Port of Sao Paulo Santos Management - Case Study Example

"THE PORT OF SANTOS, (Brazil)" This written paper tells us about the leading port of Brazil which is "The Port of Santos". It contains allthe information about its structure, location, Developing plant and its labor issues. We get information about how this port takes part in the development of country, other ports, markets, people within and outside the country and also tells us about the policies and plans to make it a significant part of the international business. THE PORT OF SANTOS: Port of Santos or So Paulo's Port of Santos, situated only 36 miles (60 kilometers) from the biggest concentration of inhabitants in South America, is the most important port in Brazil. So Paulo has 22 million residents and represents 40 percent of Brazil's GDP It is near to the mainland and Brazil's biggest city, Sao Paulo. Santos is considered to be a good harbor for ships, fishing and trade purposes. (The ports of Brazil, 1942) The Santos port approaches to increase the rate of exports by cheap means of transport. It enhances the trade by providing a track to the countries linked with the Atlantic Ocean. It has its origins associated to the coffee trade. It also facilitated to advance the sanitary situation of the region. It also played an essential role in the industrial growth of the State of So Paulo and of the entire Brazil. The Port of Santos is situated in the town that has the same name in the coast of southeastern Brazilian state of Sao Paulo. It is the port that transported most of the goods to the Arab countries in the year 2005. Goods worth at US$ 2.1 billion moved across the terminal heading towards the Arab countries in North Africa and the Middle East. In conditions of quantity, shipments reached 5.3 million tons. "It is the Brazilian port with greatest infrastructure," elucidates the secretary general at the Arab Brazilian Chamber of Commerce, Michel Alaby. There are 64 private terminals at the Port of Santos and total area is 7.7 million square kilometers. It gave refuge to 44.7% of the Brazil's exports to the Arab states, which made a sum of US$ 4.7 billion up to November, 2005. (Edgar Rodrigues; Clifford Harper, 2005) The chief commodity to export is coffee, whereas its exports also include bananas, soybeans, cotton, sugar, vehicles and machinery. It is also a chief transshipment port for good and commodities created in all the Southern cone countries (Brazil, Chile, Paraguay, Argentina, Bolivia and Uruguay). For instance, in the past, Santos went beyond Buenos Aires as Latin America's second-largest manager of containers. Land access and division within the ports are two important issues. The port is provided by quickly to be finished toll road that supplies high powered, quick access to So Paulo. Just about 90 % of the export and import cargo is conceded or from the port by trucks. There are Five railway companies, under allowance since 2000, serve the port. The port had an aim of covering 10 million tons of load carried by rail at the end of 2002, an ambition that was met. Investments of rail facilities in the port possessions and use of concessions have radically improved the efficiency of rail car use. 20% of container traffic from the port is controlled by rail, around twenty thousand TEUs per month. Rail investment in infrastructure on port possessions is a significant factor of increased access to the port. With no corresponding investment in rail infrastructure In further elements of the state, however, the use of rail for shifting goods also from the port will be limited. Projects are being generated that will permit leasing of rail infrastructure for private workers, created investment dollars. Rail services, in amalgamation with inland water barge, symbolize a significant access mode for agricultural commodities, particularly soy. Other policies have been used to develop the port's efficiency. The port is maneuvered twenty four hours a day with a twenty four hours reservation method for trucks due to overcrowding on the local road system, and port organizers are considering a domestic truck only road to supply more capable truck movement. A tactical plan for the port contains channel expanding, application of intelligent transportation system (ITS) expertise, truck storage services, and the establishment of a free trade zone. Lastly, port officials are worried about new security clearance necessities that might entail improved investment in new equipment, although they assume terminal operators to take on much of the burden of increased expenses. Brazil's water transportation system has great potential. The Brazilian government, with the help of the private sector, is now focused on developing the entire water transportation systems to not only make it suitably modern and competitive for the 21st century but also to support the agro production and goods manufacturing sectors. In the coming days, the port looks forward to a considerable raise in trips from cruise ships, and a new passenger cruise terminal has been created by it in anticipation. Additionally, the port is building a conception of a super port that would be capable to control highly increased trade volumes resulting from the Free Trade Area for the Americas. The Port of Santos' privatization model permits industries in the fields of portuary operation, port works, leasing of land, portuary tools, containers and industrial centers. Progress and efficiency have improved. Because of the Santos Port Leasing and Partnership Program (SPLPP) twenty four areas have been leased and another twenty seven are under inspection, together with the Terminal of Grains (Tegran), the second Terminal of Containers (Tecon 2) and the Terminal of Fertilizers (Tefer). Amongst the substructure works, the building of a tunnel under the bay of Santos is open to private undertaking, with 2,700m, connecting the left and the right boundaries.