T&T needs to increase its port efficiency if it’s to become an efficient trading country, says Dr Trevor Townsend, chairman, Infrastructure and Logistics Committee, T&T Manufacturers’ Association (TTMA). “We are all ocean- and sea-bound countries. The issue of having efficiency in terms of port operations cannot be stressed enough. In this globalised world, there is an increased need for sophisticated logistics and shortened shipment time. “That is one of the intentions of the expansion of the (Panama) Canal, which is shortening shipment time. The reality is that ports in the Caribbean have had lower levels of efficiency when compared to other regions in Latin America. These inefficiencies lead to higher shipping costs,” he said. Townsend was speaking two Mondays ago at the Caribbean Investment Forum (CIF) held at the Hilton Trinidad Hotel and Conference Centre, St Ann’s.
He said increased shipments will lead to an increased burden on T&T’s ports. “As ship sizes increase to ten 20-foot equivalent units (TEUs), we expect that will put pressure on our ports both in terms of their ability to receive that, as well as the ability to quickly discharge cargo,” Townsend said. “We must look at what we can do to improve it.” He referred to a World Bank Performance Index that measures ports’ efficiency. “Looking at Panama, we realise that Panama is ranked 53rd in 155 countries in the 2010 World Bank’s Logistics Performance Index. It tells how they have been doing with all the infrastructure and regulatory procedures that affect the cargo in and out.
“That report stressed the importance of border management, co-ordination of the different agencies involved in border clearance and noted that trade logistics performance is directly linked to important economic outlook, diversification of exports and growth.” He said T&T was not even ranked on this index. “Jamaica is placed at 108. That gives you an idea of where we stand in the Caribbean. When we see that T&T was not mentioned, those of us in the private sector know what you cannot measure, you cannot manage.
“When we look at Jamaica they are taking a proactive approach to dealing with the expected increase in global trade as a result of the channel expansion. We saw last year the Jamaican Port Authority starting expansion of the Port of Kingston at US$200 million. We need to look at that carefully because if we cannot improve our efficiency, we will be left behind.” He compared T&T to Singapore to explain the level of T&T’s inefficiency. “According to a recent World Bank Doing Business Report, it noted that it takes 19 days to import goods into T&T and on average 14 days to export. When we compare this to a country like Singapore, it takes just five days to process documents necessary for the movement of goods. Furthermore, it costs US$150 to export a container from T&T and to import as much as US$1,200.
“Comparing that to Singapore to import and export, it costs US$400. We have work to do before we reach international standards. The issues of critical space limitation are important; if we are not careful, we going to be faced with congestion.”
Private sector’s role
Townsend said the private sector has a crucial role to play in increasing efficiency. “We recognise how efficiently we operate is very critical. The private sector must play an active role in ensuring the viability of the ports, bring about permanent solutions to the perennial problems of inefficiency. We note private-sector involvement in port management is a trend in many countries and have adopted those models. Even in the Latin American region, it has increased efficiency at lower costs.” Townsend said the introduction of ASYCUDA—automated system for customs data—will bring greater efficiency. “We have to look at the history of labour reform as well. This is a key measure of performance and we at the TTMA, we have been looking carefully at it. We look at the efficiency of capital clearance process, the quality of trade and transport, ease of arranging competitively-priced shipments, competency of logistics services. We note that with regards to Customs, competence and logistics in T&T, we are now implementing ASYCUDA, which we expect to greatly improve the performance of the division.” “We are concerned about the staffing and training required and they need to come up to scratch. The Government’s move towards Single Electronic Window (SEW) will allow trade transactions to be online and therefore companies and individuals wishing to import, application of permits and licences will improve.
“In the area of infrastructure, we see the ability to track shipments, with the introduction of the terminal operating system at the Port of Port-of-Spain, and that is expected to improve efficiency and productivity. So given the current space limitations at the Port of Port-of-Spain, we hope this system will address the system of congestion.” Townsend said the partial-scope agreement T&T signed with Panama will benefit manufacturers. “We are happy we have a number of things happening. That partial-scope agreement with Panama, we are happy that we can benefit from reduced tariffs and will give manufacturers access to products and we are looking forward to doing the necessary things in our own arrangements, so that movement of goods and services can benefit from the vision that drove the expansion of the Panama Canal.”
Port of Kingston prepares for Panama Canal expansion
The Port of Kingston Jamaica will see a US$200 million expansion project to enable the accommodation of larger vessels stemming from the Panama Canal expansion. The Jamaica Port Authority said the expansion is essential in ensuring the port is able to cope and capitalise with the influx of larger vessels stemming from the 2014 completion of the expanded Panama Canal. Noel Hylton, president and chief executive officer of the Jamaica Port Authority, said the port expects to see a rise from 39 to 149 of “ultra-large” carriers calling at the port by 2014. “These ships will certainly have a tremendous impact on world trade and, of course, on ports. What is quite evident is that only a few ports will be able to accommodate these mega ships,” Hylton said at a Jamaica Chamber of Commerce board in 2011.
The project involves the dredging of the port's channel and turning basin to approximately 16 metres to accommodate mega vessels, plus the option of expanding the port into Fort Agusta. Here the project will enable additional berthing of 1,500 metres and the development of a 173 acres of yard space and value-added logistics, according to the JCC.
“The prognosis is that on completion of the Panama Canal expansion, the Caribbean will likely be one of the greatest beneficiaries as it is expected that there will be a marked increase in the number of transshipment cargoes traversing the region, which no doubt will result in more cargoes being handled in Caribbean ports,” Hylton said.
The Port of Kingston expects by 2015 to see an estimated growth from 1.7 million TEUs of cargo per annum to four million TEUs per annum.