A Case Study Comparing the Infrastructure of the Port in Panama Vs. Gulfport, MS

A Case Study Comparing the Infrastructure of the Port in Panama vs. Gulfport, MS.

Ja’don Y. Johnson

0 - ABSTRACT

Panama has the third largest economy in Central America and it is also the fastest growing economy and the largest per capita consumer in Central America. Revenues from the Panama Canal represent a large amount of Panama’s GDP.

Comparing the Infrastructure of the Port in Panamavs.Gulfport, MSwas a bit alarming. The Port of Gulfport has gained a solid reputation as the second largest importer of green fruit in the United States and the 3rd busiest container port on the U.S. Gulf of Mexico. The Port of Balboa, on the other hand, is the largest cargo port in Latin America and serves as a hub for South America and the Caribbean.

Preliminary research was collected in reference to the infrastructure of the Balboa Port in Panama and the Port of Gulfport.An interview was conducted with Matthew Wypyski, Chief Operating Officer of the Mississippi State Port Authority-Gulfport, and with Juan Antonio Sucre, Corporate Affairs and Public Relations Chief of the Panama Ports Company.

This case study will discuss the similarities, differences, and the uniqueness of each port to its respective country/city. Information was gathered in two different ways: internet searches and interviews at each company.

The focus of this report is A Case Study Comparing the Infrastructure of the Port in Panama vs.Gulfport, MS. More specifically, this report compares the Port of Balboa to the Port of Gulfport.

In summary, the Port of Balboa and Port of Gulfport are very different. They serve different purposes in their respective country and the infrastructure of each one is tailored to meet the demand for imports and exports.For the construction industry, The Port of Balboa will allow entry for more Panamax ships to keep up with the expansion of the Panama Canal. The Port of Gulfport will have more modern terminals and mitigate risks against future storms.

1 –INTRODUCTION

1.1.Definitions

Because of the focus of this report on the infrastructure of the Port in Panama and the Port in Gulfport is important to understand the definition of port operations. Port operations are simply defined as traffic control. It controls the hiring, managing, exports, imports, etc. of the different ports.Port operations are a necessary tool to enable maritime trade between trading partners (“Maritime Transport,” ). The focus of this of this report is to compare the Infrastructure of the Port in Panama vs. Gulfport, MS.

1.2. Business Environment in the United States

The United States of America is considered a place filled with opportunities for businesses to thrive. However, the slowdown in the global economy in the previous two years has had a tremendous negative impact on the maritime industry around the world. Budget cuts have been made and jobs are becoming scarcer. With increases in population, increases in the demand for goods, and increases in capital, the stock market has plummeted. Because of the disparity, the United States Business Economy has aided in building the economy back and stabilizing the government.According to the Census of 2010, there were 67,793 people residing in the city of Gulfport. The population density was 1,191.4 people per square mile (459.9/km²). The city had 74.97% of its population at the age of 18 and above. The racial makeup of the city was 56.86% White, 36.07% African American, 0.39% Native American, 1.69% Asian, 0.14% Pacific Islander, 2.13% from other races, and 2.73% from two or more races. Results show that 5.19% of the population was Hispanic/Latino of any race. ("Government," )Despite the challenges in the United States, the Mississippi State Port Authority at Gulfport handled over 2.15 million tons of cargo in 2010. Throughput at the Port of Gulfport in 2011 will depend greatly on the recovery of the global economy, the continued development of port infrastructure and the marketing of restored port facilities and enhanced services. The State Port’s Revitalization Program continues to advance rapidly and its progress is already capturing the attention of carriers and cargo owners throughout the world.(Hurtado, E.)

1.3. Focus Topic in the United States

The Mississippi State Port Authority is an Enterprise Agency of the State of Mississippi and is responsible for the daily operations of the Port of Gulfport. The Port of Gulfport is a bulk, break-bulk and container seaport which encompasses 204 acres, has nearly 6,000 feet of berthing space and averages over 2 million tons of cargo a year shipping over 200,000 TEU'S. The Port of Gulfport has gained a solid reputation as the second largest importer of green fruit in the United States and the third busiest container port on the US Gulf of Mexico. The port has a competitive advantage in that it has Reduced Transit Times, Tax Incentives, Foreign Trade Zone #92, Competitive Rates, Efficiency, Experienced and Flexible Workforce, Superb Cargo Handling Capabilities, and a close Proximity to Major Markets. Figure A: Port of Gulfport shows the design of the Port.(Mississippi State,”)

1.4. Business Environment in Panama

Panama is ranked 72nd out of 183 economies in Doing Business 2011. The most drastic drop occurred for the Registering Property Indicator, where the country decreased by 31 spots. However, Panama eased business start-up by increasing efficiency at the registrar in 2011. It also reduced the corporate income tax rate, modified various taxes and created a new tax court of appeals. Panama’s economic freedom score is 64.9, making its economy the 59th freest in the 2011 Index. Its score remains essentially unchanged from last year, with gains in monetary freedom largely offset by a reduced score for government spending. Panama is ranked 13th out of 29 countries in the South and Central America/Caribbean region, and its overall score is above the world and regional averages. The Panamanian economy has enjoyed robust economic growth in recent years, with GDP expanding at an average rate of around 8 percent over the past five years. Benefitting from its liberal trade and investment regime, Panama’s service-oriented economy is a dynamic international business hub for such activities as maritime transport, distribution services, and banking. Despite progress, Panama’s overall economic freedom continues to be restrained by lingering institutional weaknesses. (Business Environment,”)

