Tales Of Bolivarian Inefficiency IV: Puerto Cabello’s Bermuda-like Triangle

May 3, 2014

One of the nice things about having faithful readers, is that I sort of get copies of videos, documents and papers (like this one) making sure that I seldom miss important stuff. Sure I get stuff twice or even more times, but it is an incredible source of information, so thank you all. Once in a while, readers write to tell me stories, many of which I would not know about in detail if it were not for them. Sometimes, these become a post. This is one of them.

Chavismo thinks that it can hide incompetence and inefficiency. But modern tools are pretty incredible. Chavismo also seems to believe that it can do anything, run any enterprise. Their infinite belief in the power of the State and their own ability is simply scary. Take imports. In its war against the private sector Chávez began importing stuff from all over, just to bypass the local private sector. In his mind, if there is no toilet paper, or corn, or wheat, it is just a matter of importing the stuff and magically, it will show up in the shelves of local stores.

Except in reality, the path is an extreme adventure in inefficiency. It starts with how much is paid for the stuff, as there are bribes and commissions at each step. Then, there is the problem of what to bring. Some bureaucrat in Caracas decides to import paper towels and corn and, in a few weeks, people are using the towels in lieu of toilet paper and making corn bread because there is no wheat.

Except that it is not even that easy, because to get stuff from say, Brazil, to the Venezuelan consumer, the stuff has to go through the Puerto Cabello Bermuda-like triangle, where ships don’t disappera, but they do get lost for a while:

Bolipuertos

You see the port responds to the whims of Chavismo, as it is run by Bolipuertos, which is 49% owned by Asport, the Cuban port authority. This is not an easy fact to dig out, as they try to hide it deep in the webpages, but go to slide 22 of this page, and it is clearly spelled out.

This means that if it is May Day, like yesterday, many of the dock workers are bussed to Caracas to participate in the Maduro march. That means tough traffic to get in and out of the port, little unloading and almost no cargo going in or out.

But Puerto Cabello is like a Bermuda triangle, where ships get lost in time, as they arrive, spend weeks and months waiting and then too much time unloading. And time, my friends, means cost and money for everyone involved.

What my friend and reader taught  me (let’s call him DD) is that in the maritime world you can’t hide. Each ship carries  an AIS (Automatic Identification System) which is sort like the black box that airplanes have, allowing all ships to be tracked. There are websites like this one or this one, where you can follow each step of what is going on. I actually subscribed to the first one for a while ,so I could go back 60 days and follow the ships. In fact, you can even add alerts to keep track of ships.

This, for example, is an overview of the part of the Caribbean where Puerto Cabello is from the first site I linked to:

marinetraffic1

The first thing you note is how much movement and density of ships there is near Aruba and Curacao (Ships moving look like little arrows, rather than diamonds, which are vessels that are not moving), while around Venezuela everything is so static. (If you go to the webpage, you can even tell how fast the ship is moving by putting your mouse on it). Obviously, comparing the size of the three economies, you would expect much more movement and density around Puerto Cabello. But such are the ways of the revolution…

In fact, you can zoom in and see how little movement there is inside the port itself  (Colors are what type of ship it is, tanker, (red), cargo (green), passenger (blue), etc.):

marinetraffic2

You can dig even deeper, blowing up the port to the level of street detail, if you know the port, then you know where the grain elevators are, for example. Thus, if you know your stuff, you can tell what type of ship is at each spot, even if the system tells you most of the time.

Here is a detailed picture of  what was going on in Puerto Cabello, yesterday May 2nd. 2015:

Maritime3

In fact, you can click on any of the ships and you can get all sorts of information on each ship. For example, if you click on the second green ship below the point in the middle, you get this window:

ship

Note that you can check out the vessel’s track, history, itinerary. And in vessel details you can get even more pictures and find out this ship came from Norfolk Virginia, for example. If you are subscribed, then you can see when it arrived in Puerto Cabello, when it went to port and the like.

