using it for 10 months, we could already see an improvement in performance," says Muñoz.

While considering OCR, he visited terminals all over the world and says, "It wasn’t easy to find a terminal with OCR integrated into an existing terminal operating system (TOS) as we have it."

TC Buen has its own in-house TOS that has been developed between all the GRUP TCB terminals. "At the time we asked ourselves whether we should develop our own OCR, or look for an existing OCR system that could integrate well with our core system.

"When I was investigating this in 2009–2010, there were three main suppliers of this new technology, all very similar in terms of price and quality. We went with APS mainly because it had the most integrated solution. We could automate at the shore, in the yard, at the gate, all with GPS."

APS Technology Group, a member of the ABB group, provided optical character recognition (OCR) and related automation solutions. The company has installed, and will maintain over five years, the following:

Automated gate systems
Ship-to-Shore (STS) crane OCR
Tractor identification for STS and rubber tyre gantry (RTG) cranes
Software to enable real-time notification of system exceptions via local and remote clerks
Container inventory and position determination system (PDS)

"If we have a problem with the OCR server, we call on San Diego, but if there’s a problem in our core system, we talk to Barcelona," says Muñoz. He adds that the ideal situation would be for all GRUP TCB terminals with OCR to be managed by one provider.

Different from other countries

Automation is being implemented in stages at TC Buen and Muñoz says the aim is to have a fully automated terminal in five years. The next step is GPS for all the equipment. At present, this is only used on the RTG cranes.

Muñoz believes automation is not just for "megaports" but that small terminals in developing countries are good candidates for this technology. "We may be a small port, but we have important technology. We are a reference for Colombia and South America," he says.

Two factors made automation an easy choice at TC Buen: the fact that it was started from scratch and weak union interference in Colombia.

"A container terminal operator always wants automation because you decrease your costs and increase your margins. But you still need to operate. If you change to automated systems, you need to have the same, or higher, level of productivity. I saw that I had the opportunity to start with new technology here that would achieve just that."

"Also, in Colombia, we don’t have the same problems that the United States or Spain have with the unions. Here, the dockworkers are employed by our company. Of course, they can have some kind of union, but it’s not the same as in other countries.

"This sort of thing is decreasing in Europe, but still in Spain if we say we want to start with automated stacking cranes, we hear that we will have a problem with the union."

Besides the unions, there are other factors to consider for implementing new world technologies in developing countries. He points to the lack of a stable electricity supply in Colombia as a case in point.

While GRUP TCB is a small operator, when seen in the global context, Muñoz says it has a lot of potential. "We have a department dedicated to looking for new opportunities and places to build new ports. The latest one we’re working on is on the Pacific coast of Guatemala."

What about the future of TC Buen and its subsequent phases? Muñoz says, "We have a 30-year concession up to 2037. Initially, we thought the fourth phase would be complete by 2021." Clearly, this will happen a lot sooner than planned.