Maritime Transport Sector

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Maritime Transport Sector

• Infrastructure Imperatives
• June 2006, CSME

Roland Malins-Smith
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Dominant influence on infrastructure has been
containerization

• Origins of containerization trucker Malcolm
  McLean, 1956
• Precipitated globalization by reducing the cost
  of maritime transport
• Simple, effective way of moving goods which
  protects them, speeds up handling, permits
  inter-modal exchange, permits economies of scale
  with ships, speeds up delivery time, reduces
  inventories and costs
• The end game dramatically increase port
  productivity

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Impact of containerization

• Introduced a new class of vessels the container
  ship
• Introduced new handling methods organization at
  ports
• Dictates changes in port layout
• Requires investment in specialized port
  equipment
• Increases labor productivity, leads to reduction
  in work force
• Today we take containerization for granted, but
  it has been quite a change for the Caribbean, and
  the adjustment of our port infrastructure is an
  ongoing exercise

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Caribbean network of mainline and feeder services
developing

• Larger ships being used from Far East, Europe
• Smaller ships moving containers from
• Florida
• Kingston Jamaica
• Manzanillo Panama
• Cartagena Colombia
• Freeport Bahamas
• Caucedo Dominican Republic
• And secondary transshipment points such as
• San Juan, St Croix, Point Lisas, Port of Spain,
  Vieux Fort

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Transshipment is major business for ports such as
Kingston

• Will move over 2.2 million teus in 2006
• Now investing US250 million to grow to 3.2
  million within 4 years
• Expects to have 2,100 ship calls this year
• Building another 475 meters of berth and
  additional 161 acres of container terminal space

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For Transshipment ports, success requires high
productivity and low unit costs, achieved with

• Measured investment in berths and terminal
  storage areas
• Container gantry cranes, RTGs, straddle carriers,
  container stackers, yard trucks and chassis
• Effective and experienced management
• Industry specific software
• Motivated work force, stable labor environment.
• Objective Rates of 25-35 moves per gang hour

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State of port infrastructure in CSME a mixed bag
difficult to generalize

• Some ports such as Kingston have spent
  considerable sums, making rapid progress
• Most Caribbean ports have modest programs for
  acquiring / using container handling equipment
• Some are in urgent need of berth renovation and
  expansion, dredging and terminal construction
  Paramaribo and Georgetown
• Given state of infrastructure, fair to say that
  port productivity can be improved with further
  investment and with pro-active management of
  existing facilities

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From operators standpoint, infrastructure issues

• Berthing competition between cruise and container
  ships
• Where volume warrants, investment in cranes can
  intensify use of existing facilities
• Insufficiency of moving equipment between ship
  and storage area
• Preventive maintenance programs preserve
  equipment
• Communications equipment sometimes lacking
• Organization of container storage areas and
  pre-staging to increase productivity
• Use of available software
• Rationalization of working hours, gang size,
  charges
• Container turn time, demurrage, storage regimes
• Training to avoid poor handling methods, improve
  safety
• Container truck scales increasingly useful
• Effective and experienced management the key
  element

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Ships and services no shortage of opportunities
for CSME

• As a by-product of containerization,
  comprehensive regional network of services exists
• Most if not all ports linked with day of the week
  sailings
• Over 15 container shipping lines offer regular
  services
• 6 actively canvass intra-regional business
• Tropical Shipping www.Tropical.com
• Bernuth Marine www.Bernuth.com
• Seaboard Marine www.Seaboardmarine.com
• Crowley Liner Services www.Crowley.com
• CMA/CGM www.cma.cgm.com
• Seafreight Line www.seafreightagencies.com
• Current schedules can be found on the websites.
  CSME exporters who generate container size
  shipments are familiar with these services

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Some issues remain

• Handling cost, a function of productivity, remain
  relatively high, for reasons already given
• Minimum costs and charges associated with
  container activity make LCL shipments very
  expensive
• For primary products, refrigerated services
  usually come in 40 container sizes
• Knowledge of existing services and opportunities
  could be improved

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Thank you !