Panama Green--Evergreen Builds New Docks in Colon

When world-class shipping magnate Chung Jung-fa decides to expand, news of the move shakes up industry. It caused a big stir when he decided to open Middle Eastern shipping lines 28 years ago, and similarly when he went into the airline business six years ago. Now that he is building a container terminal in Panama industry is all abuzz again.

With true global reach, Evergreen keeps up with the latest trends in shipping.（courtesy of Evergreen Marine Corp）

What is so special about this container terminal that Dr. Nicolas Ardito Barletta, head of Autoridad de la Region Interoceanica (which has authority over the canal), says that it is more important than Fort Davis?

Imagine that you've just boarded a helicopter, leaving Panama City on the Pacific Coast and flying along the Panama Canal, passing occasional container ships along the way. On its western end, the canal is broader and its vistas more beautiful as green hills rise from both banks. This stretch makes use of the natural shipping channel in Gatun Lake.

After flying for over an hour the azure expanse of the Atlantic Ocean appears before your eyes, and you have reached your destination: Coco Solo, location of the Colon Container Terminal being built by the Evergreen shipping group.

The site, now busy with construction, is no small one. The stroll from its entrance to the shore has shirts sticking to sweaty backs. "Wow it's hot!" the visitors declare.

Wearing a plastic construction helmet, Feng Hai-pin, special case manager for the Universal Construction Consulting Company, spends his time scurrying about on this construction site by the shore. This is fitting, since "hai pin" means sea shore. Smiling, as if to downplay the difficulty of the task, he says, "Everyone is stepping up their efforts so that the first dock will be ready when President Lee comes to visit in September."

Keeping up with new trends in shipping

They are indeed working on a very tight schedule. Evergreen had been doing research and survey work relating to building a container terminal at Colon even before 1994. They signed an agreement with the Panamanian government in early 1995, and when the agreement met with the approval of Panama's parliament at the end of the year, work began.

Hong Yi-te, general manager of the Colon Container Terminal, points out that the container terminal project has four different phases of construction and that the first phase won't even be finished until January of next year. Nearly US$100 million is being invested in that phase alone. After the facility is built, it will boast 612 meters of "container berth" able to accommodate two ocean-going Panamax vessels (the largest vessels that can navigate the Panama Canal) or three feeders (smaller vessels that ship loads from transhippment centers like Colon to smaller ports that have shallower harbors). The terminal will be able to handle 400,000 20-foot containers in a single year.

"In the past, when Evergreen freighters approached shore, they used the docks managed by the Panamanian port authorities," Hong Yi-te notes. "In the future, they can rely on their own docks."

Since Evergreen can already lease, why is it incurring the tremendous expense of building its own container terminal?

"Panama is proceeding fast with privatization, and recently all of the docks have been turned over to private hands," Hong explains. "The Hong Kong firm Hutchison Whampoa made the winning bids for the facilities at Panama's two principal ports at Cristobal and Balboa. Cristobal is where most of Evergreen's ships now dock."

Apart from wanting to keep up with the competition, Evergreen has longer-term considerations.

Since the end of the Cold War, the economic map of the world has been redrawn. Evergreen, with the largest shipping fleet in the world, has a firm grasp of new trends in shipping.

In the past, Evergreen agressively developed shipping routes to developed nations, working hard at entering markets that were formerly the exclusive province of Western shipping companies. Thirteen years ago, they opened the first round-the-world east-west container shipping routes-from the Far East to America or Europe and back again to the Far East. These routes must go through the Panama Canal.

From east-west to north-south

After establishing these round-the-world east-west shipping routes, this giant of the shipping world cast its eyes upon developing north-south shipping routes to developing nations. These extended its routes to the markets of East Asia, Central and South America, the Caribbean, the Mediterranean, South Africa, the Adriatic Sea, the Red Sea, the Persian Gulf and Australia. Matched with its existing regularly scheduled east-west round-the-world shipping routes, the result was truly global coverage.

On the Evergreen company global map, with its more than ten shipping routes spanning the globe, Panama occupies a key position, serving as a "central transshipment center for transglobal routes that connect east-west shipping routes to North and South America and the Caribbean."

