Cargo volume and passenger traffic decreased due to economic recession
Puerto Rico’s two major air and sea ports’ cargo traffic decreased 3% and 2% respectively in Fiscal 2007, indicators of an economy in recession. Passenger traffic at Luis Muñoz Marín International Airport (LMM) decreased 2%, while cruise ship business increased 2%. The Puerto Rico Ports Authority (PRPA) has begun implementation of a long-term $2 billion expansion and improvement plan for Puerto Rico’s airports and harbors. Ports Authority plans call for closing the Fajardo and Humacao airports as facilities in Aguadilla and Ceiba are redeveloped. Also progressing are the LMM expansion and the revamping of the Port of San Juan.
Overview
Transportation infrastructure in Puerto Rico includes a sophisticated network of airports, seaports and highways managed and maintained by the Puerto Rico Department of Transportation & Public Works and various public corporations. These include the PRPA, Highway and Transportation Authority, Traffic Safety Commission, Maritime Transportation Authority, Metropolitan Bus Authority and the new Urban Train.
Maritime Transportation
The Port of San Juan, otherwise known as Puerto Nuevo, is the leading commercial port in Puerto Rico and the busiest and largest commercial harbor in the Caribbean. According to American Association of Ports Authority figures, Puerto Nuevo is ranked 11th in the U.S.—behind Charleston, SC—in terms of container cargo movement. In Fiscal 2006, more than 9.6 million short tons of cargo moved through the port compared with 9.8 million short tons the previous fiscal year, a 2% decrease. These numbers include inbound, outbound and transhipment domestic and foreign traffic.
The Port of San Juan continues to go through a major reorganization. Representatives from the shipping industry that operate and manage cargo in San Juan harbor signed an agreement with the PRPA allowing for the redistribution of land surrounding the port.
The redistribution program is part of the master plan for the redevelopment of Puerto Nuevo. The agreement—the culmination of nearly 10 years of negotiations—was endorsed by Luis A. Ayala Colón (LAC), International Shipping Agency (Intership), Island Stevedoring, Horizon Lines of Puerto Rico Inc., Sea Star Line and Trailer Bridge Inc. The terms call for initial 10-year contract periods with options for two extensions of five years each.
The land redistribution program is a central aspect of the PRPA’s legal charter, which establishes that ports facilities should be operated efficiently while maximizing the use of installations, providing for sustained and future development of the authority’s properties.
Part of the redistribution program involves connecting some of the back lots behind the harbor directly with the piers, eliminating access roads and thereby creating additional space to manage cargo and container operations.
The land lots in question add additional space for operations and revitalize approximately 50 acres that are used for non-marine activities. The Puerto Nuevo zone, which is principally dedicated to container cargo shipments, consists of approximately 320 acres.
The reorganization plans for the port will also tie in with plans for the San Juan Waterfront project, which includes commercial and retail space as well as residential and hospitality developments. The project is being developed by the Convention Center District Authority.
The shipping industry has been adversely affected since 9/11 due to rising operational costs as it works to comply with heightened security regulations. This, in turn, has been a catalyst for mandatory industry transformation. According to a report from Puerto Rico to the U.S. Department of Homeland Security (DHS), between 2003 and 2006 the island has been granted $78.3 million for public security.
Federal grants are also designed to help the government and carriers comply with technology-based initiatives such as the Shipper’s Export Declaration (SED), part of the U.S. Customs & Border Protection’s Automated Export System, that now must be submitted before departure. However, the amount of federal grants has fallen short, forcing most private maritime entities to absorb the high cost of increased security and mandated automation.
The industry continues maintaining its facilities and investing in new state-of-the-art equipment that will enhance security measures.
Ferry transportation
The Ports Authority has been implementing a master plan to improve the efficiency of maritime transportation services from Puerto Rico to the offshore islands of Vieques and Culebra as demand for transportation among these destinations continues to rise. Most visitors using the ferry system are residents of Vieques and Culebra seeking public and private services on the mainland as well as tourists staying at the islands’ resorts and small guesthouses.
The PRPA operates 10 ferries, including four passenger and cargo ferries and an additional six passenger-only ferries. In 2006, the PRPA invested approximately $6 million to buy a new 500-passenger ferry with delivery projected for late 2007 or early 2008. The PRPA will spend more than $1 million to purchase new motors, transmissions, generating plants and replacement parts for the ferries.
The PRPA is also working on improving its preventive maintenance system for the ferry service and compliance with all U.S. Coast Guard security measures. The agency is in the process of implementing online e-ticket purchases for transport among the islands in an effort to eliminate long lines and guarantee space for passengers using the public ferries.
