Contributed by Fritz Pinnock, managing director of Lannaman & Morris (Shipping) Limited and senior lecturer of the Caribbean Maritime Institute.
ACCORDING TO Containerisation International, in a report published in August 2004, the Kingston Container Terminal held the number one position in the Caribbean. The port was ranked 63rd among the world's top 100 ports, above Freeport (Bahamas), which ranked 65th in the world.
This translated to 1,137,798 Twenty-foot Equivalent Units (TEU) passed over Kingston Container Terminal against 1,057,879 moving through Freeport, Bahamas. It is obvious from the table that these are the only two Caribbean ports to be ranked in the top 100 container ports of the world. Port of Spain (Trinidad), Williamstad (Curacao) and Bridgetown (Barbados) were the only others to be ranked in the top 200 container ports of the world.
The characteristics of the container ports in Jamaica and Bahamas are different from the rest of the Caribbean in that these are the only two regional ports
competing among the global hub ports for transhipment cargo. Ninety per cent of the TEU volumes flowing through these ports are relay or transhipment cargo
destined for other ports. When one considers that this business can disappear overnight, it is frightening that the future of the entire shipping and logistics industry depends on the viability of the port in sustaining transhipment business.
FICKLE BUSINESS
This business is very fickle, as other ports such as Panama, Dominican Republic and Colombia have entered the race for regional hub port status.
The Port of Kingston's ideal geographical location, by being situated almost in the middle of the East and West trade routes for vessels transiting the Panama Canal, and the fact that Jamaica has the seventh largest natural harbour in the world, no longer assures us a ticket to be selected as the regional transhipment centre for the future.
The competition has been reduced to overall cost and value for the international shipping lines which are fighting for their own survival. It is clearly no longer 'business as usual' as the landscape has now changed and regional competition is very fierce.
With the opening up of Freeport, Bahamas as a regional hub port in 1997, Jamaica enjoyed an almost safe future as the premier regional transhipment hub. Subsequently, other players entering the market in light of international port management companies negotiating global rates with major shipping lines such as Maersk-Sealand, Mediterranean Shipping Company (MSC), Zim and Evergreen, to name a few.
This explains why Freeport could move from nothing in mid-1997 to the position of number 65 in the world in less than six years.
The reality facing these two ports is that ships are getting larger in order to achieve economies of scale. This puts more pressure on the ports to dredge their channels to deeper depths and install wider and taller Super Post Panamax gantry cranes to load and discharge containers from these wider and taller ships.
Naturally, these larger seventh and eight generation ships are now moving in excess of 5,000 TEU per vessel, thus placing greater financial pressure on the hub ports which now have to expand and upgrade in order to maintain business.
The reality is that a port cannot invite business and then expand. The reverse must be done by providing the facilities along with the support infrastructure and productivity to attract and maintain these international shipping lines.
CONSEQUENCES
The future maritime transport model for container trades will possibly be one dominated by large container ships (10,000-15,000 TEUs) relayed by an extensive fleet of feeder vessels. The consequences on the maritime geography of container lines will be dramatic.
The overall picture, already emerging today, is one based on a backbone service, formed by the main East-West and West-East loops, on which multiple North-South links are grafted.
These critical link-ups will occur in global or mega hub ports. The network of services will be completed by different layers of transhipment and 'feedering' which will connect the global or mega hubs with regional or sub-regional hubs (such as Port of Spain, Trinidad) and the latter with a multitude of feeder ports. Such multi-layered networks will give each port a distinct status
within a global service pattern and inevitably alter the competitive
position of individual ports.
DRIVING FORCES
The new logistics concepts and scale increases are two primary forces driving this global explosion and reshaping the future of
trans-shipment ports. The new logistics concepts such as
globalisation, outsourcing and Just in time have created the need for the establishment of complex
international distribution chains.
Their ultimate goal is to allow
shippers to place the right product on the manufacturing or retail floor anywhere in the world at the right time and at the right price. This translates to the fact that it is no longer just countries trading with countries but trade blocs with trade blocs.
Scale increases in shipping are the inevitable but logical result of the main tendencies observed in the liner business. These include:
Trade expansion and growing traffic levels.
Strong concentration both on the demand and the supply side.
Specialisation of shipping
services offered.
Technological innovation.
Integrated door-to-door
transport.
These tendencies are also the driving forces behind most new developments in shipping, transport and distribution. The most spectacular being the diseconomies of scale of container vessel sizes have moved from 750 TEU in 1972 to currently over 8,000 in 2004. The resulting impact on ports such as Kingston's, goes without saying, as the facilities have to be developed to accommodate these changes.
Shipping is clearly a mirror of the world economy and the position of any country in this global industry is reflected through the development and the level of business moving through its ports.