1.5. Focus Topic in Panama

The Panama Ports Company (PPC) has been the responsible for managing the ports of the Panama Canal, more specifically the Port of Balboa. The company operates by concession granted by the government of Panama in 1997. A subsidiary of the HPH Group, the PPC is transforming the port into a “mega-port” to increase capacity to 6.5 million TEUs per year. The PPC’s objective is to facilitate global commerce and economy growth by developing and modernizing the ports’ infrastructures and services. Figure B: Port of Balboa shows the design of the port.("Port of balboa," )

1.6. Focus of this Report

The focus of this report is to compare the Infrastructure of the Port in Panama vs. The Port of Gulfport, Ms. More specifically; this report compares the Port of Balboa and the Port of Gulfport.

REMARKS:

Figure A: Port of Gulfport

Figure B:Port of Balboa

2- INFORMATION/DATA COLLECTION APPROACH

2.1. Data Collection Approach

The data collection approach will be divided into two parts: Internet Search and interviews. In Gulfport, an interview was conducted with Matthew Wypyski, Chief Operating Officer of the Mississippi State Port Authority-Gulfport. In Panama an interview was conducted with Juan Antonio Sucre, Corporate Affairs and Public Relations Chief of the Panama Ports Company.

2.2. Internet Searches

Variations in the search criteria (keyword and database) results in differences in the outcome. Therefore, it is important to explicitly state the search criteria used. The keywords used in this project are presented in Table 1: Keywords/Phrases in Search Criteria. The internet search began by searching on keywords such as: Panama Canal, GDP in Panama, Population in Panama, Port Business in Gulfport, MS., Port Business in Panama, Mississippi Port Authority, etc. Google search engine was used for the most part because it seems to be the most efficient. Information was also obtained from the Mississippi Port Authority, Panama Canal Authority, Gulfport Mississippi guide specifically to the government, and articles on the business environments in Panama and the U.S. presented in Table 2:Databases, Name, URL Location and Information used to Search. The sources of the information were from articles written by peer reviews and the state publications.

Table 1: Keywords/Phrases in Search Criteria

Table 2: Databases, Name, URL Location and Information used to Search

2.3. Goal of Interviews

The second part of the data collection approach was the interviews. The main goal of the interview in Panama with Juan Antonio Sucre was to gain an understanding of how the Balboa Port is designed and how it operates on a daily basis in comparison to the Port of Gulfport.An interview was conducted in Gulfport with Matthew Wypyski before leaving for Panama to understand how the port business operated. Another goal was to tour the two facilities to compare and contrast them and experience the Panamax ships unloading process in Panama.

2.4. Interview Instruments

The interview instrument used in Panama was a very informal interview. Due to the time constraints and the large amount of students, questions were asked following the PowerPoint presentation as well as during the bus tour.

In Gulfport, a presentation was given and a one-on-one interview was conducted following the presentation. See Table 3: Interview Questions showing the questions asked in the U.S. and in Panama.

Table 3: Interview Questions

1 / What type of cargo do you import/export?
2 / How is the port designed?
3 / Who are your biggest customers?
4 / On average, how many ships come in and are loaded/unloaded?
5 / How many employees do you have?
6 / Do you work closely with the Panama Ports/Gulfport Port?
7 / What type of security do you use for the cargo?
8 / Will you be expanding the port because of the Panama Canal Expansion?
9 / What type of training do you provide to your crane operators?
10 / Who are your biggest competitors?

2.5. Interviewees Profiles

Matt Wypyski joined the Mississippi State Port Authority at Gulfport, as the Chief Operating Officer, in October 2010. In his role, as the C.O.O., Matt has over-sight of the business development, terminal operations, facilities maintenance, engineering and finance departments. Matt has over 20 years of experience on both the ocean carrier and terminal operating sides of the business. Prior to joining the MSPA, Matt was the Executive Vice President of New Orleans Terminal LLC and Houston Terminal LLC. Domiciled, in New Orleans, Matt was responsible for stevedoring services, terminal operations, on-dock rail operations, warehouse & CFS operations, contracts management and business development. Matt is a graduate of the New York State Merchant Marine Academy, where he earned a Bachelor of Science degree, in Business Management and Marine Transportation with minor studies, in both Nautical Science and International Business. In addition, Matt holds a 3rd Officer’s License issued, by the U.S.Coast Guard. In his younger days, Matt spent time at sea on different types of merchant vessels moving cargo, between the U.S. and various overseas Ports. (Wypyski, M.)

Juan Antonio Sucre is the Corporate Affairs and Public Relations Chief at the Panama Ports Company. Countless emails have been sent to Juan, but there hasn’t been any response to obtain his career information.

