Developing Export Business Strategies       Port of Santa Marta Colombia U.S. Trade & Development Agency DMJM + Harris, Inc. USTDA & Port of Santa Marta Mission The government of Colombia privatized the country’s port system in 1993. All operations at Santa Marta were handed over to Sociedad Portuaria de Santa Marta (SPSM) in the form of a 20-year concession for managing and operating the port. The U.S. Trade & Development Agency (USTDA) is an independent agency seeking to increase U.S. exports. The agency finances engineering and economic studies which have the potential to generate purchases of U.S hard goods and products. Thus, SPSM sought to expand its container terminal capabilities with products having significant U.S. content. Project Setting & Goals The City of Santa Marta, located on the Atlantic coast with access to the Caribbean Sea, has historically been an important port city for Colombia. It is one of four major general cargo ports in the country and competes with ports located in Cartagena and Barranquilla all within about 100 miles of each other. Santa Marta has about a 25% market share of all cargo flowing through the four major ports. There are a total of seven berths at SPSM today. Review of the seaport facilities indicated outdated design features for modern efficient cargo handling putting SPSM at a competitive disadvantage compared to other Colombian ports. Actual facilities include warehouse facilities, but with little on-dock space for modern cargo handling equipment. However, SPSM is blessed with natural deep-water access suitable for large container and dry-bulk vessels. SPSM is currently the only major general cargo port in Colombia with rail service. The objective of the work was to perform a complete feasibility analysis which would enable SPSM to meet anticipated cargo growth demand by modernizing the facilities within the context of business goals of the concessionaire. New facilities at the project outset were envisioned to include at least one modern container berth by 2005 and a second by 2010. Specific project goals included: Focus on upgrading existing facilities rather than complete new design and construction Find ways to bring modern on-dock rail service to the new terminal(s) to capitalize on SPSM’s rail link to Bogotá. Prepare a phasing plan of modernization that would allow continuous operations and seek to match new investments with current revenue generation. Prepare a final report in suitable context to attract investment from Export Credit Agencies (ECA’s) or other international lenders by demonstrating return on capital within parameters favored by selected ECA’s. Sullivan Consulting Group (SCG) served as a subcontractor to DMJM+Harris, Inc. SCG focused on terminal configuration, business planning and financing options for implementation of new facilities. Approach & Outcomes The project had two principal owners each with a distinct objective; SPSM who sought to expand its business with new facilities and USTDA who sought to increase U.S. exports. USTDA financed our work with the expectation that its goals would be met. Our approach to the project necessarily took into consideration the expectations of both principals to best align them in order to have a satisfactory overall outcome. The consulting team used electronic data transfer throughout the project enabling engineering and other professional resources in Los Angeles, New York and Santa Marta to achieve all desired outcomes. SCG conducted telephonic interviews with Caribbean shippers and the other Colombian regional seaports to determine commodity potentials and sharpen the focus on real growth opportunities at Santa Marta. A key link to future growth is the refurbishing of the rail service to more efficiently and swiftly move cargo from SPSM into the interior of Colombia. The key outcomes of the project included: Identifying $18 million in potential U.S. exports for immediate improvements Financial modeling of continued expansion beyond present phases Helping to establish the SPSM container terminal facilities project as a national development priority for Colombia Establishing priorities for U.S. origin goods and services back to top Copyright © Sullivan Consulting Group, Inc.