"Latin America is in the midst of aggressively promoting economic development," Hung says. "It's a rising market with a lot of potential."

While there are high economic expectations for Central and South America, why is it necessary to build the Colon Container Terminal for transshipment?

The main global east-west shipping routes are like highways, with the branch routes akin to provincial and county roads. The big trucks on highways get off on interchanges where they turn their loads over to smaller trucks that ply the provincial and county roads. Only after so doing can they get back on the highway again. For marine freighters, transshipment centers are like these interchanges.

In addition, the natural conditions and man-made facilities of the ports along any given shipping route vary, and not every shipping route suits big container ships.

"The number of ports in which huge container ships can dock are limited. The harbors have to be deep and the docks equipped with the latest equipment. Container ships can't dock at ports that don't meet these conditions. Instead they must unload their cargoes onto feeders in transshipment centers, which then sail for those harbors.

For instance, in ports without gantry cranes, if boats aren't equipped with cranes themselves, then there's no way for them to unload their cargo.

Marine interchanges

To meet the demands of global shipping, Evergreen has consistently put great stress on investment in docks. Besides the facility in Colon, Kaoshiung's No. 115 Container Terminal was also the result of Evergreen investment.

In Thailand, Evergreen has a long-term lease on one dock from the port authorities there. Administering the dock for four years now, Evergreen has improved the facilities. What's more, the company also has plans for investing in a harbor in Vung Tao, Vietnam and is now carrying out topographical surveying there. There appears to be great potential for direct shipping between Taiwan and mainland China, and Evergreen has also won the bid for the No. 5 Container Terminal at docks No. 79-81 at Kaoshiung Harbor and has plans for building a new facility there next year.

"The advantage of building docks yourself is that it allows for easier administrative control, and you can reduce costs," an Evergreen representative says. The company has experience running docks in many different places, and thus they have trained staff who know the tricks of the trade and are better able to meet varying demands. Furthermore, "Evergreen's container fleet is young, and its efficiency grows when modern dock equipment is available."

The truth is that building its own container terminals is just one of the areas in which Evergreen is pursuing diversification.

Evergreen is world famous for shipping sea freight, but few know that it is also involved in various related industries, such as in making containers, automobile transport racks, tow trucks, container ships and container docks. With these side businesses, Evergreen is able to make and administer itself what it needs to use for shipping.

Evergreen has invested more than any other international shipping firm in mainland China and Southeast Asia. There it has invested in various firms in upstream and downstream industries because the related services in these areas are not as comprehensive as they are in Europe and the United States. In order to make their shipping operations as efficient as possible, Evergreen has provided thorough vertical integration of services, and it can handle the whole shipping process from trucking, to loading at the docks, to moving the freight at sea.

Another general headquarters

But it's not as if any big company can just go ahead and decide to build a port. More is needed than mere financial might. Evergreen also has substantial, long-held connections in Panama.

Evergreen CEO Chang Jung-fa describes the relationship between Panama and Evergreen like that of a "husband and wife." Of the more than 80 container ships in Evergreen's fleet, 45 sail under the Panamanian flag, and Chang is an honorary consul at the ROC consulate in Panama City.

Two years ago Evergreen opened up a direct shipping route to Panama, and at its inaugural celebration Chang revealed future plans to branch out from Panama to other Latin American destinations, as well as plans for establishing a maritime academy, building hotels and investing in the communications industry there.

In Panama they tell a joke about an Evergreen guy who gets pulled over for speeding but is sent on his way when the cop realizes who he is. It turns out that Evergreen made a gift of 150 Sanyang motorcycles to the Panamanian police force.

It is precisely because Evergreen has a long history in Panama that the various relevant government departments have been so cooperative regarding Evergreen's plans for the Colon Container Terminal.

"Drug smuggling is rampant here. In order to ensure the future safety of the docks we are installing our own security system," Hung explains. "There will be three different shifts of guards stationed here and doing patrols, providing protection 24 hours a day." In the meantime, government police have been assigned to help out, and they have taken on training the CCT security force.