And here is where you find that Puerto Cabello has become almost like the Bermuda triangle: Companies send ships in, but they never know when they will come back. First, they arrive at port and have to wait for weeks, sometimes months, to get into the port to unload the cargo. As an example, last November, the 27th. to be exact, the M/V UBC Toronto left New Orleans loaded with corn. The trip takes about 8 days. Thus, it should have arrived in Puerto Cabello  around December 8th., the 9th., at most.

Well, on February 24th. this ship was still sitting in the same spot outside Puerto Cabello, waiting to be unloaded. We are talking more than seventy days later! It finally left Venezuela at the end of March (I did not follow its course and my subscription expired!), arriving back in the States on April 9th. that is a four month trip, for something that should only take three weeks, two traveling and one unloading.

This not only costs money, days inside the port cost on average US$ 15,000 per day, but think about it, this ship was loaded with corn at a time that Venezuelans are experiences shortages in Harina Pan to make their arepas!

Chavista management is clearly an oxymoron…

There was another ship, which arrived right before last Christmas, which was unable to go into port to unload until after two weeks anchored at sea. Well, this ship was still in Puerto Cabello unloading at the end of February, more than 8 weeks later. And it did not leave until the first week in March, which means that at $16,000 per day for roughly 60 days, the trip cost an additional US$ 960,000 for the trip.

Guess who pays for this?

So add it all up. In most of the world, workers unload, on average, about 5,000 Tons per day, from a vessel with peak rates of about 10,000 Tons in very efficient operations. In Venezuela, with luck, you may get to 1,000 Tons per day, but rates can be about half that much. This adds costs from US$ 10,000 per day, all the way up to US$ 20,000 per day, for up to two or three months. Given that a shipment may be worth US$ 10 to 12 million, this becomes a very expensive proposition. (Not to mention graft, overprice, commissions and the like)

Add it all up. This is the cost of the ports being under the inefficient Chavista management, under the advise of Cuban consultants, which not only charge for it, but turn out to own 49% of the company running the ports (They probably paid nothing for it). And, of course, being in charge of the port is juicy business, with Generals or whatever their rank may be, fighting for the top spot regularly (Last year, the port had four different Heads, with each new one requiring to learn the job from scratch, They probably never did, except to learn at which step you could charge something)

There are many other stories surrounding this. DD told me how a ship used in the oil business, costs about US$ 400,000 per day rental, US$ 230,000 if not in use. Just bringing it to Venezuela, if it is in Europe, for example, costs about US$ 2 million. Well, one such ship was brought to Venezuela last year from Europe. By the end of March it was still there, sitting around, doing nothing.

Chavista inefficiency at its best!

Meanwhile, maritime operators tremble at the thought of having to send a vessel to Puerto Cabello. It is the Bermuda triangle backwards. Your ship always disappears when it goes into the area, you just don’t know when it will reappear!

And these guys think hey can keep doing this!

(Thanks to DD for the tip and the info)

 

40 Responses to “Tales Of Bolivarian Inefficiency IV: Puerto Cabello’s Bermuda-like Triangle”

  1. dyingearth Says:

    Hum, why would any sane company do business with Chasimo entity if their asset is going to be indefinitely detained? Nevermind how promptly the bills are being paid.

    • Super Says:

      I’d assume that the LOCs being asked for are for a big multiple of the deal in question. By now this should be old news for all the shipping, freight forwarding companies. I am no longer in the trade, but you can be sure that the rates have gone up enormously to cover these delays.

  2. Dr. Faustus Says:

    Wow! One of your best posts,….ever.

  3. Rafael Vicente. Says:

    Diablo, today I read the articles that had not read, but as the saying goes, thought wrong and be right, what else we could have, these Cubans are spatialist in stews, with 49% of the shares without putting a penny, tremendous business slow the discharge, so that the owners of the charges cancel delays, ending csotando quee more merchandise, and the Cuban charging for services rendered, without investing a penny.

