Jamaica’s Logistics Hub Initiative in Line with Leading Global Hubs

The Government’s logistics hub initiative will be a global asset of the scale and significance of the world’s other leading hubs in Rotterdam, Singapore, and Dubai.

At a meeting with government communicators at Jamaica House on Thursday, March 28, Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, emphasized that the hub will have far-reaching economic benefits beyond basic transshipment activities.

Mr. Hylton pointed out that the hub will allow the country to take full economic advantage of the opportunities presented by the widening of the Panama canal by 2015, and that the project is supported by Jamaica’s development partners, including the International Monetary Fund and the World Bank, as well as global investors.

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He explained that historically, major trading occurred between Europe and North America, but in recent times, with the coming of the World Trade Organisation, there have been significant changes in global trade.

This, he said, has brought about a shift in the trade corridors, so that this space no longer lies simply between Europe and North America. There has been a major shift to South East Asia, in particular.

“That corridor shift will benefit Jamaica significantly…more directly related to the Panama Canal,” he remarked, noting that with the focus on larger aircrafts and ships, there has been increased need for fewer stops.

“It benefits us, because the canal now carries Panamax vessels. With the expansion, those vessels will be increased by about three times the size of the existing vessels. What that means is that countries like China (and) Japan, wanting to get their goods to market, will see that coming through the Panama Canal is the preferred route,” he outlined.

This will cut trade routes by up to 6,000 miles. He noted that although the United States and Canada are still very strong trading markets, even more attractive to China and other traders in South East Asia, is Central and South America, which have been the fastest growing markets over the past decade.

This benefits Jamaica, which is directly North of the Panama Canal, an ideal geographical position.

“We seek through this logistics hub, to recognize those shifts in global trade…to recognize the opportunities that is presented to Jamaica, because Jamaica would be the first and nearest country out of the Panama Canal,” he asserted.

The Minister pointed out that Jamaica also has other advantages, as it has a comparative edge over any other country in the Caribbean Basin, because vessels can travel in any one of four routes – through the gulf of Mexico; through the Panama Canal; North East (to Europe); or via South America.

“Those are key advantages. No other country in the region has that four-way advantage,” he stated.

He added that even more beneficial is the fact that some of the deepest harbours in the hemisphere lie on Jamaica’s South Coast.

The Minister said Jamaica needs to, and is well on its way to accomplish a number of targets or sub-projects in order to qualify itself as the world’s fourth major hub. A major one of these is a deeper harbour that can accommodate the new Panamax vessels, which will pass through the canal. Panamax is the term for the size limits for vessels travelling through the Panama Canal.

Jamaica happens to have one of the deepest ports in the world, at Cow Bay, Yallahs, St. Thomas.

“That 51-metre depth is attractive to the biggest of the vessels, and the idea is to build a commodity port that can take bulk storage. That gives Jamaica a range of activities – from containerized shipment to commodity. That is the entire gamut of global trade, which will put us in an advantageous position,” he told the communications officers.

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Furthermore, he explained, there are also opportunities in dry docking also called vessel maintenance. Under International Maritime Organisation (IMO) rules, these vessels must be maintained at prescribed intervals.

“At the moment there is no repair station in the Caribbean. Jamaica, recognizing that, is putting itself in a position to be able to provide dry docking facilities…The country therefore becomes an attractive hub for ship owners,” he noted.

However, the Minister said it is shippers who greatly influence where vessels go. This is where the logistics centre at the Caymanas Economic Zone, which is being developed in St. Catherine, will come in.

“That is important, because while we get some money from the containers just passing back and forth, the bigger money is to be made when those containers leave the port and come into Jamaica with the contents to add value to the economy. That’s what will create a lot of jobs and add and extract more value for us. So, what we intend to do is to provide full service for shippers,” he said.

For example, Minister Hylton noted, even a seemingly simple activity such as changing labels becomes an important, income-generating enterprise in this scenario.

“In this region we have several languages…so to get it to a station where you can switch labels before it goes into the market – that whole exercise is big money,” he said.

There will therefore be a range of activities and spin-offs from the hub, which require labour of various skill levels.

Turning to opportunities in the aviation industry, the Minister pointed out that the Vernamfield aerodrome in St. Clarendon will become very important, as the two existing major airports will not be able to take the largest of the cargo aircrafts.

“Vernamfield has the capacity to take the largest of the aircrafts, and that will give Jamaica the capacity to move some goods that are more sensitive from long distances – China or anywhere else in the Far East – to the hub in Jamaica,” he explained.

Transporting cargo by air will shorten the journey, with the option to switch from air to maritime transportation.

“This configuration becomes much more attractive,” the Minister argued.

He said Jamaica will be the link, in this hemisphere, to the ports of Rotterdam in Europe, Dubai in the Middle East, and Singapore in the South East, adding that there is a need and demand in the global trading system for a fourth hub.

“It improves the global trading system by having a relay, and ensuring that the biggest vessel supporting global trade are able to move from one region of the world to the next, and that’s where we find ourselves, and we have to take advantage of it, because if we don’t, others will,” the Minister stressed.

He said a project of this global magnitude demands that everyone is on board and at least understand the importance of the hub, how it will operate, and the economic benefits.

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To this end, the Ministry has carried out a series of islandwide public consultations to sensitise citizens about the Government’s plans for the logistics hub initiative.

In the meantime, the government is putting in place measures to shore up the type of labour force which will be needed for the over 10,000 jobs that will be generated by the development.

The Logistics Task Force has secured broad-scale representation on its Human Resource Working Group from stakeholders in the Ministry of Education as well as secondary, tertiary and vocational institutions. The Working Group is headed by the Caribbean Maritime Institute Executive Director, Dr. Fritz Pinnock.

The development of the hub is estimated to cost some US$8 billion.

By Alphea Saunders, JIS Reporter