The first case of internationalization in a Brazilian port
Cargo comes and goes to more than 600 ports in 125 countries. Some terminals are operated by major global players. Most shipowners (ship companies) are foreign. But is that enough for Santos to be truly international?
This was the first question I asked when I took over as head of international affairs at the presidency in Santos Port Authority – SPA, in August 2019, at the invitation of Casemiro Tércio Carvalho, a leader I greatly admire. In this article, I report my experience of 10 months to internationalize SPA.
I must emphasize that in this article we will talk about SPA's journey in its internationalization process and it is beyond the scope of addressing other organizations present at the port, each with its stage of local or international presence.
But what would internationalization be for Santos? Open offices abroad? Acquire ports in other parts of the world? Prospecting international cargo to enter through Santos? Diversify sources of income into activities other than cargo handling? To design this internationalization strategy, I started with the first exercise:
How do the biggest ports in the world work the international agenda? Rotterdam, Dubai, Miami, Singapore, and others. Ports around the world use internationalization as a strategic decision for the company to overcome complex challenges to be solved at the domestic level. Makes a lot of sense, doesn't it?
Rotterdam has a spin-off called “Port Rotterdam International” which attracts international investments to the port, but also sells consultancy, education solutions, manages the nine international offices, and buys stakes in ports around the world (including Brazil). Therefore, due to the limitations of the domestic market in the Netherlands and even in the European Union, the diversification of economic activities, in addition to the movement of cargo, allows revenue to continue growing and ensures the position of global leadership.
But you don't need to be a giant to internationalize in the world of Ports. The Port of Abu Dhabi assumed the strategy of acquiring other ports/terminals in the world in order to continue growing, as it has a large domestic market limitation (United Arab Emirates).
The Port of Miami has chosen to build its global brand positioning as the “global cruise capital”. This brand projection is part of all communication materials in the Port of Miami (which also move containers). Miami is the main gateway for Latin American products in the United States.
What is the Port of Santos
Santos Port Authority is a 128-year-old federal public company. The company, which already had 17,000 employees who carried out the entire cargo handling operation, now has a little more than 1,000 employees. They guarantee the operation's functioning and interact with more than 40 terminals in 16KMs distance that handle all types of cargo: commodities, containers, liquids, and ro-ro (wheeled vehicles of all types).
The structure by water and land is impressive. All the international investors who visited Porto could not believe the robust state-of-the-art structure that we have in Brazil. Some of the terminals are the largest in Latin America. And why do few people know about this? How do we make the world know who we are here in Santos?
The design of the internationalization strategy
Creating a global positioning for the port of Santos needed to resolve several pillars of disconnection: communication and service, global protagonism, and international business.
The pillars needed to tackle the main challenge: information asymmetry. There is information about the Port that is only in Santos, others that reach São Paulo, others in Brasília, and what overcomes the continental barriers of our Brazil is the tip of the iceberg. Often in the form of noise, when in reality we are a thriving, competitive port, which must act side by side with the largest ports in the world and be remembered as such: a global player.
Communication and service
To break communication barriers, it was necessary to produce more material in English. In partnership with the communication and technology team, the first version of SPA's English website was made with simple and objective content for the international public. A factsheet was created consolidating in 1 page, an overview of the port with data in English and Spanish. The presentation to international investors about the Port indicated the upcoming lease opportunities so that they can plan to invest and monitor the status of the PPI (Partnership and Investment Program) bids. Communication aimed at long-term goals: privatization. Attractiveness, predictability, and risk reduction are keywords for international infrastructure investors.
Communication materials were used to serve the international public. A clear communication channel was created with Embassies, Consulates, Chambers of Commerce, Representatives of International Ports in Brazil, government agencies, and international organizations. The purpose of this stakeholder network allowed the connection with an international audience to those of interest in Santos. This work of international articulation was essential to update some photos of the past and establish a positive image for the future. The reception of 1 international delegation per week on a new itinerary for national and international visitors made a good impression. Every detail makes a difference.
How to connect SPA to the major international networks of ports around the world? The survey pointed to 5 organizations: International Association of Ports and Harbors (IAPH), American Association of Port Authorities (AAPA), The Worldwide Network of Port Cities (AIVP), The World Association for Waterborne Transport Infrastructure (PIANC), and International Harbor Masters Association (IHMA). Of the 5 organizations, SPA became a member of the first two (IAPH and AAPA) with active participation from employees in events, forums, and news submissions contributing to the team being exposed to high-quality specialized connections and helping in the creation of a global mindset.
The international missions agenda was also intense until the beginning of the pandemic. The exposure of employees to international events allowed new contacts to be made for investments, technology, and infrastructure. The 2020 calendar provided for SPA to participate in at least 1 international event per month in the various strategic agendas in technology, business, infrastructure, and operations. Due to the pandemic, the last missions were carried out in early March 2020 (2 only this year). The remainder of the 2020 schedule has been pushed back to 2021 and something should follow on the SPA calendar.
To consolidate SPA's global protagonism, Santos was approved by the AAPA to host the XXX Latin American Congress of Ports. The event takes place in 2022 and should consolidate the brand's global positioning, right before privatization.
“Who is already here? And who is not here and who should be?" To answer these questions, an international market survey was carried out to map potential investors in all stages of the Porto chain. Remember, the scan here was global. We have mapped more than 20 internationally owned terminals, national and international service providers, shipowners, carriers, investors in integrated logistics solutions present in Santos, but many are not. Global competitiveness raises the quality of services provided and allows for the strengthening of the chain as a whole.
In order to bring international visibility for investment opportunities in the Port, individual prospecting work was carried out with international investors and enabled the port of Santos to be positioned as an attractive asset. Now each company follows its strategy and studies the best way to enter. The next step would be to work consistently on privatization.
Answering the question in the title of the article, being an international port is much more than moving cargo to various ports around the world. It means exercising all your power to project it and thus catalyze more business and cooperation opportunities. It is to bring to Santos the best practices in the world and collaborate to build new global standards for the sector.
In this article, I recounted my experience as SPA's first head of international affairs. The Port of Santos is larger than the Port Authority and for the internationalization process to be truly successful, a movement must continue with the active performance of local companies for the international projection of the brand.
Santos has everything to be recognized by the world as a global player. This requires consistency and dedication. The first steps have been taken. I am thankful for having had the opportunity to start the internationalization of the largest port in Latin America. May the lighthouse access remain so that the world can sail to Santos and know that not only cargo is found here, but the Ports market and people as well.
Sterna is the first Internationalization Boutique in Brazil. We can help you open your company abroad. Shall we have coffee? firstname.lastname@example.org