  4. Charlie Says:

    The last couple of weeks various kinds of Christmas chocolates and candies have arrived at stores. Must be some of those items that had been lost in the triangle. Why would anyone want to buy six month old chocolate …… while paying full price¿

  5. Steven/Setty Says:

    Sir, great post, but fyi in the future note that you can get ship location data on your Bloomberg without subscribing to a service. You can also set up auto alerts to know when ships move. It’s also handy for tracking drill ships.

  6. Lecherous Drunk Says:

    Around November of last year, I developed a great curiosity regarding Venezuela. I reside in a Central American country that seems more rational than Venezuela. Until then, the idiocies that came out of Venezuela in the news were occasional. Since November, the speed and information of ridiculous government diktats has been shocking. I began to read Dolar Today and El Universal with regularity and more recently came across this website. Since November, the irrationality of the government has increased by a magnitude, as the money has run out. They are in debt out their ears and existing on cash flow.

    Regarding PDVSA and shipping, I do not know if this has been reported in Venezuela. PDVSA ordered 42 tankers (capesize, I believe). The goal appeared to be, to own the tankers and not rent the ones that deliver the crude to China. It appears that many of these tankers have been built, but final payment has not been made. Now they languish in shipyards throughout the world.

    http://www.scmp.com/business/commodities/article/1323073/missing-boats

    It would be interesting if a Venezela newsource can poke around this.

  7. HalfEmpty Says:

    From the website mentioned in the 1st paragraph. (Google Translation)

    Percentage of Operating Capacity: 60% capacity deficiency wear and equipment.

    Credit where due, pretty honest at least, or is worse?

  8. Luis Navarro Says:

    First time reading and will definitely subscribe.

    I really enjoyed reading your article that once again proved the inefficiency of the Bolivarian regime that all Venezuelan’s institutions are submerged under–no pun intended. And this, reenforced my point of view on their willingness to destroy a once-economically-developed country for the sake of their reBolution. But what really grind my gears is the fact that the bolipuerto works like a charm when the time comes to bring in riot control vehicles and weaponry.

  9. Kepler Says:

    As a Valenciano whose ancestors have mostly lived in the Valencia-Puerto Cabello region for many centuries, if not millennia, I hereby give upon you
    the order of Borburata.

    Inspired by this article I just created a new page in Wikipedia for the harbor

    Here you have it:

    https://es.wikipedia.org/wiki/Puerto_de_Puerto_Cabello

    I will be adding much more information there, including more data on the PDVAL case (for which I had also created an article in Wikipedia Spanish and German…it would be nice if someone created a version in English).

  10. Ira Says:

    The only thing I can figure is that the drugs going OUT more than cover these additional expenses.

  11. concerned Says:

    I don’t remember the exact details, but I am sure some readers do of one of several revolutionary ideas to import in ships full of pregnant cows to help restore the beef production. Where the deal was made to charge double the normal price for the ship full of cows. Ship was intentionally only partially loaded and intentionally capsized in route to cover the fact. Carcases washed up on the beaches for weeks. Everyone involved benefited except el pueblo and the cows. Truly revolutionary.

  12. george Says:

    i have imported a number of containers over the years. now as you say, many companies are not coming to venezuela because they lose to much time which translates to money. one of my containers arrived at the port(la guaira) on the 22 of the month but couldnt dock until the 20 of the next month so they went to columbia to unload that cargo while waiting their port space in venezuela. so if they unload your container in columbia to reach the columbian contianers they have to put yours back on the ship so guess what? you pay for loading and unloading and possibly storage in columbia while waiting to be unloaded in venezuela.
    the whole system is designed for corruption, and they know it. dont want to pay? no problem, they wont sign one page of 45 pages to release your contianer, then you pay for storage, penalties to container company and you will eventually end of paying them anyhow.

    • Kepler Says:

      Why should they unload the stuff in Columbia? Wouldn’t it make more sense to unload it in Guyana or in Colombia? Colombia would do but Columbia? That’s too far!

      • george Says:

        not sure unless they had no cargo for guyana. they didnt want to wait for port space so they went and unloaded their columiban containers. i know some buisnessmen who are now shipping their containers to columbia and then bring them to venezuela over land. much less hassle and faster

        • syd Says:

          OK, George. Evidently you did not get Kepler’s memo. The name of the country is not Columbia, as in the District of Columbia or British Columbia. Nor is the adjective columiban. Rather, the country to which you refer is COLOMBIA. And containers from that country are Colombian containers.