A three-way rivalry

Although it has a good relationship with Panama's government, there is no way to ensure that Evergreen will make money from this operation in the future.

There were originally two large container terminals at either end of the canal, for which winning bids were made by the Hong Kong firm Hutchison Whampoa, which is said to have PRC financial backing. This worried the US, which still has authority over the canal, and the Americans protested to mainland China.

In order to shore up its own position, the United States is now building docks on the Atlantic side. When Evergreen's facilities at Colon are included, three container terminals will be in service on the Atlantic side. Competition is sure to be fierce.

Evergreen is nonetheless quite confident. "It's a great bit of harbor we obtained," says Cheng Chao-chang, the assitant head of maintenance at the terminal. The harbor's location puts it close to the Colon Free Trade Zone, and the modern docks will make use of the most advanced automated equipment, "I am confident that Evergreen's experience and enthuiastic service will definitely be popular with customers."

He opens the blueprints to explain. The Colon Container Terminal and the canal itself each have separate access channels to the Atlantic. The channel can accommodate ships with drafts of up to 15 meters, and those with drafts of 14 meters can berth at the terminal. And there is 600 meters of turning space at the docks, allowing large container vessels to dock.

Apart from these natural advantages, Evergreen is also going all out to install state-of-the-art hardware and software at the facility.

"The Evergreen Group has just introduced an automated dock operating system, and the Colon Container Terminal is the first place Evergreen is installing the system overseas," a company brochure states.

No fear of power shortages

The system will help with yard allocation control, vessel preplanning and control, crane scheduling and berth planning.

"CCT is a common-use state-of-the-art container terminal, designed with the most advanced technology available, to guarantee timely service to all steamship lines on a 'first-come, first-serve' basis."

In this 25-acre facililty, Evergreen is also constructing a four-story office building, which apart from being used by Evergreen itself, can also be rented out to shipping-line agents.

As for the problem of power shortages in Panama which so concerns Taiwanese companies in Fort Davis, for all of the machinery and automated systems that require electricity at the Colon Container Terminal, Evergreen has the total solution: its own power plant. The plant, with three electric generators inside, will be able to provide for all the electrical needs of the docks during power shortages.

What's more, Evergreen has also established a maintenance station, gate house, refueling station, inspection ramps for customs and agricultural inspections, disinfecting equipment, and so forth. Evergreen plans on earning the regard of the global shipping community with "international service and reasonable prices."

Green Evergreen

On June 2, Hung Yi-te was driving to Fort Davis, where grounds were being borrowed to put on a ceremony marking the start of training for the first bunch of permanent CCT workers: the security force.

Standing at attention in front of the inspection platform, the 70-some trainees fell into line in the proper order as their troop's tall and dark leader barked out his commands. Though it was only the first day of their training, the guards-to-be already had a commanding presence.

As they stand in front of you, the color of their skin and nationality seems no longer to make any difference, and what becomes apparent is that Evergreen's strong corporate culture-that "green" spirit with which the firm is so associated in Taiwan-is reverberating here in an exotic land on the other side of the world.

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(above) The Evergreen Group has a fleet of over 80 container ships, and over half of them fly the Panamanian flag. The Panama Canal must be passed through in all east-west shipping routes. (courtesy of Evergreen Marine Corp)

(left) On the 25-acre site of Evergreen's Colon Container Terminal, work is now underway on the nearly US$100 million first phase of construction.

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With true global reach, Evergreen keeps up with the latest trends in shipping. (courtesy of Evergreen Marine Corp)

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Evergreen has a long history in Panama: Eva Air is one of the few international carriers to fly to Panama.

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Police officers riding Sanyang motorcycles that were gifts from Evergreen are a frequent sight on Panamanian roads.

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Security guards, the first permanent staff hired for the container terminal, are already receiving strict pre-job training.

Evergreen has a long history in panama: Eva Air is one of the few international carriers to fly to Panama.

Police officers riding Sanyang motorcycles that were gifts from Evergreen are a frequent sight on Panamanian roads.

Security guards, the first permanent staff hired for the container terminal, are already receiving strict pre-job training.