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JAMAICA\\\


Issue 6 2018 - FBJNA


23


Caribbean gem for global shipping


By Karen E. Thuermer


Competition among the Caribbean’s major transshipment ports has heightened since the Panama Canal was expanded. With larger ships transiting the Canal, locations like Jamaica are seeking to build on transshipment cargos and cement a larger position for global trade. “Jamaica, in particular, is well


placed geographically for global trade,” emphasized Grantley Stephenson, CEO of Kingston Wharves Limited (KWL) during


management of automobiles and accessories. Other developments


evolving at KWL include 1,655 meters of continuous quay, 9 deepwater berths, a vessel draſt of 9 to 13 meters, 172 reefer plugs, 2,694,000 sq. ſt. of on-dock open storage, a 522,720 sq. ſt. on-dock transshipment car park, 180,000 sq. ſt. of on-dock warehouse storage, and 215,000 sq. ſt. of off- dock storage at Kingston Wharves Terminal.


“We want Kingston to be a major transshipment hub for reefer containers.” -- Simon Farhat, KFTL


the Jamaica Investment Forum held in June in Montego Bay. For one, Jamaica benefiting


from new commercial ventures and seeks to position itself as a fourth node in global logistics next to Rotterdam, Dubai and Singapore. for


logistics


“It offers a gateway and geo-strategic


advantages to access 800 million consumers,” Stephenson said. “Jamaica has inbound and outbound connections to more than 30 ports around the world. Over 60% of transshipments coming through Jamaica go to Europe and the United States. Therefore,


the potential is


tremendous.” Projections call for Jamaica to


realize US $15.5 trillion in exports by 2023. KWL has spent billions of


dollars preparing for this activity. It recently opened two logistics centers: a 160,000 sq. ſt. total logistics facility in the KWL Free Zone and a 784,080 sq. ſt. global auto logistics center for the


duty-free and tax-free low cost environment. “It


contributes to Jamaica’s


ambition to develop from a global transshipment hub to a global logistics hub,” said Gordon Shirley, the port authority’s president and CEO.


Port of Kingston


Port of Kingston is already being transformed largely because of the expansion of the Kingston Container Terminal (KCT), which is being undertaken by Kingston Freeport Terminal Ltd (KFTL), a Jamaican consortium formed by French global terminals operator CMA CGM and its majority-owned subsidiary Terminal Link. In July 2016, KFTL was granted a 30-year concession by the government to operate KCT. Consequently, it is being developed to efficiently accommodate New Panamx vessels that can carry up to 14,000 TEUs.


CMA CGM and ZIM utilize the


Feeding all of this is a Special Economic Zone


(SEZ) regime


that the Jamaican government instituted in 2016 to bring Jamaica into compliance with the World Trade Organization (WTO) Agreement on Export Subsidies and Countervailing Measures. The Port Authority of Jamaica


is developing a network of SEZs for landside near-port logistics operations. One, which is slated to open is August adjacent to the Port of Kingston, is the Kingston Logistics Park, which will provide logistics and value-added/ light industrial activities in a


port as their major hub in the region and, consequently, bring in the bulk of the terminal’s volume. As these lines deploy larger vessels, KCT, as other hubs, will need to be able to absorb larger volumes. Simon Farhat, KFTL chief


operating officer, explained during a recent port


tour that


the terminal has ample room for growth. “The port not only benefits from its geographic position from which steamship lines offer direct calls to Europe, North America and the Far East; both CMA CGM and ZIM offer direct calls to/from Kingston to Ningbo, Singapore, New York, Rotterdam, Le Havre or Marseilles,” Farhat said. Gaby Sharf, managing director of ZIM Carib Star Shipping,


“Jamaica, in particular, is well placed geographically for global trade.” -- Grantley Stephenson, KWL


explained in The Business Year that the Caribbean is in the center of ZIM’s network, making Kingston the second-largest hub for the company. “We focus mainly on the east-west trade that comes from the Middle East and Asia and goes toward the east coast of the US, the Caribbean, South America, and the US Gulf. Ships from the Panama Canal go to the main market, mainly to Miami, Savannah, Norfolk, New York, and Halifax. Kingston is right by the main shipping lines and has deep waters that allow fully loaded ships to enter the country.” ZIM is hoping to facilitate a


more strategic positioning of Jamaica as a logistics hub and has established a logistics company called Kingston Logistics Center. Sharf stated, however, that customs fees remain a problem and hinder business. The current Jamaican government, however, is addressing this issue. While KCT operates as a


leading transshipment hub for


the Americas, 50% of its


business is with China. Cargo comes from China to Kingston for transshipment for North and South America and Europe; empty containers return to China. So far, KFTL has spent US$400


million on improvements at KCT. Notably, the South Terminal has been extended by 1,300 meters; West Terminal by 600 meters. The harbor continues to be dredged. Berthing capacity has been expanded, creating a 600 foot berth as well as two new 300-foot berths that can facilitate multiple post-Panamax vessels. “We have developed the yard


and improved shipping depths,” reports Farhat. Today the channel is a depth of 14.5 meters. The port can handle ships carrying upwards of 12,000 to 15,000 TEUs. Plans call for improving depths to 15.5 meters. Today the port has 16 cranes in


Jamaica’s economy comes from agriculture. “Jamaica has great capacity for


food production,” commented the Honorable Audley Shaw, Jamaica’s Minister of Industry, Commerce, Agriculture and Fisheries. King Pepper, for one, exports


operation. “Two Kalmar Liebherr ship-to-shore (STS) cranes were installed in April to handle the big ships,” said Farhat. A new operating system from Navis is also being installed. While volumes at the port


have remained at approximately 1.6 million TEUs for the last three years, officials stress that these improvements will increase volumes. “We have a five-year plan to increase our investment in the port,” Farhat remarked. This includes adding 200 people to terminal operations.


85% of its finished products to the United States, Canada, UK, other Caribbean nations, and Japan. Christine Wong, managing director at King Pepper, revealed that 85% of its Jamaica-made products are exported and go to the US, Canada, the UK, other Caribbean islands, and Japan. “Sixty percent – over 1 million jars a year -- goes to the US,” she said. The exports


are combined


with other shipments leaving the island. GraceKennedy also operates


as the largest single-entity food manufacturers in the Caribbean. Over 50% of its food sold under the Grace brand is manufactured in one of five factories in Jamaica. While products manufactured by King Pepper and


Zim’s Aristomenis loads at Jamaica’s Kingston Container Terminal (Photo by Karen E. Thuermer)


Added value services are also


available at the terminal such as the washing of reefer containers.


Export Opportunities


Besides transshipment, Jamaica is trying to develop exports, in particular the island’s agricultural, aquaculture and value added food business. According to Jamaica Promotion Corporation (JAMPRO) officials, 20% of


GraceKennedy do not require


reefers, they do add to Jamaica’s containerized freight business, and don’t take away from why the reefer container business is important. “We want Kingston to be a


major transshipment hub for reefer containers,” Farhat said. “We have room to expand. Currently, there are only 100 container terminals in the world doing this size of business.”


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