          • george Says:

            i get it now, sorry. I misspelled containers also so five more lashes for me. please forgive me errors for I am weak . sorry that the misspelling made the paragraph unreadable and unintelligible. I will try and do better next time, if you will give me another chance.

            • firepigette Says:

              Ha ha….

              George,

              Let us not forget to punish those who say Los Estados Unidos instead of The United States. LOL!!!!!!!

              Columbia is a natural ” mistake” because in English it means “Land of Columbus.”

              And while we are at it…let’s also get hysterical and utterly stupid and say:

              ‘Colombia is not the only country discovered by Columbus!’

              It’s just plane ignorance to think so.

              You have nothing to apologize for.

            • Charlie Says:

              firepigette, that should be plain and not “plane” :-)

            • syd Says:

              remarkable isn’t it, Charlie? Give ‘em enough rope …. lol

  13. Kepler Says:

    Miguel,
    In the articles I read to create the Wikipedia article I saw there were on average some 30 ships waiting around Puerto Cabello to unload.

    This might also have to do with the fact there are lots of state employees who are nothing but enchufados…and, of course, the Cubans and the military mafia.

  14. Roy Says:

    Should be easy enough to check the quote of one standard 40′ container quoted from Miami to Puerto Cabello vs. Cartagena. Anyone want to guess the multiple of cost? I am guessing three times more expensive. Anyone have easy access to check?

  15. nacazo Says:

    Oops. Better check to Barranquilla. To Cartagena is mostly cruises not container ships. (Forgot this is an English blog).

    • Roy Says:

      Agree, Barranquilla. Anyone?

      Someone here must work for a company with a logistics department…

      • Dean A Nash Says:

        By my reckoning is 50% more expensive in terms of cash outlay, and considering that Barranquilla is an additional day farther away from Miami (4 days versus 5 days), the actual difference is even greater.

        Miami to Barranquilla: $3250.00/40’STD/HC – all inclusive Door to Port
        (Weekly service with a transit time of 5 days.)

        Miami to Puerto Cabello: $4960.00/40’STD/HC – all inclusive Door to Port
        (Weekly service with a transit time of 4 days.)

  16. Alex Says:

    My blood is boiling after I read that the cubans are partners in Bolipuertos and the evidence is right there, on a powerpoint presentation, like there’s no shame to it. F’kin amazing. Who besides someone with very dark interests gives a country’s assets away like that?

    • Roy Says:

      That is peanuts compared to allowing a foreign country (Cuba) control of Venezuela’s security databases and to infiltrate its military and security apparatus. Now THAT should REALLY make your blood boil.

    • Jon Says:

      Those of a weak disposition are always at the mercy of someone. Venezuelan men seem to fill that role admirably. All spoiled by their mothers is the impression I got.
      I was often surprised that Venezuelan women did not play a more prominent role. Most of the common sense I heard came from them, regardless of colour or wealth. At the meetings I used to attend, lets say at rural locations, the man would enter, normally well polar’d, throw chairs in the air and spout absolute victim crap. And then a woman would speak and allow us to move forward. Meanwhile Señor Polar would be face down in the gutter, open sewer normally.
      When I look at the photographs of the demonstrations or the guarimbas I see a number of young women at the front. Active and playing their part. In other countries that would be less obvious.
      As they say in English “you can only piss with the cock you’ve got” and in response to that Venezuelan women have been short changed.

  17. El Brujo Says:

    You make em?

  18. myladydha Says:

    I´m in shock

  19. Bill S. Says:

    Interesting Reuters article about missing money in Venezuela, by Brian Ellsworth, on May 6.
    Special Report: Billions unaccounted for in Venezuela’s communal giveaway plan.

  20. geronl Says:

    This article is amazing. It shows how corrupt, incompetent and backward everything in Venezuela is.


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