Receive Updates From Writer
Get the latest stories in your inbox
Thank you for subscribing.
Something went wrong.
By all indications, Jamaica’s rollout of the Global Logistics Hub Initiative (GLHI) is still on, and in a big way. Jamaica is on the road to fulfilling its aim to be the fourth global logistic connection point on a scale similar to Dubai, Singapore, and Rotterdam. Jamaica has her eyes fixed on becoming a logistics-based economy in the medium to long term. Indeed, a logistics-based economy drives growth and job creation.
Jamaica’s Logistics Hub will help Economic Growth
With the opening of the expanded Panama Canal on June 26, 2016 (after about a year’s delay), Jamaica has no choice but to continue with its initiatives to become a strategic connection point for transshipment cargo. Geographically, Jamaica in a perfect position to accept post-Panamax vessels moving from the Asia-Pacific region. Post-Panamax vessels refer to those that are larger than the maximum length, width, and depth that the original Panama Canal accommodates. So, these mega ships now have a direct shipping lane from the Pacific Ocean to the Atlantic Ocean (that is the Eastern Seaboard and South Atlantic).
Furthermore, the Jamaican government is still committed to the implementation of the Special Economic Zones (SEZs). These SEZs are to be located near to the major ports and airports to make it easier for the country’s manufacturing sector to benefit from the improved connectivity. Strategically, Jamaica through a developed Logistics Hub will be in striking distance of an 800-million market across the Western Hemisphere.
The GLHI and SEZs are indeed big developments that require bipartisan support and fixity of purpose.
In fact, Jamaica has made strides in the implementation of the Global Logistics Hub Initiative and the Special Economic Zones. Here are just two highlights:
- The Kingston Container Terminal was divested in 2016 to CMA-CGM, the third-largest shipping line in the world. CMA-CGM has upgraded the Port of Kingston at a cost of approximately US$400 million. Physical and technological upgrades along with the dredging of the Kinston Harbour to accommodate the post-Panamax ships took place.
- The Kington Port upgrade contributed approximately US$728 million to the island’s GDP for the 2016-17 period. As Jamaica Trade and Invest Promotions Agency, JAMPRO reported in 2017, investment in the logistics sector grew.
JAMPRO’s CEO, Dianne Edwards said:
“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
Meanwhile, the Government of Jamaica launched its Logistics Hub Master Plan in 2018. Within this Master Plan are initiatives to develop approximately 3,900 hectares islandwide at a cost of more than US$28 billion. Notably, among the logistics infrastructure to be developed within a five-year horizon are:
- The railway system, with a first phase targeted for Montego Bay, the tourism capital, and running to the southwestern part of Jamaica;
- The Kingston Logistics Park, including a significant portion of land around the Kingston Container Terminal (KCT);
- Caymanas Economic Zone, to enable investment in light manufacturing, financial services, software development, value-added logistics, and distribution;
- Approximately 2,900 acres of land at Vernam field to be developed into a cargo aerodrome, industrial centre and warehousing facility;
- The Norman Manley International Airport, which is one of three international airports in the island;
- The Caribbean Maritime Institute converted into the Caribbean Maritime University;
- HEART Trust/NTA to provide training in logistics services;
- Highway improvements particularly the North Coast highway linking Ocho Rios to Montego Bay, and the North-South leg of the Highway 2000 Project;
- The proposed investment in the South Coast highway from Harbour View to Port Antonio;
- Also, expanded air cold storage facilities and cargo warehouses at the Sangster International Airport.
Encouragingly, some of these infrastructure projects are currently being carried out.
Jamaica’s Improved Logistics Performance
In the meantime, Anthony Hylton, Member of Parliament and Opposition spokesman on national development, physical planning and the National Housing Trust, wrote in the Sunday Gleaner on February 4, 2018, that
“The (Master) plan confirms the viability of the strategy to develop Jamaica as a fast-growing economy capable of delivering fiscal solvency and producing sustained growth in employment by becoming the hub of trading activities in the hemisphere representing a(n) 800-million person consumer market.”
Of significant note, Jamaica’s Logistics Performance Index (LPI) “took a quantum leap in 2014 from 124th position to 70th position out of 160 countries ranked.” Evidently, this massive movement in the Index is linked to the policy, legislative, and administrative reforms that the GOJ carried out and the port and road-related development projects undertaken.
Furthermore, developments in Jamaica’s energy sector such as the amendments to the All-Island Electric Licence in the Electricity Act and the introduction of the liquefied natural gas (LNG) auger well for the logistics economy. Plus, the Electric Licence allows SEZ developers, large-scale industrial users, or SEZ occupants to gain from a strategic “economic development tariff” designed to make wholesale electricity rate regionally competitive.
However, one of the concerns outlined in the Logistics Master Plan is the current inefficiencies in the Jamaica Customs Agency. Without urgent intervention to modernise this agency, Jamaica’s competitiveness in the global market will be undermined.
Undoubtedly, Jamaica must address existing gaps to realise its vision to be a place of choice to do business, including logistics. Such shortcomings include the myriad requirements for land transactions and development applications. To counter this shortcoming, the Master Plan recommends an adjustment to the country’s development planning framework to become more coordinated across planning processes and agencies. Furthermore, this adjustment will improve efficiency in the processing of development applications. One way to achieve this is to create a “one-stop-shop” for streamlined processing and approval of development applications.
Critically, the Master Plan also presents a development strategy for Jamaica to achieve the logistics hub vision. The development strategy covers seven enablers, 65 associated goals, and 105 actions. For the success of Jamaica’s logistics hub vision stakeholders must act on the following enablers:
- improve institutional effectiveness;
- ensure supportive policies and legislative and regulatory frameworks;
- enhance workforce capacity;
- develop efficient and productive infrastructure;
- provide efficient transport logistics systems;
- facilitate sustainable financing; and
- promote the Jamaica Logistics Hub Initiative.
So, Jamaica’s ultimate success in driving a logistics-based economy through the JLHI requires a ‘whole of government’ approach. Clearly, all arms of government must work together with partners in moving forward with this initiative.
The bottom line is, nothing less will do.