Latin America’s new trade hub

APM Terminals is investing USD 750 million to turn Callao, Peru into a world-class port. Together with its favourable geographic location, APM Terminals expects that the port will one day become a hub of trade for the west coast of Latin America.

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APM Terminals Callao has reduced the average amount of time each vessel spent in the port by 39% compared to the 2009–2010 period when the port was state controlled.

Significant progress
In its first two full years of operations between 2012 and 2013, and despite the ongoing expansion, APM Terminals Callao has seen a

  • 59% increase in the number of vessels and
  • 21% increase in container and general cargo volume

“Callao handles the entire scope of cargo that comes in and out of Peru. You can see the economy moving through this port every day,” says Dallas Hampton, who became Managing Director of APM Terminals Callao, Peru in September 2014.

“With the deeper draught and cranes to accommodate the largest ships and all the investments coming in the general cargo side, we’re building a port that will effectively support Peru’s future growth. As it nears completion, it will no doubt have the potential to make Callao a trade hub for the west coast of Latin America.”

APM Terminals is investing USD 750 million over its 30-year concession to expand and modernise both the container and general cargo sides of the Callao terminal. Because of the port’s importance to Peruvian trade, it is one of Peru’s key transportation infrastructure projects.

Callao, located 20 km from the capital city of Lima, is Peru’s most important port, handling more than 80% of the trade for a nation of 30 million, which has seen its GDP grow an average of 6.5% over the last five years.

Callao port
Stevedores in Port of Callao moving frozen fish from ships to a reefer container.

Callao is …

  • Peru’s most important port
  • handling more than 80% of Peru’s trade
  • located 20 km from the capital city of Lima

“The port is functioning very well now, but it is not yet world class,” says Kor Goedendorp, head of the expansion project at APM Terminals Callao.

“That’s what APM Terminals is here to do. With all the improvements we are making to this terminal, in both the container and general cargo sides, it will be a world-class port by 2020.”

Different outlook
The outlook for Callao was different years ago. Before APM Terminals took over the state-controlled port in July 2011, there was a lot of tension around it and the cost to get one container off a ship and out of the terminal was USD 435. At the end of 2014, it was USD 238, the result of more efficient operation and administration. When spread across the 320,000 containers moved in 2013, this amounted to USD 63 million in savings for customers.

In addition, ships are spending much less time in the port, allowing more vessels and cargo to come into Callao. In its first two full years of operations between 2012 and 2013, and despite the ongoing expansion, APM Terminals Callao reduced the average amount of time each vessel spent in the port by 39% compared to the 2009-2010 period when the port was state controlled.

The result? A 59% increase in the number of vessels and a 21% increase in container and general cargo volume.

Huge infrastructure gap

The port is capable of handling cargo of all types, including containers and general cargo such as metals, grains, vegetables, mining machines, coal, chemicals, cruise vessels and more. APM Terminals operates eight other terminals that serve a similar range of cargo.

Like Peru’s other ports as well as its roads, railways and other infrastructure components, the Callao port needs repair and renovation to support the country’s continued growth. The Ministry of Transportation and Communication estimates that Peru’s infrastructure gap stands at USD 38 billion, or 30% of the country’s GDP. Approximately USD 14 billion of this relates to transport, primarily roads and ports.

APM Terminals has surprised this community with their openness and willingness to listen, and they have won over many people by following up on their nice words with actions.

Callao quote

EUGENIO CORDOBA, A PUBLIC WORKER AND POLITICIAN FROM THE BELLAVISTA DISTRICT

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The port is capable of handling cargo of all types, including containers and general cargo such as metals, grains, vegetables, mining machines, coal, chemicals, cruise vessels and more.

Four new ship-to-shore cranes capable of handling 18,000 TEU vessels arrived this year at the new container berth; nine more will arrive over the next seven years. A total of 12 new electric rubber-tyred gantry cranes are now in the yard and this figure will expand to 36 in the years to come.

On the general cargo side, a new grain berth with double the current storage capacity, four mobile harbour cranes, bigger grain scoops and a conveyor belt for unloading grain vessels directly into storage are all in the works for the next couple of years.

Community relations
An open-door policy and ongoing dialogue with various stakeholders has allowed APM Terminals to get the project up and running on schedule, build a network and find a place in the Callao community as a trusted partner.

For the hundreds of stevedores that were accustomed to working in the public terminal, the changes brought by APM Terminals came quickly. A collective bargaining agreement was established within weeks – the first in 20 years for the stevedores – that created security for both sides and helped to build a relationship of respect between stevedores and employees in the yard.

“APM Terminals has surprised this community with their openness and willingness to listen, and they have won over many people by following up on their nice words with actions,” says Eugenio Cordoba, a public worker and politician from the nearby Bellavista district.

In Puerto Nuevo, one of Peru’s poorest neighbourhoods located just outside the terminal, specific long-term initiatives are ongoing. The company sponsors several police outposts to improve the community’s security as well as its relationship with the police; monitors a nutrition and education programme for 250 children and their families and has helped launch the neighbourhood’s only bakery by donating the oven.