Comparing Port of Cristobal and Port of New Orleans Teus

Comparing Port of Cristobal and Port of New Orleans TEUs

Matthew Norton

0 - Abstract

Panama is centrally located between North and South America making it easy for shipments for shipments between both continents. The Panama Canal connects the Pacific and Atlantic Oceans and allows for transoceanic shipments worldwide starting in Panama going east or west. Similarly, the Port of New Orleans has access to the Atlantic Ocean and the Pacific Ocean by way of the Panama Canal. Business overviews of both the Port of Cristobal in Panama and the Port of New Orleans in Louisiana were used to compare the annual throughput of each port. Information about both companies was collected through interviews and online research. Current data provided allowed for comparison of current cargo rates and forecasts. A case study compared Port of Cristobal vs. the Port of New Orleans. The focus was to compare the annual throughput of these two port operators. The results from comparing Port of Cristobal to the New Port of New Orleans as shown in the report describe the effects that environment and business strategy have on throughput.

1 – Introduction

The focus topic in this paper is the comparison of TEU throughput at each port. The better managed the port is generally the more cargo will be processed. Annual throughput is defined as the cargo imported and exported. For comparison between the ports annual throughput of containers will be used.

The geographic location of the Port of Cristobal on the Caribbean Sea and the Panama Canal in the city of Colon allows for accessibility of ships of all sizes and coming from anywhere in the world. This medium sized port is located in a coastal breakwater and provides good shelter for the vessels while at port. The accessibility of the port provides a destination for both cargo ships and cruise ships with destinations in Panama. The Port of New Orleans is located on the Mississippi River in New Orleans, Louisiana where it is a large sheltered port that has a natural river harbor. The accessibility of the port provides a destination for large amounts of cargo ships (Source, 2012).

Modernization is seen constantly at the Port of Cristobal in growth and improvements to the port. Port improvements allow for an increase in the volume of cargo to pass through from year to year (Source, 2012). The Port of New Orleans is growing and modernizing at a record pace by investing millions of dollars into its infrastructure. Technology plays a large part in the modernization as the port must keep up to stay in the ranks of the world’s top ports (Port of New Orleans: World Port Source).

The city of New Orleans has been through a lot in the past decade including hurricanes in 2005 that devastated much of the city and destroyed many of the port buildings. The business environment in New Orleans has since been coming back from the loss in population and business activity(Port of New Orleans: World Port Source). By creating over 160,000 jobs in the state of Louisiana, the Port of New Orleans is a major economic driver for the state and region. The port is in a foreign trade zone allowing products to be brought into the United States without being immediately faced with the usual customs regulations (PNO Master Plan: Portno).

Figure 1. Port of New Orleans

(Cargo Facilities Specs: Portno)

In 2010 the Port of New Orleans processed nearly 275,000 TEUs placing them in the top 20 ports in the US for the number of TEUs imported and exported (Porttons10 :Waterborne Commerce Statistics Center). The port is a busy place accommodating an average of 2000 vessel calls per year. The port has changed significantly since it was founded in 1718 by the French (PNO Master Plan: Portno). Later purchased by the United States in the Louisiana Purchase the Port of New Orleans began to grow rapidly. Now the port is still a major distribution point for goods going into and out of the central United States(Port of New Orleans: World Port Source). The port is a major importer of coffee, steel, and natural rubber that is distributed throughout the United States (PNO Master Plan: Portno).

The economy in Panama has recently been growing at a rapid pace, seeing an average GDP growth of 8.5% from 2006-2010. Even with the economic growth though, Panama is still faced with reducing the poverty level (Panama Country Brief: The World Bank). The Port of Cristobal has a workforce of over 400 people to service the growing market. With hundreds of millions of dollars being invested in the Port of Cristobal it is moving rapidly into the spotlight as the leader of the Latin American ports (Eng Yearbook 2007: PPC).

Figure 2. Port of Cristobal

(Seaports Cristobal: GA Tech)

In 2010 the Port of Cristobal processed over 675,000 TEUs (Seaports Cristobal: GA Tech). The port is a bustling hub for cruise ships bringing in over 1.5 million passengers and crew from 2000 to 2008 (Eng Yearbook 2007: PPC). The port has changed significantly since 1997 when the Panama Ports Company began to manage the port operations. The Panama Ports Company has modernized the port, by making improvements to machinery port operations. The port is a major hub for containerized, bulk, and general cargo for the Atlantic Ocean (Seaports Cristobal: GA Tech).

