Leveraging the Power of Speed and Connectivity” – The Jamaica Logistics Hub

Imagine a television manufactured in South Korea having customers worldwide.

This television is sold within the markets of Brazil, Ecuador, and Canada. However, with each country having its personalized labeling regulations for the product to clear customs, the manufacturer makes the decision to ship six (6) containers with the product to a centralized, designated area — The Jamaica logistics hub. Here in Jamaica’s logistics hub, the televisions destined for Brazil are labeled and repackaged with the appropriate handbook then shipped via the most cost-efficient route, the Panama Canal. This kind of servicing is done for the remaining televisions, with the exception of the user handbooks being translated into Spanish for Ecuador, and English / French for Canada.

Excerpt from Ronald Mason, The Jamaica Gleaner (September 2013)

Like York Pharmacy “Smack in the middle of Half-Way-Tree,” so too is Jamaica strategically located at the intersection of major international sea transport routes. Stretching in an arc from the western end of Venezuela in South America to the peninsula of Florida in North America, (The Gleaner, n.d) Jamaica is almost centrally situated in the Caribbean basin at coordinates 18.1824° N, 77.3218° W; it lies within the direct shipping lanes of the United States of America and Europe to the Panama Canal. The country’s commercial potential was first initiated within the seventeenth (17^th) century when the town of Port Royal was established into being the most profitable centre of the English colonies (Mason, 2013). Port Royal’s location in the middle of the Caribbean was what made it so ideal for trade (Tortello, 2001).

Before launching into the fine details of Jamaica’s global logistics hub, sensitization to the key terms must first be defined. According to Microsoft Encarta Dictionaries (2007), the term “global” makes reference to “worldwide,” that is, relating to or happening throughout the whole world. This dictionary also went on in clarifying the term “logistics” as an “organization of complex task;” or simply as “movement management” which ensures the planning and control of the flow of goods and materials through an organization or manufacturing process. Furthermore, thefreedictionary.com defined the word “hub” as a centre of activity or interest; in other words, a focal point. Lastly, the term “opportunity” is defined by the merriam-webster.com dictionary as “a good chance for advancement or progress.”

In merging the main terminologies, Europlatforms EEIG (2004) defined a logistics centre as the specific area where all the activities relating to transport, logistics and goods distribution (both for national and international transit) are carried out on a commercial basis by various operators (owners or tenants of the facilities). In other words, the logistics hub may be compared to that of a clustered village – A village planned and built with the appropriate infrastructures and services to best manage all the activities involved in cargo trade.

Today, it is estimated that 90% of the goods circulating worldwide are transported by sea, placing maritime trade at the heart of the issues related to economic growth (Association of Caribbean States, 2012). Since the liberalization of markets, there has been a significant boost in international trade. The situation as it now exists, has island states of the Caribbean importing a vast majority of goods required for their consumption in addition to the importation of raw materials required for the numerous goods produced locally. Owing to Jamaica’s geographical location, trade in goods occurs primarily by sea with the Kingston Wharf acting as a logistics hub on the island (Haughton, 2013). However, the Caribbean is faced with very high transportation costs (on average, three times higher than in other regions), thus acting as a barrier to trade while reducing the profitability of exchanges and further impacting the entire economy (ACS, 2012). The justification of transport and strengthening of cooperation in this area may lead to greater efficiency and a reduction in transportation costs with the resultant consequences being on economic development. Since the greater Caribbean cannot escape the globalization process, the trade can certainly facilitate a greater turnover for its involved states by utilizing a more efficacious maritime transport technique (ACS, 2012).

Though having some promising moments, Jamaica has always experienced ‘rain on its parade.’ Being known as a country with vast entrepreneurial spirit and an abundance of natural resources, the opportunity has now presented itself for this little island to embark on one of its greatest achievements yet… One in which we must not sit back as a people and allow to bypass us! It cannot be emphasized enough, that Jamaica lies within such close proximity to North and South America – sitting at the intersection of one of the most traveled maritime and aviation routes to the Americas, Europe and Western Africa. As such, businesses located in Jamaica can readily access large commercial markets in these regions — totaling over 800 million people! (Jamaica logistics, 2013). The country will also be presented with the advantage of reeling in a myriad of investment opportunities thereby utilizing the power thrust upon us (its people) to transform the country’s economic situation. Jamaica’s logistics hub will act within the capacity of an international ‘airport for containers’ providing prime opportunities for swift delivery to final consumers at substantial cost savings (Jamaica logistics, 2013). Since the country already has a robust telecommunications infrastructure, trained work force, established industries that support growing successful companies and not to mention once again, its close proximity to some of the strongest markets – It is projected that Jamaica would be joining Rotterdam, Dubai and Singapore as the fourth (4^th) global logistics hub (Wright, 20113)… How about THAT for an achievement!?

