The Big Leap 2014: Challenges and Opportunities for Infrastructure in
Colombia Upon New flows of International Trade.
Cartagena, 16 February 2012
A Big Step or a Small Leap?
The Panama Canal Expansion
and Global Supply Chains
Jean-Paul Rodrigue
Professor, Dept. of Global Studies & Geography,
Hofstra University, New York, USA
Ship Happens…
Factors Guiding our Steps
Elephants
Paradigms
Funnels
Global Trends: The
Proverbial Elephant in the
Living (Board) Room
Multiplying Effects of Derived Demand on
Container Transport Peaking?
Global Trade and Container Throughput (1970=100)
10,000
Container Throughput
(520.4 Millions TEU)
Exports in current USD
($15.2 Trillion)
GDP in current USD
($63.4 Trillion)
1,000
World Population
(6.84 Billions)
100
1970 1975 1980 1985 1990 1995 2000 2005 2010
China: The Largest Bubble in History?
Share of the World Commodity Consumption, China and United States, c2009/10
Cattle
Oil
GDP (PPP)
Wheat
Population
Soybeans
Chickens
Rice
Nickel
Aluminum
Zinc
Copper
Lead
Steel
Coal
Pork
Eggs
Cement
Iron Ore
6.1%
6.8%
10.4%
21.7%
13.6%
19.7%
16.6%
4.9%
19.7%
Rebalancing in demand
4.5%
24.9%
19.9%
25.2%
11.3%
30.2%
China
United States
0.9%
31.9%
10.1%
34.6%
8.7%
38.2%
1.8%
39.5%
9.1%
42.1%
13.7%
45.8%
4.8%
46.9%
15.2%
49.6%
8.4%
53.6%
7.8%
53.6%
2.1%
54.4%
0%
10%
20%
30%
1.9%
40%
50%
60%
70%
140
120
20
0
Jan-70
Jan-71
Jan-72
Jan-73
Jan-74
Jan-75
Jan-76
Jan-77
Jan-78
Jan-79
Jan-80
Jan-81
Jan-82
Jan-83
Jan-84
Jan-85
Jan-86
Jan-87
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
The Third Oil Shock Unfolding
West Texas Intermediate, Monthly Nominal Spot Oil Price (19702011)
100
Rebalancing in input costs
80
60
Second Oil Shock
40
Third Oil Shock
First Oil Shock
Global Trade Stalling? (and diverging)
250.0
CPB World Trade Index, 1991-2011 (volume)
200.0
150.0
100.0
50.0
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
0.0
Jan-02
World Trade
Imports (Advanced Economies)
Exports (Emerging Economies)
The Usual Suspects Shifting to Lower Gears
Monthly Value of Exports or Imports, Selected Traders, 20062011 (Jan 2006=100)
350
325
Japan (Exports)
300
Korea (Exports)
275
Germany (Exports)
250
Canada (Exports)
225
USA (Imports)
200
175
150
125
100
75
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
Oct-06
Jul-06
Apr-06
Jan-06
50
Latin American Traders Shifting to Higher Gear
Monthly Value of Exports, Selected Latin American Traders,
2006-2011 (Jan 2006=100)
350
325
Chile (Exports)
300
Peru (Exports)
275
Brazil (Exports)
250
Argentina (Exports)
225
Colombia (Exports)
200
175
150
125
100
75
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
Oct-06
Jul-06
Apr-06
Jan-06
50
The Elephants…
Energy and
Resources
Debt and
sovereign
defaults
Aging &
HealthCare
Ports and Maritime
Shipping in a Paradigm
An Expected Shift in Containerization Growth
Factors
Derived
Substitution
Incidental
Induced
Economic and
income growth
Globalization
(outsourcing)
Fragmentation of
production and
consumption
Functional and
geographical
diffusion
New niches
(commodities
and cold chain)
Capture of bulk
and break-bulk
markets
Trade
imbalances
Repositioning of
empty containers
Transshipment
(hub, relay and
interlining)
World’s Major Container Ports, 2010
Geography of production and consumption
Gateways and intermediary hubs dynamics
Gateways and Transshipment Hubs: Different
Dynamics
Monthly Container Traffic (Jan 2005 =100)
Ports and Maritime Shipping in the “Post-Bubble”
Period: An Enduring Cognitive Dissonance?
Shift in economic
geography
Financialisation (dumb
money)
Macroeconomic shifts
Changes in shipping
network configuration
(gateways vs
transshipment)
Linear inference
Paradigm
Supply Chain Differentiation: Selective
Performance Preferences
Costs (38%)
Stability of the cost structure.
Relation with the cargo being carried.
Time (12%)
Influence inventory carrying costs and inventory
cycle time.
Routing options in relation to value / perishability.
Reliability (43%)
Stability of the distribution schedule.
Reliability can mitigate time.
Reliability Remains Somewhat Elusive…
Schedule Reliability in Container Shipping, 2010
80%
70%
Share of Port Calls
60%
50%
Total
Asia/Europe
Transatlantic
Transpacific
45.3%
40%
30%
19.3%
20%
0%
9.1%
7.0%
10%
0.4% 1.1% 1.7%
-4
-3
-2
-1
0
1
2
5.3% 4.0%
3
4
1.6% 1.5% 1.7% 1.3% 0.5% 0.2%
5
6
Difference from ETA in days (ETA=0)
7
8
9
10
Some Key Issues in Liner Shipping
Renewed risk for
overcapacity.
18,000 TEU vessels
and their
ramifications on
ports.
Slow steaming:
using a green
argument to hide a
green ($) bottom
line?
Overcapacity
absorbing potential
is weakening
Impact of bunker
price evolution and
low-sulphur fuel
12,000
6,000
0
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
The Six Flags Index…
Baltic Dry Index, Monthly Value, 2000-2012
Enjoy the ride
10,000
8,000
New supply above
demand growth
4,000
2,000
The North American East and West Coasts
Dominate…
Millions
… but Growth has Shifted to South America / The
Caribbean
Million TEUs
Panama Canal
Expansion: Triangles and
Funnels
Transshipment Volume and Incidence by Major
Ports, 2007-09
Asia – Mediterranean Corridor
Caribbean
Transshipment
Triangle
Northern Range
East Asia Cluster
Transshipment in the Caribbean: From A Triangle
to a Funnel
15.6%
16.4%
63.1%
Economies of scale involve less
tolerance for deviation
4.9%
Components of the Logistics Performance Index, Selected
Latin American Countries, 2010
The Inland Logistics Funnel: The “Last Mile” in
Freight Distribution
Capacity
Funnel
Frequency
Funnel
Inland Terminal
HINTERLAND
Capacity
Gap
Frequency
Gap
GATEWAY
FORELAND
Economies of scale
Main Shipping Lane
INTERMEDIATE HUB
Emerging Global Maritime Freight Transport
System: Changes in Routing and Density?