Further details have come to light regarding the new tender for finished vehicle handling terminal and berth development at the Mexican port of Lázaro Cárdenas.
The incumbent processor for vehicle handling at the port, Amports, has revealed that, contrary to last week’s report, which stated that the previous tender in 2009 drew no bids, there was in fact serious interest from both Amports and five of its competitors, which was doused only by what has been described as a minimum guarantee (MAG) clause which stipulated that if the winner of the tender did not meet the MAG then technically they could forfeit the concession.
In 2008-2009 the automotive business was in a full-scale depression and no company could entertain a MAG requirement as the industry was going through a transformational stage.
“It was difficult for anyone to put up that sort of capital and risk losing it,” said Amports CEO, Steve Rand. “That is what turned everybody off the last time.”
Rand said that such a risk was also untenable because Amports had already invested $5m in infrastructure and security at the vehicle processing terminal at the port.
“The difficulty for us in 2009 was bidding on a concession that we had already paid for improvements on,” he added.
Details of the new tender are yet to be revealed and the terms and conditions are expected in the early part of next year. Amports said that its previous investment means it will be studying the tender closely. Amports is currently the exclusive processor at the port, having leased a 20-hectare space for six years. Raid said that volumes are building back up toward 150,000 units this year.
One of the major requirements will be a $40m investment for development of a two-berth, 400,000m2 facility, although initially the terminal is expected to open with just a single berth serving an area of 300,000m2, with a nominal annual capacity of 250,000 units.
Lázaro Cárdenas does not currently have a dedicated ro-ro berth for vehicles, which must rely instead on a number of different berths at the port.
“The big money going into the tender is to construct a berth,” confirmed Rand. While he said that his company’s commitment at the port puts it in a good position for securing the tender, he recognised that the decision will come down to who is the most competitive between rival processors.
“We’ve done a great job down there and the customers like us, but when you get a tender, you’ve got to compete to get it,” said Rand. “When we get the tender we’ll get a clearer picture of what the ground rule are and we’ll react accordingly.”
Currently Amports is handling vehicles through the port for a broad range of carmakers including GM, Ford, Chrysler, Toyota, Mazda, Renault Nissan and VW. And while imports still represent the majority of activity at the port, at around 70% according to Rand, there are now a growing number of exports to Brazil and China amongst other regions.
“We are shipping Chrysler and GM products to China and we can’t get them there fast enough,” said Rand.
With the manufacturing base increasing in Mexico – Honda and Mazda are drawing up plans for facilities there – exports are expected to increase.
With the development of a dedicated ro-ro berth and expansion of dedicated space at Lázaro Cárdenas the port is expected to meet that increase.