REMARKS:

Figure C: Interview Instrument, Bus Tour, Panama

Figure D: Interview Instrument, Powerpoint & Q&A, Gulfport

Figure E: Interviewer, Juan Antonio Sucre, Panama

Figure E: Interviewer, Matthew Wypyski

Figure F: Overlooking the Ports

3- CASE STUDY

3.1. Location of Port of Balboa

The port of Balboa is the terminal port for the Pacific Ocean end of the Panama Canal. The port is ten kilometers southwest and five kilometers west-southwest of the Pacific Ocean. It is also a district of Panama City, Panama’s capital. See Figure D: Location of the Port of Balboa.

3.2. General Characteristics of Port of Balboa

The Panama Ports Company (PPC)is responsible for managing the Port of Balboa. The company operates by concession granted by the government of Panama in 1997. The Port of Balboa covers 182 hectares and contains four berths for containers and two multi-purpose berths. In total, the berths are over 2.4 thousand meters long with alongside depth of 15 meters. The Port of Balboa has 18 super post-Panamax and Panamax quay cranes and 44 gantry cranes. The Port of Balboa also contains 2.1 thousand square meters of warehouse space.("Port of balboa," )

3.3. Details of Port of Balboa

A subsidiary of the HPH Group, the PPC is transforming the port into a “mega-port” to increase capacity to 6.5 million TEUs per year. The PPC’s objective is to facilitate global commerce and economy growth by developing and modernizing the ports’ infrastructures and services. The Port of Balboa is strategically positioned to be a major player in world commerce and transportation. The world’s biggest shipping lines call on the port regularly, and the Port of Balboa handles a third of all cargo moving through Panama’s ports. In 2006, the Port of Balboa reached a new high in handling one million TEUs of containerized cargo. In 2007, it received the Maersk Seletar, the first post-Panamax vessel with capacity for 6500 TEUs. Also in 2007, it started weekly service to post-Panamax ships operating between Asia and the west coast of Latin America. The Port of Balboa is also a cargo hub for South America and the Caribbean which makes it such a unique port to Panama. ("Port of balboa," )

3.4. Location of the Port of Gulfport

The Port of Gulfport is a deep water seaport strategically positioned on the Gulf of Mexico, just 16 miles from shipping lanes and five nautical miles from the intercostal waterway. Because of its location, ships can be in International waters within one hour of sailing from the Harbor at Gulfport. The Port of Gulfport has direct access to Hwy 49 and it is only 10 minutes from Interstate 10, for this reason trucks can easily distribute products to 75% of the U.S. market within 24 hours.See Figure H: Location of the Port of Gulfport.(Mississippi State,”)

3.5. General Characteristics of Port of Gulfport

Governed by the Mississippi State Regulations and a five member board of Commissioners, the Port of Gulfport is treated like a private company. TheGulfport's channel is approximately 250 feet wide and is maintained to a depth of 36 feet. The Port's North Harbor is maintained to a depth of 32 feet, while the South Harbor and Turning Basin, which is approximately 1,320 feet wide, are maintained to a depth of 36 feet. The Port consists of 10 multiple berths ranging from 525 – 750 feet. All piers are public, however; most facilities are operated through leases, operating or space assignment agreements with private operators or users. The port is a bulk, break-bulk and container facility which includes:

• Over 400,000 sq ft. of Covered Storage
• Two Gottwald Mobile Harbour Cranes
• Open Container Storage with reefer plug outlets
• Bulk Material Unloading System
• Dockside and Off Dock Storage
• Open Bulk and Break-bulk storage
• Customs secured boundaries with roving patrols
• Container Freight Station.
• Ro-Ro ramp

The intermodal movement of cargo at the Port of Gulfport is accommodated on port in the form of vessel-to-vessel, vessel-to-rail, and/or vessel –to-truck transfer. At least 45 truck lines service the port of Gulfport on a daily basis.Currently, there are approximately 2,100 direct jobs (longshoremen, stevedores, and maritime agents), 400 Indirect jobs (OTS Truckers, Construction Workers and Retail Supply), and 1,700 Induced Jobs ( Gas Stations, Restaurants and Housing).(Mississippi State,”) There are also three sections to the port of Gulfport. The East Pier is used for warehousing and transit operations. The West Pier is used strictly for the unloading of Crowley and Dupont. And the North Harbor is used for the unloading of Dole and Chiquita.

3.6. Details of Port of Gulfport

The Port of Gulfport is unique because of the effects of Hurricane Katrina. The major hurricane of 2005 destroyed the docks, warehouses, barges, bridges, etc. which has allowed the Port of Gulfport to rebuild the port with new infrastructure. The state of Mississippi has received $570 Million from the Community Development Block Grant from the Federal Government to restore and improve the port. With the new improvements, new docks are being built, new warehouses and rail lines are being constructed, safety and protection is improving, a larger and more modern container terminal is being built, the west pier is being raised to 25 feet above sea level to mitigate against future storms, and most importantly, additional relatively well-paying jobs will be created in the city of Gulfport.(Wypyski, M.)

REMARKS:

Figure G: Location of the Port of Balboa