( www.labournet.net) The Santos Port Leasing and Partnership Program (SPLPP) create the Santos a center of attention for private undertaking to the struggles of developing the port's cargo flow. It approached to year 2003 with 70.28% of the port previously leased or under leasing procedure and with the records for new investors and involved companies rising every day. Until the ending of the whole procedure, the port shall be getting R$1 billion in investments towards its modernization, R$ 679 million of which are already protected. In the majority cases areas already committed to particular functions are under leasing practice. To facilitate stimulate competition; the program connects concessions to objective results thus generating contractual compensations, so that owners invest in the regions' and services' modernization. Businesses need area in which they have interest, their demand is subject to study and, afterwards, experiences a process of public consideration and leasing. The Port of Santos was one of the first in Brazil to put into practice the Ports Modernization Law introduced by the Brazilian government in the early 1990s. The law's privatization requirements have resulted in approximately 80 percent of the port region being handed over to private procedures under a 25-year concession agreement. An objective of the privatization was to urge private investment to make the port more proficient. Since the law's implementation, about $360 million has been invested in the port by concessionaires, with another $330 million under agreement. A noteworthy change in the labor market has been made happen by making a number of port operations privatized. During 1997, the entire labor relations were combined into one organization, which struggled for financial suffering allowances for those who stood to lose their careers after privatization. The effect on labor has been severe. In 1993, before the modernization law put in to practice, the port authority had 7,372 workers. After privatization, the figure fell to 1,197 workers. In 1993, non-port authority workers quantified approximately 28,000, while these days the number is 10,860. The effect of lessened labor cost has been a major turn down in average cost-per-container moved. Earlier than privatization, the average cost was $500 for each container, whereas today it is just over $200. Labor costs correspond to 60 to 70 percent of this cost. The labor diminution also produced political issues for the port. About 2,000 workers took untimely retirement before privatization, which the port powers had to sponsor out of its annual profits. For many years, this trouble severely limited the quantity of funds accessible for reinvestment in port facilities. The Santos port transports goods, services and facilities to the markets within the country and also makes them available for the overseas markets. It provides a cheap means of transporting goods from one place to another. The hinterland markets are taking advantages of Santos port and consider it a great source of development. The transshipment trade is being facilitated by the government in order to improve trade between the countries linked with Brazil via ports especially the Santos port. The Port of Santos, Brazil is the largest port in South America and an important export center. As compared to other ports, companies are in favor of the location of the Port of Santos in the agricultural and manufacturing fields due to its strong, privately organized infrastructure equally able of controlling both containerized and bulk cargo. Sao Paulo have a number of well-established automotive, pharmaceutical and engineering manufacturing industries, which represents about 30 percent of the total goods manufactured in Brazil, the port of Santos is aa major link between Brazil and its international trading partners. The port of Santos has utmost importance in dealing with Arab countries. At the present time, the Port has 11 Kilometers (about 6, 9 miles) of docks and has the label of the biggest of South America. The Port consists of 42 warehouses of primary area and 36 warehouses of rearguard (where division is made), with a total of 510.000 square meters. The port of Santos attracts tourist and families to see the sight and have the pleasure of observing about the port of Brazil. There are many tourism vessels on which a lot of people can travel to know Brazil shore or the world. (Containerisation International. 40, 52, 2007) Santos has changed a lot in the last 50 decades. A tourist or voyager would have experienced a totally different vision of the Santos as compared to the modernized and developed picture of Santos today. Cargo ships jam-packed into the port, exactly the same manner as today, but in the 1950s modern technologies and tools were not available (like computers, containers or cranes). In the early years, Green coffee beans were picked up onto vessel and ships in meshes using big hooks on the end of ropes. At present, ships traveling to Santos hold their goods in containers like the Boomerang Box, and huge container cranes instead of hooks and ropes to load and unload the goods. (Containerisation International. 39, 80, 2006) In most of the Australian ports, there were usually 11 or 12 workers per shift per gantry crane, until April 1998. By means of the new enterprise agreement, this number was decreased to six workers per shift per crane, and considerable productivity profits were attained. In the Port of Santos, Brazil, in 1997, labor and administration arrived at an agreement dropping from 12 to 10 the number of employees per shift per crane. As a general subject, port terminal operators would rather occupy a lesser number of employees per shift while sticking to safety and health regulations, and give higher salary for a highly professional, lean team. Regardless of the significant role that labor plays in ports, many countries have projected and put into practice port improvement adjustment programs without the involvement of employees' representatives and unions. Failure of governments to achieve constructive labor participation in port reforms can generally be related to distrust coming up from historic disagreements and the frequent inconsistency between capital-labor and trade-offs; insufficient and early preparation of port reform proposals, creating it hard for labor to play a part in discussion and conferences; and financial resources too inadequate to cover education and training requirements produced by port reform. Administrations, however, have much to achieve from involving labor early and efficiently in the port reform procedure. A unique port workers' fund is being established in Santos which should solve th problems and resolve years of bitter conflicts between dockworkers and port operators