DOWN BUT NOT OUT?

The APMT Itajai terminal lives on but the clock is ticking. Is revival a realistic prospect in the face of tough competition? Rob Ward investigates

APM Terminals Itajai has come back from the dead since December and January and is now adding more container capacity back into the fierce competition for liner calls that exists in the southern states of Brazil: a market that was worth 4.18m TEU last year.

Along with Portonave, APMT’s MSC-backed terminal rival across the River Itajai Acu, the duo comprise the Itajai Port Complex (IPC) and used to share around a million TEU annually. Nowadays, however, Portonave handles more than one million TEU alone with APMT landing zero containers in January of this year. The IPC has for many years been dubbed the Chicken Export capital of the world, because of its strong presence in the export of the white meat, and its status as the No 2 Brazilian port for boxes overall; after Santos.

The duo face competition for container traffic from three other sources, Porto Itapoa (in which Maersk group has a 30 per cent share), Rio Grande, in the far south of the state of the same name, and also Paranagua to the north.

With the little-known Rio Grande company CTIL last year winning a concession to run boxes out of Itajai after a lacklustre concession process, ANTAQ (the authority for Brazilian waterways) stepped in to cancel the concession, leaving the Itajai Port Authority (IPA) and APMT Itajai to thrash out some kind of deal and keep boxes in the game in the port of Itajai.

“CTIL had no experience of running a container terminal and were not suitable for Itajai and afterwards the IPA had to virtually beg APMT to stay and gave them very good terms,” said one reliable source.

APMT Itajai has agreed to stay on until the end of the year and announced in February a brand-new service – from CTM, a Panamanian shipowner – linking the port of Montevideo, Uruguay, with Cartagena (Colombia) and Santiago de Cuba and Mariel, via Itajai and Paranagua.

“The arrival of this service marks the resumption of container handling at the Port of Itajai,” asserted Volnei Morastoni, the Mayor of the City of Itajai, which still controls port management until a new bid can be organised. The port also had two breakbulk vessels and one ro-ro vessel calling in January but the CTM vessel was the first one this year with containers.

A PROCESS OF EROSION

APMT Itajai’s woes began a few years ago when its 21-year concession contract was coming up for renewal. The Danish company had been a major player in the Brazilian south container market – especially under the guidance of longtime CEO Walter Joos and Ricardo Arten – and had built up a strong operation, especially for chicken and pork shippers, who enjoyed the use of more than 11,000 reefer plugs in the IPC environs and hinterland.

Owing, however, to the uncertainty over two concession renewals that expired last year – both for APMT Itajai and the port authority itself which remains under auspices of Itajai

City council - several services gravitated from the Danishowned outfit to local rival Portonave. This latter terminal handled 1.15mTEU in 2022, up 4.8 per cent, according to Brazilian national waterborne traffic agency, ANTAQ. Porto Itapoa, which opened in 2011 saw a throughput of 885,822TEU last year, a 14.3 per cent increase over the previous year) and Terminal de Conteineres de Paranagua - TCP (owned by China Merchants Port Holdings, or CMPort) handled 1.16m TEU in 2022, up from 1.1mTEU in 2021

Robert Grantham, is a Director with the rapidly expanding Solve Shipping consultancy, and was once the Commercial Director at the Itajai Port Authority (IPA, from January 2009 to December 2012) and also used to be Brazil Country Manager for China Shipping. He lives in Navegantes and has the port of Itajai and its interests close to his heart and is deeply saddened by its demise.

“By January of this year all the regular liner services had fled Itajai because of the uncertainty,” laments Grantham. “Productivity is also low because the equipment is now old and almost obsolete. Because of these inefficiencies many carriers are now choosing Portonave across the River, or Porto Itapoa to the north.

“It’s a very sad sight to see when you drive past the port, there are just a handful of containers to be seen. In January I believe the number of boxes moved at the APMT Itajai terminal was absolutely Zero.”

Another port consultant who keeps a close eye on southern Brazil additionally notes: “Although Itajai is open for business again I am not sure it will be possible to regain their lost services as, by now, those carriers and their shipper clients will have signed new contracts, probably for a minimum of one year. The only chance Itajai has is if Maersk, for political and/or diplomatic reasons, decides to switch one or two services back from Itapoa. It only has a 30 per cent equity stake in Itapoa and it would increase its standing in Santa Catarina and Brasilia but from an economic and logistics point of view such a switch would not make sense.”

Many 1000s of boxes from Itajai have found their way to TCP, located in the state of Parana (home of the famous Foz do Iguacu waterfalls), which has targeted cargoes from the interior of the state of Santa Catarina, that traditionally have only ever used Itajai. Indeed, a few years ago, TCP, located just 100 nautical miles from Itajai, took over the “chicken” mantle for a time. Theoretically, however, the near term could see the IPC steam into pole position again if APMT Itajai can entice back some more regular liner calls. But clearly there is a lot to be done before this can happen.

TCP has also gained from a new MSC service to the USEC, to ship forest products, which started in 2020.

Just as Itajai saw its throughput fall a massive 32 per cent from 517,541TEU down to just 350,083TEU in 2022, the market share of South Brazilian containers at APMT fell from 12 per cent to 8 per cent.

APMT Itajai management told Port Strategy that the new CTM service will call at least once a month and it hoped to win back some of its lost services.

TCP, utilising its logistics arm, TCP Log, has also been a major beneficiary of Itajai’s decline and saw its market share increase from 26 per cent to 28 per cent between 2021 and 2022 (up 6.7 per cent from 1.1m TEU to 1.162m TEU) but these are boxes mostly transferred via truck rather than new services transferred over from Itajai. The big winners in that regard are Itapoa and Portonave (Navegantes).

The Departed

According to Solve Shipping a total of nine service calls have departed Itajai since the start of last year including Maersk’s