The focus of this report is “A Case Study Comparing the Port of Cristobal and the Port of New Orleans”. More specifically, this report compares the efficiency of annual container throughput.

2- Information/ Data Collection Approaches

The data collection approach used is divided into two parts, the internet search and the interviews in Panama and New Orleans. These two types of data collection will be used to collect information about the Port of New Orleans and the Port of Cristobal. Additionally the research will be used to identify materials management capacities for each port.

The results from only slight variations in the search criteria using the Google search engine can have different outcomes. That is why it is necessary and important to state the search criteria that are used to find the information. Samples of keywords used to find the information in this project are presented in Table 2. The keywords in Table 2 were used to find the information in the database of Table 1.

To be more thorough interviews were conducted in Panama with the Panama Ports Company, the company that manages the port. Management executives were interviewed about the operations and throughput of the Port of Cristobal. Throughput as defined by the Department of Defense is, “In transportation, the average quantity of cargo and passengers that can pass through a port on a daily basis from arrival at the port to loading onto a ship or plane, or from the discharge from a ship or plane to the exit (clearance) from the port complex. Throughput is usually expressed in measurement tons, short tons, or passengers. Reception and storage limitation may affect final throughput”.(Dictionary of Military Terms, Department of Defense)

A face to face interview was preformed with management of Panama Ports Company to receive the necessary information about the Port of Cristobal. A variety of questions were asked to learn more about the annual throughput of the Port. The following Table 3. displays a list of questions that were asked:

The Port of Cristobal is operated by the Panama Ports Company. The interview consisted of questions being asked of Juan Antonio Sucre a manager at Panama Ports Company. His experience and knowledge about port operations after many years of experience exemplifies his knowledge of port operations(Sucre, 2012).

Figure 1. Juan Antonio Sucre

Manager, PPC

(Sucre, 2012)

3- Case Study

The Port of Cristobal is located in Central America on the Atlantic Ocean side of Panama near at the end of the Panama Canal. It is located in on the Bay of Limon which provides adequate space for anchorage of large vessels and is protected by breakwaters. The location on the Atlantic Ocean side of Panama provides shipping distribution to Europe, Africa, North and South America(Source, 2012).

Figure 1. Port of Cristobal Location

(Maps, 2012)

The purpose of the Port of Cristobal is to facilitate the movement of goods between land and water. The Port of Cristobal is operated by the Panama Ports Company, a subsidiary of Hutchison Port Holdings Group. With over 30,000 employees worldwide Hutchison Port Holdings Group is a successful enterprise in port development and operations. They are a private for profit entity that operates ports throughout the world 24 hours a day 7 days a week(Eng Yearbook 2007: PPC).

Table 1. Port of Cristobal TEU Throughput

(Sucre, 2012)

The Port of Cristobal is unique to Panama due to its abilities as a port and business. With 3,500 meters of docks, 10 gantry cranes, and plans for further expansions, the port sets itself apart from others. Plans for expansions of the port will increase the throughput to over 1.5 million TEU’s per year. The port has piers dedicated for items such as steel and warehousing for goods including paper and wood that must be protected from the environmental elements(Company).

The Port of New Orleans is located between the Mississippi River and Lake Pontchartrain in New Orleans, Louisiana. Located within a large metropolitan area the port is spread out into different terminals located on the Mississippi River and a network of inland waterways(Port of New Orleans: World Port Source).

Figure 2. Port of New Orleans Location

(Maps, 2012)

The Port of New Orleans is governed by a board of commissioners that is made up of 7 unsalaried appointees. The board members serve 5 year terms and are appointed by the governor from a list of nominees created by 19 local businesses. Board members represent 3 different parishes in the state of Louisiana. Policies and regulations are set by the board and to regulate the commerce of the port. The port is publicly run for the purpose of job creation for citizens of Louisiana. The Port of New Orleans has a large economic impact and is responsible for over 160,000 jobs(Port of New Orleans: World Port Source).

Table 1. Port of New Orleans TEU Throughput

(Dolese, 2012)

The Port of New Orleans has great transport capacity. The port connects the heartland of the United States via the Mississippi River allowing a wide range of products to pass through. It is the only deep water port in the United States that is serviced by 6 major rail lines. Large investments in the port have insured state-of-the-art facilities that allow the port to compete and grow. The Port of New Orleans has the world’s longest wharf that can service up to 15 vessels at one time(Port of New Orleans: World Port Source).

