Legal maneuvers put Mexican port in a sea of trouble

The little-known port on Mexico’s Pacific coast has become the latest target of controversial shipping company Transportacion Maritima Mexicana (TMM), which is now fully linked to Stevedoring Services of America (SSA).

“I can’t tell the difference between the two,” says Juan Paratore, administrator of the Port of Lazaro Cardenas (www.puertolazarocardenas.com.mx), about TMM and SSA.

The Port restarted container operations in November 2003 after eight years of devoting its facilities mostly to serving the needs of a local steel mill. Now TMM and its partner, SSA Mexico, have launched what appears to be a smear campaign against the new container operations. The two companies claim a court of law has declared the operations illegal and that TMM/SSA have the right to operate the Port, which is presently being managed by Hutchinson Ports and its Mexican counterpart, Controller and Operator of Terminals (COTSA).

Paratore claims the smear campaign is an obvious low blow aimed at the Port and questions the “moral quality” of both TMM and SSA Mexico, saying they are lying about the court mandate. “We know nothing about a legal resolution and have not been notified by any authority about it,” he says. Paratore describes the background of the rift: Eight years ago TMM was awarded management of Manzanillo, another Pacific port about 150 miles north of Lazaro Cardenas. As it took over operations, TMM was able to secure business from the entire area, handling 70,000 containers a year. Loss of business by Lazaro Cardenas made it a virtual ghost terminal.

As Paratore tells it, whenever the container terminal has gone up for bid, the bidding process has been blocked by TMM, which he suggested didn’t want to see Lazaro Cardenas revived as a competitive port to Manzanillo.

Even so, the Port of Lazaro Cardenas resumed operations last November and by early December three large container vessels had docked there. According to Armando Herrera, the Port’s marketing manager, “The future looks highly promising, as we already have requests from leading shipping companies to create additional facilities here.” Some projections say the port could ultimately manage as many as 200,000 containers a year.

COTSA manager Francisco Lopez feels the efforts of TMM/SSA to cast doubt on the ownership of the Port won’t make a dent in port operations or create uncertainty among potential customers. “Over the next few years Lazaro Cardenas will become the most important port in the Mexican Pacific,” he says confidently.

Paratore agrees, feeling that what TMM and SSA Mexico really fear is the competition from Lazaro Cardenas with its deep sea docking facilities, with a 50-foot depth at one of its docks handling as much as 120,000 tons of cargo. A nearby superhighway is presently under construction. Lazaro Cardenas also has a rail spur, co-owned in part, ironically, by TMM’s TFM Northeast Railroad and Kansas City Southern.

Jorge Lecona, the future Hutchinson Ports manager for Mexico, says his company has no doubt about the legality of its operations at Lazaro Cardenas, and plans to make new and significant investments in the new venture.

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