Tue | Dec 11, 2018

Growth & Jobs: Taking flight: Jamaica’s logistics hub initiative looks to transform the country’s economy

Published:Tuesday | September 4, 2018 | 12:00 AM
A section of the Port of Kingston.
A section of Edward Seaga Highway.
A view of the Kingston port.
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Historically, Jamaica's strategic location has made the island an ideal destination for outside interests and investors. From Port Royal's glory days as the vibrant centre of the Caribbean to Jamaica's rise as a tourism staple for the North American market, the country has capitalised on its central location close to major markets and continents.

With all of this history and its access to the major shipping lanes and air routes, the country has yet to execute an aggressive strategy to fully leverage its natural resources and realise its potential for success in the logistics sector ... until now.

To position Jamaica as the fourth global logistics connecting point, comparable to Singapore, Dubai and Rotterdam, and to create a logistics-based economy that will propel economic growth and jobs, Jamaica is moving forward with the Global Logistics Hub Initiative (GLHI). The initiative is a development strategy that will boost the sector's performance through an enhancement of Jamaica's activities in the global logistics sphere.

The Jamaican Government has proposed that with the development of Jamaica as a logistics hub, the country will have greater opportunities to handle increased volumes of transshipment cargo.

Jamaica will also be perfectly positioned to receive post-Panamax ships travelling from the Asia-Pacific region as these vessels will now have a direct shipping lane from the Pacific Ocean to the Atlantic Ocean (Eastern Seaboard and South Atlantic).

In addition, with the implementation of special economic zones (SEZs) in proximity to major ports and airports, there is an excellent opportunity for companies interested in the country's manufacturing sector to benefit from the island state's connectivity.

 

SEAMLESS SERVICE

 

All components of the hub will be synergised to present seamless logistics services to the international trading community. A critical component of the GLHI is the broadening of bilateral collaborations with Jamaica's global partners and the encouragement of private-sector investment and financing through private-public partnerships. The initiative will provide a mix of opportunities for global and domestic commercial and industry interests.

This initiative and further development of the logistics sector mean that investors and business interests who invest in Jamaica will find themselves in striking distance of a market of 800 million people across the Western Hemisphere. The development of the hub and the SEZs represents a significant opportunity for companies in manufacturing, outsourcing, supply-chain management, and other segments in the logistics sector.

The plan has resulted in logistics making compelling moves for the Jamaican economy; the sector has seen significant investment over the past two years, and with the divestment of the Kingston Container Terminal in 2016 to CMA-CGM, the third-largest shipping line in the world, the Port of Kingston has seen upgrades to the tune of approximately US$400 million.

This includes the upgrade of the physical and technological infrastructure, dredging of the harbour to facilitate post-Panamax vessels, and overall re-development of the port berths. This investment contributed to the improved efficiency of the port, enabling its capacity to increase to approximately 3.4 million TEU per year.

 

... Success story

 

This project is just one of Jamaica's success stories in logistics, with the sector representing a contribution of US$728 million to the country's GDP. And according to Jamaica's trade and investment promotions agency, Jampro, investment in the sector is growing. Jampro is working with other arms of the Government to lead the transformation of the Jamaican landscape into an efficient and lucrative logistics-centered economy, with infrastructure playing a strategic role.

The agency's president, Diane Edwards, said: "We are seeing the growth in logistics investments coming to Jamaica as more enterprises realise that there are untapped possibilities available. The numbers are telling us that this sector is poised for excellent advancement in the next few years."

Edwards described Jamaica as an excellent opportunity for logistics as the country has unique advantages when compared to the rest of the Caribbean. "Jamaica has the location, the talent, the infrastructure and, most importantly, the support from both the public and private sector to prepare for the sector's growth," she said.

Edwards added: "It is really no wonder that in the 2017-2018 financial year, Jampro facilitated US$315,000,000 in capital expenditure spend in Jamaica, an increase from the US$58,000,000 in the 2016-2017 financial year. The numbers tell the story and we are focused on improving that performance in the next year."

 

LOGISTICS HUB MASTER PLAN

 

To ensure that Jamaica continues on this course and exceeds its expectations for logistics, the Jamaican Government launched the Logistics Hub Master Plan in 2018. The plan includes the development of approximately 3,900 hectares across the island, with a total investment cost of over US$28 billion.

This will also expand the numerous investment opportunities available in logistics and infrastructure. Existing opportunities include the development of the railway, with its first phase in the tourism capital Montego Bay running to southwestern Jamaica; the Kingston Logistics Park, which encompasses a significant tract of land around the Port of Kingston; and the Caymanas Economic Zone, which will facilitate investment in light manufacturing, software development, financial services, distribution, and value-added logistics. Caymanas is also in proximity to the English-speaking Caribbean's largest dormitory community, Portmore, which will provide educated and skilled talent.

Edwards said that with the enactment of these oppor-tunities and more, Jamaica will see the dream of making the country a logistics hub becoming a reality. She said, "We have a goal of making Jamaica the place to live, work and do business by the year 2030 , and the logistics hub is a significant part of this. We are confident that the Logistics Hub Initiative will be realised and that Jamaica's logistics sector will truly take flight."