Maritime Transport SectorMaritime Transport SectorInfrastructure ImperativesInfrastructure Imperatives

June 2006, CSME June 2006, CSME

Roland Malins-Smith

Dominant influence on Dominant influence on infrastructure has been infrastructure has been containerizationcontainerization• Origins of containerization – trucker Origins of containerization – trucker

Malcolm McLean, 1956Malcolm McLean, 1956• Precipitated globalization by reducing the Precipitated globalization by reducing the

cost of maritime transportcost of maritime transport• Simple, effective way of moving goods Simple, effective way of moving goods

which protects them, speeds up handling, which protects them, speeds up handling, permits inter-modal exchange, permits permits inter-modal exchange, permits economies of scale with ships, speeds up economies of scale with ships, speeds up delivery time, reduces inventories and costsdelivery time, reduces inventories and costs

• The end game – dramatically increase port The end game – dramatically increase port productivityproductivity

Impact of containerizationImpact of containerization

• Introduced a new class of vessels – the container shipIntroduced a new class of vessels – the container ship

• Introduced new handling methods & organization at portsIntroduced new handling methods & organization at ports

• Dictates changes in port layout Dictates changes in port layout

• Requires investment in specialized port equipmentRequires investment in specialized port equipment

• Increases labor productivity, leads to reduction in work Increases labor productivity, leads to reduction in work forceforce

Today we take containerization for granted, but it has Today we take containerization for granted, but it has been quite a change for the Caribbean, and the been quite a change for the Caribbean, and the adjustment of our port infrastructure is an ongoing adjustment of our port infrastructure is an ongoing exerciseexercise

Caribbean network of mainline Caribbean network of mainline and feeder services developingand feeder services developing

• Larger ships being used from Far East, Larger ships being used from Far East, EuropeEurope

• Smaller ships moving containers from:Smaller ships moving containers from:– FloridaFlorida– Kingston JamaicaKingston Jamaica– Manzanillo PanamaManzanillo Panama– Cartagena ColombiaCartagena Colombia– Freeport BahamasFreeport Bahamas– Caucedo Dominican RepublicCaucedo Dominican Republic– And secondary transshipment points such asAnd secondary transshipment points such as

• San Juan, St Croix, Point Lisas, Port of Spain, Vieux FortSan Juan, St Croix, Point Lisas, Port of Spain, Vieux Fort

Transshipment is major Transshipment is major business for ports such as business for ports such as KingstonKingston• Will move over 2.2 million teus in 2006Will move over 2.2 million teus in 2006

• Now investing US$250 million to grow Now investing US$250 million to grow to 3.2 million within 4 yearsto 3.2 million within 4 years

• Expects to have 2,100 ship calls this Expects to have 2,100 ship calls this yearyear

• Building another 475 meters of berth Building another 475 meters of berth and additional 161 acres of container and additional 161 acres of container terminal spaceterminal space

For Transshipment ports, For Transshipment ports, success requires high success requires high productivity and low unit costs, productivity and low unit costs, achieved with:achieved with:• Measured investment in berths and terminal Measured investment in berths and terminal

storage areasstorage areas• Container gantry cranes, RTGs, straddle Container gantry cranes, RTGs, straddle

carriers, container stackers, yard trucks and carriers, container stackers, yard trucks and chassischassis

• Effective and experienced managementEffective and experienced management• Industry specific softwareIndustry specific software• Motivated work force, stable labor environment.Motivated work force, stable labor environment.

Objective: Rates of 25-35 moves per gang hourObjective: Rates of 25-35 moves per gang hour

State of port infrastructure in State of port infrastructure in CSME a mixed bag – difficult to CSME a mixed bag – difficult to generalizegeneralize• Some ports such as Kingston have spent Some ports such as Kingston have spent

considerable sums, making rapid progressconsiderable sums, making rapid progress• Most Caribbean ports have modest programs for Most Caribbean ports have modest programs for

acquiring / using container handling equipmentacquiring / using container handling equipment• Some are in urgent need of berth renovation and Some are in urgent need of berth renovation and

expansion, dredging and terminal construction – expansion, dredging and terminal construction – Paramaribo and GeorgetownParamaribo and Georgetown

Given state of infrastructure, fair to say that port Given state of infrastructure, fair to say that port productivity can be improved with further productivity can be improved with further investment and with pro-active management of investment and with pro-active management of existing facilitiesexisting facilities

From operator’s standpoint, From operator’s standpoint, infrastructure issues:infrastructure issues:• Berthing competition between cruise and container shipsBerthing competition between cruise and container ships• Where volume warrants, investment in cranes can intensify use of Where volume warrants, investment in cranes can intensify use of

existing facilitiesexisting facilities• Insufficiency of “moving” equipment between ship and storage Insufficiency of “moving” equipment between ship and storage

area area • Preventive maintenance programs preserve equipmentPreventive maintenance programs preserve equipment• Communications equipment sometimes lackingCommunications equipment sometimes lacking• Organization of container storage areas and pre-staging to Organization of container storage areas and pre-staging to

increase productivityincrease productivity• Use of available softwareUse of available software• Rationalization of working hours, gang size, chargesRationalization of working hours, gang size, charges• Container turn time, demurrage, storage regimesContainer turn time, demurrage, storage regimes• Training to avoid poor handling methods, improve safetyTraining to avoid poor handling methods, improve safety• Container truck scales increasingly usefulContainer truck scales increasingly useful

Effective and experienced management the key elementEffective and experienced management the key element

Ships and services – no Ships and services – no shortage of opportunities for shortage of opportunities for CSMECSME• As a by-product of containerization, comprehensive regional As a by-product of containerization, comprehensive regional

network of services existsnetwork of services exists• Most if not all ports linked with day of the week sailingsMost if not all ports linked with day of the week sailings• Over 15 container shipping lines offer regular servicesOver 15 container shipping lines offer regular services• 6 actively canvass intra-regional business6 actively canvass intra-regional business

– Tropical Shipping – Tropical Shipping – www.Tropical.comwww.Tropical.com– Bernuth Marine – Bernuth Marine – www.Bernuth.comwww.Bernuth.com– Seaboard Marine – Seaboard Marine – www.Seaboardmarine.comwww.Seaboardmarine.com– Crowley Liner Services – Crowley Liner Services – www.Crowley.comwww.Crowley.com– CMA/CGM – CMA/CGM – www.cma.cgm.comwww.cma.cgm.com– Seafreight Line – Seafreight Line – www.seafreightagencies.comwww.seafreightagencies.com

Current schedules can be found on the websites. CSME Current schedules can be found on the websites. CSME exporters who generate container size shipments are exporters who generate container size shipments are familiar with these servicesfamiliar with these services

Some issues remainSome issues remain

• Handling cost, a function of productivity, Handling cost, a function of productivity, remain relatively high, for reasons already remain relatively high, for reasons already givengiven

• Minimum costs and charges associated Minimum costs and charges associated with container activity make LCL with container activity make LCL shipments very expensiveshipments very expensive

• For primary products, refrigerated services For primary products, refrigerated services usually come in 40’ container sizesusually come in 40’ container sizes

• Knowledge of existing services and Knowledge of existing services and opportunities could be improvedopportunities could be improved

Thank you !Thank you !