Air transportation
Luis Muñoz Marín International Airport (LMM) is the largest and busiest international airport in Puerto Rico and the Caribbean. Total cargo transported via LMM in calendar year 2006 was 541 million pounds, down 1.96% from 551.8 million pounds the previous year. An additional 263.8 million pounds of cargo went through seven of the island’s regional airports, a 3.7% decrease over the previous year’s 254.2 million pounds. Aguadilla’s Rafael Hernández International Airport (RHA) alone moved 249.3 million pounds in 2006
Nearly 40 domestic and international airlines fly into LMM resulting in more than 9,000 inbound and outbound flights. Passenger traffic at LMM was more than 10.5 million passengers during calendar year 2006, a drop from 10.7 million passengers the previous year. Puerto Rico’s regional airports reported a 14.2% increase in passenger movement, from 882,431 passengers in Fiscal 2005 to 1,008,104 passengers in Fiscal 2006.
The Federal Aviation Administration (FAA) approved a master plan to redevelop the Rafael Hernández Airport in Aguadilla that will involve an investment of $1 billion over the next 20 years. PRPA plans call for the redevelopment of the Aguadilla airport on a scale that will rival LMM.
The Aguadilla airport currently has two commercial passenger gates. The master plan calls for a total of 30 commercial passenger gates, 12 shy of the 42 commercial passenger gates that currently exist at LMM. In 2006, passenger movement at RHA reached 356,145, up from 253,730 the previous year, a 40% increase.
In addition to a sizable increase in passenger gates, the plan also calls for developing a major air cargo area plus a section that will be developed for value-added cargo products (for distribution and on-site completion of manufactured goods) that by the nature of the cargo or price support need to be near a runway and have access to air, rather than maritime, transportation. It will also include a section for general aviation. The plans call for gradual growth as volume increases.
The same master plan concept that is being used for Aguadilla will be used for the redevelopment of the airport at the former Roosevelt Roads Naval Station, which the government refers to as The Portal of the Future. According to PRPA Executive Director Fernando Bonilla, a master plan has been presented to the FAA.
Ceiba’s long runway will encourage passenger airline carriers that prefer to operate out of a secondary airport location to establish operations there. Fajardo’s airport does not have sufficient runway length for larger jets to take off and land while Ceiba, on the other hand, has a runway length just 200 feet shy of RHA’s, and is sufficient for any type of aircraft. According to Bonilla of PRPA, Ceiba will “swallow all activity” at the Fajardo and Humacao airports. He foresees the Fajardo airport closing on the same day Ceiba’s opens while Humacao’s airport will follow shortly thereafter.
LMM airport is currently undergoing capital improvements valued at $237 million, which include a new passenger terminal that should be completed in 2008. To free up physical space as well as airspace at LMM for commercial passenger aviation, the PRPA will incentivize the movement of all or most of cargo traffic from Carolina to Ceiba and Aguadilla.
Contrary to earlier proposals that would have seen its closure, the Isla Grande airport will remain in place and serve as an important alternative for general aviation and business jet traffic.
According to the PRPA executive director, the strongest argument in favor of keeping Isla Grande open is to avoid having all that general aviation (i.e. small and/or private aircraft operators) operating out of LMM so the latter can be fully dedicated to large commercial aviation.
The airports in Culebra and Vieques will remain and be improved. Improvements have been made to the Vieques airport to allow the Transportation Safety Administration (TSA) to operate from there. This will allow passengers to register their tickets and baggage direct to any part of the world from Vieques. In the past, passengers checking in at Vieques have had to claim their bags at LMM and check in again for the next destination. This improvement will cut at least two hours off processing time.
Although the PRPA was also planning to eventually close the Mayagüez airport, the municipality, which would maintain and manage the airport, wants to keep it open. Meanwhile, Ponce’s Mercedita Airport will continue to be an important regional airport. Three direct flights from Mercedita to the U.S. mainland have recently been established.
Road transportation
Puerto Rico has approximately 7,384.6 kilometers (km) of Commonwealth-system roads, 258.5 km. of highways, 190.2 km. of expressways and 17,046.7 km. of municipal roads.
Major toll highways are the Luis A. Ferré Expressway (PR-52), De Diego Expressway (PR-22) and Martínez Nadal Expressway (PR-20).
There are more than 2.5 million vehicles registered with the Puerto Rico Department of Transportation and Public Works. An average of more than 100,000 new and used vehicles are transported into Puerto Rico annually and sold. With more than 30,000 truck drivers operating on the island, some of the major trucking businesses include the Truck Drivers Cooperative (Camioneros Cooperativa de Transporte de Cargo), Compañía Ponceña de Transporte Inc., Transporte Collazo Rivera Inc., Equipos de Borinquen, HRT Trucking and Fraticelli Trucking Co.
With an average 2.5 vehicles per household, Puerto Rico roadways accommodate one of the highest ratios of automobiles per capita in the world. Under normal economic conditions, approximately 10,000 new vehicles arrive on the island each month. However, only a fraction is retired from the road on an annual basis. The economic recession has influenced a significant reduction in the import of new vehicles from the mainland U.S.
To mitigate traffic congestion in the metropolitan area the government has built the first stage of a rail transit system, the most expensive and complex infrastructure project in Puerto Rico’s history. Construction of the Urban Train, or Integrated Transportation Alternative (ATI by its Spanish acronym), began in 1996. The first phase is running from Bayamón to Santurce while a second phase is expected to extend the system from Río Piedras to Carolina.