at Brazil's most important port. As determined by Antonio Carlos Branco, leader of the Santos port operators' union (Sopesp), a main outline behind the scheme might also relieve the over-reliance of the traditional port city on merely port-related posts. The Reais 80(US$47.73) million funds would be used to improve the effect of cutting the labor pool in Santos to around 4,500 dock employees from a current total of 11,500 employees. Capital from the fund will be utilized to retrain port laborers provided work by the administrator of the informal labor pool, known as OGMO (Orgao Gestor de Mao-de-Obra), for alternative work, within new high-tech and light businesses that will be supported to locate to Santos. The scheme is also supported by the Sao Paulo state Federation of Industry (FIESP), the Santos Port Council, local importers/exporters, state and municipal governments and national governmental bodies contacting and interacting with port workers, according to Branco. He said: "The fund would be a unique way of resolving the problem of high port labor costs impeding the growth of Brazilian trade''. He continued: "Once we get the money into a fund we will reduce the numbers in the OGMO to 5,000 workers immediately. Rules for dismissals and claims will be carefully worked out and we think that within 90 days we will have a final draft for the fund and its operation The local and central governments will help bring hi-tech and small businesses to Santos within three years or so. The technical side is finished and is now being presented to the unions for discussions. Once they have agreed to it we will present it to Grupo Executivo para a Modernizacao dos Portos (GEMPO - a national body co-ordinating the modernization and privatization of Brazil's ports) and to the government in Brasilia''. At Sopesp, Branco has established a team divided into three units, respectively focussing in containers, bulk cargoes and breakbulk cargoes. He further declared: 'We have contacts with the stevedores at the moment but the elections for the stevedores' unions are to be held in November 1999 so they are not willing to make paper agreements for fear of being accused of giving up some rights, etc. but we keep negotiating and after November we expect them to make a general agreement for labor rules, gangs, everything. We just have to wait.' Sopesp already has a contract with coopers/watchmen/port administration staff which operated until February 29, 2000. The stevedores/tallymen/port workers have their contract plans inspected at the Regional Labor Tribunal, of Sao Paulo state. Branco said it was significant that there were no further strikes. He told Containerization International: 'It is not just a problem of direct financial losses to port operators and shippers but also it presents a bad image for foreign trade, importers abroad would conclude they cannot trust us and yet we have a desperate need to increase our foreign trade.' (Containerization International, October 1999). As during the first wave of globalization, the accessibility of more proficient shipping systems has been achieved by the initiation of more professional communication systems. These new communication technologies facilitated shippers to shape volumes and delivery dates of merchandise to the accurate requirements of importers. The Internet at the present permits even smaller-sized companies to participate with their larger corresponding companies, who had achieved a competitive benefit through the committed but more expensive electronic data interchange (EDI) systems. For the low opening cost of a personal computer, a modem and an Internet link, anyone can now access the Internet. More and more shippers and transporters decide to do business through the Internet for the reason of the lower managerial costs involved in carrying out transactions. This means major savings because carriers and shippers depend less on third-party value-added networks that are in general required to run EDI transactions. The use of EDI has improved the facilities provided at the port of Santos. There is also an increasing hope that the Internet will soon give all the benefits that had earlier been limited to expensive EDI systems. Most significant, Internet data transfer will become more and safer. Furthermore, it is accessible 24 hours a day, permitting business contracts to be made at the shipper's and carrier's ease. It could offer niche markets for smaller transporters, allowing them to capture a better market for small package deliveries. The port gives a lot of services which included in to its value. At the present time, Santos is the biggest city on the So Paulo State shoreline and it has outstanding structure for business and services. It is honored of having the biggest garden in the earth: 5.3 km (3.3 mi) along the shore, with a bike path along the entire extension; plus it is one of the most excellent Brazilian destinations for diving. Its central part protects the dense Atlantic Forest vegetation, securing brilliant outings for those who take pleasure in ecotourism and journey tourism. There are also town outings, such as museums, historical structures, churches, and a lot of others; catching the attention of tourists from all over the countryside and the world. (www.braziltour.com) Bibliography: (1999). Mercosur. Containerisation international regional review. London, Emap Business Communications. UNITED STATES. (1942). Ports of Brazil RODRIGUES, E., & HARPER, C. (2005). Santos: the Barcelona of Brazil : anarchism and class struggle in a port city. Anarchist library series, 9. London, Kate Sharpley Library. GITAHY, M. L. C. (1991). The port workers of Santos, 1889-1914: labor movement and urban culture in an early 20th century city. Thesis (Ph. D.)--University of Colorado, 1991. (2007). CARRIER - The rise and fall and rise of Mr Klien - Richard Klien, a doyen of Brazil's container shipping and port industries and current chairman of Santos Brasil, talks exclusively to CI about his experiences at Transroll. Containerisation International. 40, 52. (2006). TERMINAL - Building blocks - Santos, Brazil's largest port, is set to become even bigger as it builds new facilities in anticipation of rising cargo volumes and a need to raise its efficiency. Containerisation International. 39, 80. www.labournet.net www.braziltour.com/ Read More