4- Results and Results Impact

The comparison of TEU throughput over a 3 year period of time shows the rate of growth for the Port of Cristobal and Port of New Orleans. The rate of growth for the Port of Cristobal was significantly faster over the course of the study. Achieving over 175% growth in the 3 year period of time the port is growing significantly faster than the Port of New Orleans(Sucre, 2012). The rate of growth in TEU throughput for the Port of New Orleans for the same period of time was just under 50%(Dolese, 2012).

The similarities between the Port of Cristobal and the Port of New Orleans are not limited to the use of containers for materials handling. Both ports have seen growth in the annual throughput of TEUs. The positive economic growth over the 3 year period of time indicates increased efficiencies in materials handling. Table 1 illustrates the increase in container throughput for both ports. This growth is important because it demonstrates growth in the port industry as a whole(Sucre, 2012)(Dolese, 2012).

Table 1. Annual TEU Growth

(Sucre, 2012)(Dolese, 2012)

Key differences were evident over the three year comparison between the Port if Cristobal and the Port of New Orleans. Considering that the ports were handling roughly the same number of TEUs in 2009 the increase per year is significantly higher for the Port of Cristobal. The following Table 2 demonstrates the significant difference in increased TEU throughput over the previous year. This difference in the rate of increase is important because it depicts how much faster the Port of Cristobal is growing than the Port of New Orleans(Sucre, 2012)(Dolese, 2012).

Table 2. TEU Increase over Previous Year

(Sucre, 2012)(Dolese, 2012)

5- Summary

The purpose of this report was to compare the annual TEU throughput for the Port of New Orleans and the Port of Cristobal. The business overview of the two ports profiles their geographical locations on the Mississippi River and the Atlantic Ocean side of Panama. Information was collected through interviews and online research about the operations and annual TEU throughput of the ports. Data collected for the years 2009, 2010, and 2011 were used to compare the ports utilizing identical comparative information. The Port of Cristobal is a privately run port located on the Bay of Limon has a protected harbor that facilitates the movement of goods from land and water 24 hours a day 7 days a week. Current expansion plans for the port would allow it to move over 1.5 million TEUs per year. On inland waterways just in from the Gulf of Mexico the Port of New Orleans is a port run by a board of commissioners appointed by the governor. The port operates with the intent of job creation for the residents of Louisiana. Large investments have allowed the port to compete and grow with the use of state-of-the-art facilities.

The comparison of the annual TEU throughputs for the Port of New Orleans and the Port of Cristobal showed similarities in growth among the ports. Though the growth of the ports was at different rates the ports were both growing. A significant difference between the ports was in the yearly increase in TEUs handled by each port. The Port of Cristobal was increasing its annual TEU throughput by a larger number of TEUs from year to year. The economic impact of this on the industry is continued growth at the ports. By utilizing state-of-the-art facilities or expanding port operations growth was sustained in the industry. The growth allows the publicly operated Port of New Orleans to facilitate the job creation for the state that is its objective. Some additional work that could be done include: a look at the overall value of the goods transported through each port, a comparison of regional economic impact, and a comparison of port operations strategies with regard to TEUs.

6- References

Cargo Facilities Specs: Portno. (n.d.). Retrieved April 25, 2012, from Portno:

Company, P. P. (n.d.). PPC. Retrieved June 8, 2012, from Cristobal, PPC:

Dictionary of Military Terms, Department of Defense. (n.d.). Retrieved May 10, 2012, from Department of Defence:

Dolese, R. A. (2012, May 25). Public Information Officer . (M. Norton, Interviewer)

Eng Yearbook 2007: PPC. (n.d.). Retrieved April 15, 2012, from PPC:

Maps, G. (2012, June 14).

Panama Country Brief: The World Bank. (n.d.). Retrieved April 20, 2012, from The World Bank :

PNO Master Plan: Portno. (n.d.). Retrieved April 15, 2012, from Portno:

Port of New Orleans: World Port Source. (n.d.). Retrieved April 15, 2012, from World Port Source:

Porttons10 :Waterborne Commerce Statistics Center. (n.d.). Retrieved April 15, 2012, from Waterborne Commerce Statistics Center:

Seaports Cristobal: GA Tech. (n.d.). Retrieved April 15, 2012, from GA Tech:

Source, W. P. (2012). Port of Cristobal: World Port Source. Retrieved April 15, 2012, from World Port Source:

Sucre, J. A. (2012, May 30). Operations Manager. (M. Norton, Interviewer)