The Port of Americas remains virtually empty despite Puerto Rican investments.
Puerto Rican officials are moving ahead with their search for an interested private company to operate the under-utilized Port of the Americas in Ponce and turn it into a bustling transshipment hub.
As reported six weeks ago, the Ponce Port Authority made available to American Shipper a preliminary request for information to gauge potential interest from marine terminal operators and investors in expanding and marketing the port, as well as developing a logistics park. On Monday, it took the next step and issued a request for proposals for a concessionaire to run the Port of the Americas.
Ponce, located on the southern coast, is the second largest city in the U.S. territory. San Juan, on the north side, is the primary port.
The government of Puerto Rico last decade poured $285 million to turn the old port of Ponce into a major transshipment hub for the container trade, but the expectation that ocean carriers would take advantage of a new, centrally located Caribbean facility has not panned out.
The gleaming container terminal has a long berth with a depth of 50 feet, two super post-Panamax ship-to-shore cranes, and a container yard with an annual capacity of 500,000 TEUs per year. But so far the port is mostly empty, unable to attract much business from ocean carriers.
Analysts say the primary reasons undermining Ponce’s appeal are the Jones Act and high labor costs for stevedoring, which make the site uncompetitive with ports in Jamaica, the Dominican Republic, Bahamas and Panama, among others.
The Jones Act is a 1920s-era law designed to protect the U.S. maritime industry. Under the law, vessels moving cargo between two U.S. points must be built in U.S. shipyards, registered in the United States and crewed by American citizens. U.S. shipyards are about four times as expensive as some of their foreign counterparts. The United States has stricter regulations for security, safety and the environment than many other flag registries, which raises compliance costs for vessel operators. And American seafarers command much higher pay rates than most international sailors.
The RFP now suggests that Ponce may best function as a transshipment point serving the Caribbean, Central America and South America, especially for European trade.
Trade between the United States and Puerto Rico goes through the Port of San Juan on the northern side of the island, and the cargo is carried by dedicated domestic carriers. International ocean carriers do not use San Juan to offload cargo to smaller feeder ships to serve the U.S. market.
In 2013, a total of 748,000 loaded TEUs were handled in Puerto Rico, of which about 75 percent moved on the domestic trade with the U.S., and the balance moved to and from international destinations and Puerto Rico.
The Ponce Port Authority says it wants to partially privatize the port through an agreement to give exclusive management control to a private-sector terminal operator.
The RFP identified retail logistics as a potential opportunity for a concessionaire. Many 53-foot containers contain pre-sorted orders for direct store delivery in Puerto Rico, but cargo that is not consolidated on the mainland could be sorted and packed for just-in-time delivery to retail stores from a logistics center in Ponce. Such a distribution center would offer less congestion than in San Juan, as well as lower lease and operating costs, it said.
Another growing trend that could be attractive to a port operator, the RFP said, is direct sourcing of consumer products in places like Asia rather than consolidating them in the United States for re-export to Puerto Rico. That has increased the number of international ocean carriers calling the Port of San Juan from transshipment ports in Panama and elsewhere in the Caribbean. International volume has increased at a compound annual rate of 2.6 percent since 2009.
The RFP also said the Port of the Americas is a good candidate for automobile logistics. Currently, automobiles are delivered by vessel to San Juan and are trucked to Ponce, stored and redelivered throughout the island. The port could process and distribute the cars to local dealers and to rental car companies, it said.
The port authority is a new entity created in 2011 under a transfer of power to the municipality of Ponce that relieved the port of debt and other legal obligations, which remain with the original Port of Americas Authority.
Future construction plans, which a private investor would presumably help finance, include adding 3,000 feet of additional berthing area and new container yards to bring the port’s capacity up to 2.2 million TEUs.
More immediate plans call for realigning several berths to accommodate deeper draft vessels and further deepen the current deep-draft berth that progressively shallows on one end.
The port authority has set a Dec. 19 deadline for submission of bids.
Puerto Rico port tries to lure private operator
![](https://www.freightwaves.com/uploads/2019/08/AS-Missing-Image-v2-1.jpg)