Anthony Hylton | Reprising Jamaica’s global logistics hub initiative

It is critical for Jamaica to implement, forthwith, the Logistics Hub Master Plan. The future People’s National Party (PNP) administration is committing to this transformation, pledging to update and act on it, within the first 100 days. Through the establishment of a Cabinet-level subcommittee and a Logistics Council, we aim to ensure a cohesive, nationwide approach to building a logistics hub that not only enhances Jamaica’s role in global trade but also empowers local communities. This transformation is not only about building infrastructure; it is about fostering resilience, bolstering our economy, and ensuring that future generations inherit a nation of opportunity and real prosperity.

Recently, Shipping Association of Jamaica on its 85th anniversary, with the European Union (EU) organised a lecture on Jamaica’s opportunities as a logistics hub titled: ‘Jamaica as a logistics hub in a changing Global landscape’.

The distinguished speaker, Jens Larsen, a logistics and supply chain analyst drew upon his breadth of experience in the field. Mr Larsen addressed the global context and dynamics against which Jamaica is striving to develop its articulated vision and mission of becoming the regional and global logistics hub, connecting the Caribbean and Americas to the global supply chain enhancing the flow of goods, people and services throughout the region destined to/from larger global markets in North and South America, Europe, Asia (via the Panama Canal) and Africa. He affirmed the centrality of the maritime sector in driving global trade and the link between sustainable trade and sustained economic growth.

He enumerated the current risks to global shipping and the supply chains which it facilitates, highlighting disruptions caused by trade wars with the imposition of increased tariffs and sanctions by one country or group against other trading nation(s); geopolitical conflicts as in the wars taking place in Ukraine and the Middle East, as well as disruptions caused by climate change affecting global trade, e.g., the impact of low rainfall on the carrying capacity of vessels transiting the Panama Canal. These disruptions to trade flows he argued do not stop trade. It simply provide logistics complexities which, in turn, presents opportunities to shift trade routes to other geographies and channels; example, the shift in trade routes around the Cape of Good Hope caused by the Houthi rebels attack on shipping in the Red Sea affecting the Suez Canal route to Europe. These challenges he noted give rise to the need to build flexibility and resilience in supply chain arrangements by trading enterprises, and the need for diversity in the sourcing options and logistics capabilities by countries and regions.

OPTIONS FOR JAMAICA

Against this background, he examined the options for Jamaica as a regional and global logistics hub and confirmed, without qualification or reservation, the opportunity for Jamaica to assume the role of a major trade and logistics hub in the Caribbean and Americas region, as well as providing connectivity to global trading networks and markets. However, he noted the challenges of building capacities in infrastructure, physical and digital, as well as the ecosystem necessary to support the build out and efficient operation of a logistics hub to take advantage of Jamaica’s geostrategic location, its stability, improving road and communication infrastructure, among others.

Importantly, he pointed to the existential threat to Jamaica’s ambition of becoming a logistics hub namely, the intense competition from other named regional ports aspiring to play the role of a hub port, and the likely rationalisation of these ports by the demands of major shipping lines as they continue their expansion to larger and larger ships requiring expanded capacities, as well as greener fuel. Jamaica, he concluded, still had sufficient critical advantages which, if acted on in a timely and strategic manner to build out the logistics hub could remain relevant to global shipping, the supply chains and global and regional logistics.

Jensen’s presentation was followed by two mixed panels of local and international, public and private sector representatives, focusing on identifying the specific challenges/gaps Jamaica faces in attaining its ambition of becoming an important node in the global trading system. The first, focused on the identification of the existing gaps and the measures to be put in place to fill those gaps. Here, a range of issues were raised and possible approaches identified, including the need for human resource training and work force development (several students from key tertiary institutions were present), zoning of near port lands needed for expansion of port and port related services, security, the need for a network of modern trade agreements, greater collaboration with key stakeholder interests and institutional capacity building.

AIRPORT LOGISTICS

Importantly, the presence of representative from air logistics interests made clear the need for an expanded focus to address the need for airport logistics infrastructure and the intermodal aspects (road, rail, barge, air links) of a competitive global logistics hub, to be complemented by greater access to real time, reliable and actionable data needed to optimise supply chains and logistics operations, trade administration, and policy planning.

The second panel focused on creating a climate ready port of Kingston, which in reality is a metaphor for Jamaica’s embrace of environmentally friendly technologies and processes as we build out a climate smart and green logistics hub. The panel discussion was rich in the quality of the information imparted and the sense of urgency communicated for Jamaica and the region to build out a road map for the critical and urgent actions required to catch up, and to keep pace with measures to decarbonise the supply and logistics chains, including air and sea ports, shipping and ground transportation, currently being taken by governments of major economies affecting trade. The panel brought to the fore the critical question of who will pay the costs of compliance with carbon border measures in developed country markets, and pointed to the risks to the sustainability of the logistics hub if green technologies and practices are not integrated in the development and operations of Jamaica’s logistics hub.

Unfortunately, we have lost almost a decade as this is the first of its kind public convocation on the future of the Global Logistics Hub Initiative since its articulation and the World Bank funded Jamaica Logistics Hub Initiative: Market Analysis and Master Plan, commissioned by the then PNP government and presented to stakeholder groupings and the government in 2017. While the current Cabinet adopted the report, it was never tabled in Parliament and debated. No further public consultation, nor publicly organised discussions, has been conducted since. The report’s cogent recommendations were made some three years before the COVID-19 pandemic hit. It is arguable, therefore, that had the priority recommendations in the report been actioned, the impact of COVID-19 on Jamaica’s vulnerable population and economy would have been greatly mitigated, due to the planned availability of smart warehouses for storage of medicine and the better transport logistics for distribution, and the benefit of a resilient supply chain.

For too long, this vision has been a missed opportunity – a dream deferred, hindered by the absence of sufficient actionable steps to leverage our strategic geographic and other advantages. The vision to position Jamaica as the fourth node in the global trading system is more than aspirational; it is a call to action. By modernising our logistics infrastructure, updating the Jamaica Logistics Hub Initiative, and implementing a sustainable green trade policy, we can realise this potential to the fullest.

G. Anthony Hylton is the shadow spokesman on industry, investment and global logistics and is member of parliament for St Andrew Western. Send feedback to columns@gleanerjm.com