'Yes we can - no we can't'

Presentation by Charles Johnston, chairman of Jamaica Producers Group Limited, at the Logistics Hub Symposium held on January 21 and 22, 2014.

Until recently, the industry was not known by the logistics label, but rather by the shipping industry, the trucking business, the agency business, the stevedoring business, the forwarding business, and so on.

All of these have now come under the umbrella of logistics, which is described by the encyclopaedia Britannica as the "organised movement of materials and sometimes people" and by Wikipedia as "the management of the flow of resources between the point of origin and the point of consumption".

It is fair to say that I have been in logistics all my working life.

Over those years, I have been a director of Jamaica Fruit & Shipping, Kingston Wharves Limited, Shipping Services Stevedoring Limited, Jamaica Freight and Shipping Limited, Miami Freight, Port Authority of Jamaica (PAJ), Shipping Association of Jamaica, Seaboard Jamaica, Jamaica Producers Shipping, and recently, Kingston Logistics Centre (KLC).

I would like to label my presentation 'Yes we can - no we can't'.And I single out two experiences in two of the companies I am associated with.

KLC

The PAJ and ZIM Integrated Shipping Line decided in 2005 to launch a complete and integrated logistics service in Jamaica. They did this by jointly purchasing a prime eight-acre property adjacent to the container terminal in Kingston, which became a free zone. ZIM then set up an operating company in partnership with Jamaica Fruit & Shipping and named it Kingston Logistics Centre. The PAJ did not participate in the operating company, but facilitated with the free zone licence and a bonded warehouse licence.

KLC has experienced the 'yes we can - no we can't' syndrome more than most in Jamaica because we have attempted something new, which does not quite fit the laws of Jamaica, or at least the Customs interpretation of the laws.However, goods coming into the bonded warehouse do not pay duty until cleared, and this runs counter to Customs' goals, so they have responded by restricting the list of items that are allowed to come to KLC.

Of course, this is contrary to the concept of a logistics hub, and to make it worse, the restriction list varies with the interpretation of the different Customs officers. Bonded warehouses in the past in Jamaica, and still in the rest of the world, are considered an extension of the wharves, and in order for a logistics hub to work, they need to be again treated as an extension of the wharves, or inland terminals if you wish.

When it comes to the free zone side of KLC's operations, it becomes even more difficult as the Free Zone Act in Jamaica envisions the free zone operator to be only the owner of the goods and does not make provisions for the operator of the free zone to be the agent or logistics provider. This needs to be addressed urgently.

These are not KLC issues, but they are at the heart of the logistics hub concept, especially if we are to have zones all over the country.

Smooth movement

I pose this question: is Customs going to allow goods to move from the ports to these zones on a smooth basis without requiring the personal intervention of the commissioner or the collector to get the logjam removed?

We are working with Customs, the Ministry of Industry, Investment and Commerce, and the Ministry of Finance and Planning on these regulations, but it takes too long.

At KLC, the present situation is one day it is 'yes we can', and the following day it is 'no we can't'.

For many years JP, (with the assistance of Jamaica Freight and Shipping Services Stevedoring) ran one of the finest logistics operations in Jamaica and the Caribbean.

We ran a complicated logistics cool chain for many years and only ceased in 2008 because of continuing hurricanes.

This logistics cool chain involved:

Reaping 100,000 stems of bananas weekly;

Putting this fruit into 100,000 boxes weekly;

Palletising 100,000 boxes into 2,000 pallets weekly;

Hauling 2,000 pallets to port in 200 trucks weekly;

Unloading and transferring 2,000 pallets into cool rooms at the port weekly;

Taking 2,000 pallets from cool rooms and loading into the ship weekly;

Securing those 2,000 pallets of 100,000 cartons of bananas from drug contamination weekly;

Shipping the 2,000 pallets to the UK and discharging the ship and load into ripening rooms weekly;

Delivering 2,000 pallets or 100,000 boxes to Tesco, Marks and Sainsburys weekly.

Efficient operation

JP operated and managed the terminals in Jamaica and the UK.

Jamaicans ran an efficient cool chain to international standards for many years so, 'yes we can'.

We do not need to look only outside Jamaica for logistics expertise. We have it here in Jamaica and have had it for many years.

So where does 'no we can't' come into this picture?

Today, we are again exporting, but with one container a week, only 500 boxes.

We now have two Banana Board inspectors coming to the boxing plant to inspect the container of 500 boxes weekly and another three inspectors coming to see the loading of the container weekly.

When we had the ship with 100,000 boxes, we had one Banana Board inspector at shipside.

Why the need for increased bureaucracy? Why have we gone backwards? We need to reduce restrictions, not increase them.

Jamaicans need to be freed up to develop and grow. If we are not freed up, then 'no we can't'. If we are freed up then, 'yes we can'.

Kingston Logistics and Jamaica Producers are working to be free. I urge you to do the same and to make it 'yes we can'.