Jamaica – Towards a Logistics Centred Economy

Jamaica has been a significant player in the maritime industry since the days of Henry Morgan in the 17th Century. Logistics has been a significant pillar in the economic development of our nation for centuries with the country boasting the seventh largest natural harbour in the world- Kingston Harbour.

With the expansion of the Panama Canal, shipping and logistics organisations are looking towards Jamaica to expand their businesses.  We expect a surge of investments and the onus is on us to move swiftly to continue to improve the business environment to convert these interests into sustainable entities.

 

Creating a Logistics Hub

Given Jamaica’s strategic location, cost competitiveness, road, rail, maritime, aviation, and telecommunications infrastructure, the country is poised to become a global logistics hub. There has been significant investment in the Kingston Container Terminal by CMA CGM and the dredging of the harbour to facilitate Post-Panamax vessels, signaling that Jamaica is preparing its infrastructure to facilitate increased volumes of transhipment cargo. The Jamaica Customs Agency has implemented the Automated System for Customs Data (ASYCUDA) to improve the efficiency of its operations. The efficiency of the ports has also improved with the implementation of the port community system; a paperless system which manages trade and logistics processes of the ports in real time. This will redound in significant savings for shipping lines and reduce administrative costs. The specific incentive program to facilitating investments is this space is the Special Economic Zone Act (SEZ), with the repeal of the Freezone Act; the SEZ will be the vehicle to help local and international investors to move forward seamlessly.

The diversification of the Tourism Product through Nautical Tourism is another burgeoning opportunity. This involves activities such as recreational boating, marinas, cruises and other water based tourism.  The Maritime Authority of Jamaica must be commended for being able to increase the rate of registration for yachts which has in turn increased the level of recreation, sports and entertainment activities undertaken using these vessels.  This represents a significant prospect for Jamaica. There are also plans to upgrade the Errol Flynn Marina in Port Antonio, which is a dock for these smaller vessels. The expansion is expected to deliver a range of economic, recreational, social benefits to the community.

Jamaica is moving towards creating an International Business Centre as a means of further diversifying its economic base and stimulating economic growth. This is also aligned to the Nautical Tourism Strategy.  Each ship or yacht registered in Jamaica will be considered a company if the International Business Companies Bill is passed. Under the bill, both holding and operating companies would benefit from  Jamaica’s tax exemptions, and would be able to engage in such activities as international trade, listing their shares on international stock exchanges, owning and licensing of intellectual property, and aircraft and shipping financing. Additionally, the expansion of the Ian Fleming Airport to accommodate flights such as American Eagle and Delta also presents an opportunity for increases air routes and also attract the Private Planes Industry.

Opportunities will emerge with the resuscitation of the passenger railway services. The country benefits from a robust railway system for the transport of bauxite, however there is room for expansion to other types of cargo as the railway is being privatised and the government is in negotiations with a potential concessionaire. There are potentials for other services; Wray and Nephew for example, has plans to resume the tourist rail service from Montego Bay to Appleton Estate in St Elizabeth, giving visitors a tour of the estate and factory via train. Tourists will also be able to  disembark in communities, interact with residents and make purchases of food, craft and other items, contributing to community development and sustainability.

Wouldn’t it be great to have Cruise Ships docking in Kingston? This would be a game changer for Downtown Kingston as well as Logistics as this would create further destinations for the various cruise lines, and increase the possibilities to earn much needed foreign currency. This is just the tip of the iceberg, Logistics as an industry is exciting and can take the Jamaican economy to new heights.

 

What’s in it for me?

“What’s in it for me” is a frequently asked question. The Logistics Hub is more than shipping. It will require the integration of cargo, maritime and economic zone initiatives which will require range of products and services.  There will be need for goods such as water, fuel, fruits and vegetables and services such as maintenance of equipment, bunkering, legal, information technology, human resource, training and insurance. The hub will provide opportunities for exporters,  accountants, crane operators, food and beverage practitioners, data entry personnel, welders, electricians, maritime lawyers, logistics officers, truck drivers, stevedore operators to name  a few. A practical example is CMA CGM LOG which is in the process of establishing a Logistics Value Added Centre, will need workers such as: fork lift operators, delivery clerks, accountants and security personnel. Thus a trained and certified workforce is needed to take advantage of  emerging jobs.

The nexus between human capital and economic development cannot be underestimated. The Caribbean Maritime Institute has played and will continue to play a significant role in human capital development to facilitate the Logistics Industry.  Other public and private education and training providers need to respond to the current and emerging needs of the industry, ensuring a pool of trained and certified persons are available to adequately meet the human resource demands of the industry.

The City of Kingston will be signing City Agreements with other internationally recognized Maritime Cities to highlight Jamaica as a logistics destination. The global logistics community is eyeing Jamaica with keen interest as they too seek to leverage Jamaica’s location to access global markets. Local business such as West Indies Petroleum, Wray and Nephew and the Kingston Wharves are cognizant of the emerging opportunities in logistics and have implemented deliberate strategies to take advantage of them.  The value of these investments (Local Direct Investment) to the sustained growth and development of the economy cannot be denied.

In conclusion, a multimodal approach (sea, air and land) is required if Jamaica is to become a logistics centred economy. Vernamfield is envisioned as a cargo aerodrome, industrial centre and warehousing facility. The Caymanas Economic Zone will give rise to industrial and technology ventures. The dredging of the Kingston Harbour will facilitate the docking of bigger ships. The railway will facilitate cargo movement. These and other initiatives are all a part of the logistics master plan and their achievement is critical if Jamaica is to become the fourth node among global logistics hubs.

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Jamaica Promotions Corporation (JAMPRO)
JAMPRO is an Agency of the Government of Jamaica’s Ministry of Industry, Commerce, Agriculture and Fisheries, that promotes business opportunities in export and investment to the local and international private sector.

The views expressed by contributors do not necessarily reflect the views of JAMPRO

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