Zooming in on the situation at hand, the Jamaica logistics hub initiative aims to establish this country as the premier logistics node within the Americas (Jamaica logistics, 2013). It will involve the creation of state of the art zones, upgrading development of air and sea port infrastructure and the creation of an enabling environment which will allow businesses to fully exploit Jamaica’s tactical location (Jamaica logistics, 2013). With strategic investment and global partnerships, the Jamaica Logistics Hub project will undergo:

• Expansion of the Port of Kingston to receive post-panamax ships

• Construction of a dry dock at Jackson Bay in Clarendon

• Installation of bunkering facilities at Cow Bay near Yallahs, St. Thomas

• Construction of a cargo and maintenance, repair and operations facility at Vernamfield in

Clarendon

• Development of an economic zone at Caymanas with a direct road link to the Port of Kingston (Caribbean maritime, 2013).

Training for those providing these services will be the key element of the logistics hub (Haughton, 2013) as it will employ Jamaican labour, though not all may be high-skilled (Mason, 2013). For a logistics hub of its projected size, approximately four thousand (4000) new jobs are forecasted. With the hub of course becoming the prime provider of job opportunities, let us not overlook the subsidiary services which will be created: Entertainment, restaurants, hotels etc. (Haughton, 2013); all of which clearly complements Jamaica’s already established tourism product. Quoting the Hon. G. Anthony Hylton (MP, Minister of Industry, Investment and Commerce), this proposal will be “The most transformative economic activity” ever bestowed upon this land!

Consequently, the Chinese government is seeking to invest US $1.5 billion into the logistics hub initiative, with the Great and Little Goat Islands being identified as the most feasible trans-shipment port in anticipation of the 2015 Panama Canal expansion (Haughton, 2013). Located less than a mile off the coast of Jamaica and southwest of the Hellshire Hills, these cays were declared in 1999 by the then Minister of Environment and Housing, Easton Douglas, as a Portland Bight Protected Area (PBPA) (Haughton, 2013); the area is a source of livelihood for over four thousand (4000) fishermen and a vital ecosystem with added benefits of protecting susceptible parts of the country from the effects of hurricanes (Haughton, 2013). The environmental issues cannot be ignored and as such brings controversy to this promising economic venture.

Nevertheless, environmentalists and activists need to be reminded that we cannot make an omelette without first breaking an egg! Certainly their focus can be shifted so that development can be undertaken whilst mitigating the effects on the environment.

Many countries offer economic advantages that serve to attract international interests to their shores in order to pursue business, with resources such as cheap sources of fuel, low labour costs, and effective financial systems to encourage investments (Clare, 2014). Our country, Jamaica, now needs to step up to the plate. No longer can we remain the underdog of the big league because we are not able to balance economic development and environmental management. We have a unique asset which cannot be bought by even the most affluent and influential nation – Our location; and therefore as a people, we owe it to ourselves to make this one asset work for us! (Clare, 2014)

Singapore’s strategic location in the heart of Southeast Asia and at the nexus of major shipping lanes has made it an important logistics hub and conduit for world trade. This earned it the title of being the number one (1) logistics hub among 155 countries globally in the 2012 logistics performance index as ranked by The World Bank. Today, Singapore is a prime location for major logistics firms, with 20 of the top 25 global logistics players conducting operations there. With world-class infrastructure and excellent global connectivity, Singapore is the preferred logistics and supply chain management hub for leading manufacturers across industries, which include Dell, Hewlett-Packard, Novartis and Panasonic (Singapore Economic Development Board, 2013).

This too, can be our future Jamaica, for what seemed to be just a concept thirty (30) years ago has now proven its worth in modern-day standing, fueling the need to bridge a gap in civil understanding. We are being presented with an opportunity beyond anything we have ever known; an opportunity which does not knock, but will only showcase itself once the door has been beaten down (Chandler, n.d). No longer must Jamaica be just one of the many trans-shipment locations around the world, it could become a permanent location from which the smallest of feeder ships to even the largest-carrying container vessels in the world are destined. Jamaica stands as a world brand and with its distinctive magnetism, will attract the financial thrust and confidence of investors to once again set up businesses here (Clare, 2014).

It is of no secret that Jamaica is off to a late start, but it cannot afford to drop the baton now! It must decide whether it wants to enter the arena of global trade or to be forever satisfied with its meagre tourism, bauxite, and remittance earnings (Hay, 2013). For it is said by P.L Andarr (n.d.) that most of us never recognize opportunity until it goes to work in our competitor’s business.

This is the time for Jamaica to be at the helm of such an exceptional transformation. Let Jamaica be the cornerstone on which sits the world’s largest economic powerhouse – Shipping.  Let Jamaica grab a hold of this unparalleled prospect which is to be one of the logistics hubs of the world – A global logistics hub (Clare, 2014). For one thing is certain, this initiative will revolutionize the region. Our sister islands: The Dominican Republic, The Bahamas and Cuba, will certainly implement measures to benefit from the most momentous opportunity for any country in recent history of modern day trade. It can be said with pure certainty that Caribbean shipping will never ever be the same (Land marine, 2013).

As Jamaica finishes the television for the market, it will steadily provide an opportunity for the Korean television manufacturer to do only its core function – Making televisions. The more efficiently this is conducted, the better the growth estimate with fine jobs.

Excerpt continues from Ronald Mason, The Jamaica Gleaner (September 2013)

The world is on our doorsteps, let it in. Now is the time for our nation to play a part in “Leveraging the Power of Speed and Connectivity” (Jamaica logistics, n.d.)

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