Colombia and Latin America Post-COVID19: digitization, ports and floating developments
By Nathalie Mezza-Garcia – CEO, Seaphia. @seaphiagroup
Translated to English by Carlos Andrés Caviedes
From Seaphia, we share a bit of optimism with Latin America and Colombia in the midst of the COVID-19 crisis.
Digitization of Procedures
COVID-19 has affected global supply chains. It has also forced those who can work from home. For many, it is the first time. This period of adaptation has pushed Latin American economies, based on cash and in-person errands, to adopt technologies that were available but not widespread here – video calls, online payments, etc. Within the region, schools, companies, governments, and universities are using software like Zoom and Microsoft Teams to meet and teach, since most of the people who have the privilege of doing so now telecommute.
Many of the technological transformations abruptly ushered in thanks to COVID-19 are likely to remain entrenched in Latin American societies once this crisis passes. Ideally, out of this crisis will come to a culture of greater ease for online banking transactions and other types of online procedures. This would be a big change from today's situation.
In many Latin American countries, buying online means clicking on a keyboard and then walking to the nearest payment point. This happens because not everyone has a credit card, because of the lack of friendly systems for online payments, or simply because buying online does not resonate with this face-to-face culture that loves shopping malls. Before the coronavirus, it was normal for people to spend a considerable amount of time queuing at banks. In some parts of Colombia, for example, running an errand could take up to 7 hours. Hopefully, a world of less bureaucratic and simpler paperwork, purchases, and collections will continue to emerge from this crisis.
If I am correct, online transactions have popularized in Latin America after, or thanks to, COVID-19, the now-battered Latin American port industry faces a steep slope of recovery in the coming years, after the COVID-19 recession.
In economic terms, this is great news for the rest of the world, since Latin America has more than 500 million people and is undergoing a rapid urbanization process. Despite a possible global recession, the demand for imported goods from this part of the world will increase, if digitization continues after this health crisis. There are precedents for similar situations in recent history. For example, after SARS, the great earthquake in Japan in 2011, and the tsunami in Thailand, the shipping industry boomed as companies began to prefer 15 to 30 days of inventory. And who stands to benefit from increased demand more than ports?
In the coming years, the global port industry will benefit from an increase in demand from Latin American consumers for online goods. It is unavoidable. As a consequence, many warehouses and port facilities will have to expand. Distribution centers like Amazon's will need a space, once giants like this one penetrate Latin American markets with force. However, as I already mentioned, the shipping industry has been affected by COVID-19, and global supply chains, port, and logistics operations have, for the time being, slowed down almost everywhere. Likewise, many goods have been accumulated in ports and warehouses. For this reason, someone may wonder how, in times of economic difficulties, can ports and warehouses expand?
Floating urban developments
The answer is quite simple: floating ports. This is a way to expand operations in a more sustainable way and after a certain depth, much cheaper than traditional maritime constructions. High sustainability with low prices is for port and warehouse expansion is ideal for times when the money supply is tight but the demand is up.
Floating facilities provide a sustainable opportunity to increase port area. Floating ports, especially seaports, have an advantage in terms of area, compared to conventional ports. By floating on the ocean, 3 or 4 of the floating harbor ridges can be made available for ships to dock and unload. For this reason, the docking and unloading area can be up to 4 times greater than that of a port with only one (edge) facing the water. Floating ports are also more sustainable than those made from reclaimed land as they leave the sea ecosystem below the port intact. As the Dutch firm Blue21 has stated on several occasions, flotation is also a much better long-term alternative for expansions in coastal areas prone to sea-level rise. Unlike land claims, floating platforms go up or down as levels change. Similarly, the capital required to deploy floating projects is much lower than building facilities on reclaimed land and their construction time is also much less. These projects can be built on land and then assembled near the final site. They can also be built on-site and towed to their final location.
Although floating constructions are not yet as common in Colombia and Latin America as they are in the Netherlands, Denmark, Finland, or Japan, in times of crisis it is advisable to look for innovative, different, sustainable, and lower-cost alternatives. Especially since, as unlikely as it may seem to many today, one day the entire world may enter a global state of alert similar to the one we are in today. It will no longer be because of a viral pandemic, but because of climate change. And what better way to reduce its impact on cities than to start planning while there is still a little time left. We still have time to adapt.
How can Seaphia help ports and coastal cities against these threats? We can work together with your local port or coastal municipality to design a sustainable and floating port expansion strategy. We can advise you at every step of the process, from studies and architectural design to how to improve the regulatory framework of your port's free zone to be more competitive.
Do you have an idea? We can help you at every step of your project. Let's talk!