Follow us: Entypo-facebook Entypo-twitter

CM-web-Banner-2014-b

From the CSA President

Predicted growth for the Caribbean and Central American markets

As one of the premier meeting grounds for the Caribbean maritime sector, the CSA’s 45th Annual General Meeting, Conference & Exhibition in Cartagena, Colombia on 19, 20 and 21 October is well positioned to provide a fertile environment for the discussion and analysis of topics of critical interest to the sector and our membership.

This event is unfolding against the backdrop of the final moments of the US$ 5.2 billion construction project to widen the Panama Canal which, minor construction setbacks notwithstanding, is powering ahead toward completion. From April 2016 containerships of up to 13,000 teu will be able to navigate the canal, which more than doubles its current 5,000 teu limit.

Broadening the international shipping lane to bigger vessels is predicted to drive significant change in international and regional maritime trade dynamics. This is compounded by the increase in vessel size driven by rapid advances in engine technologies and hull design combined with new alliances among shipping lines. The 16 largest shipping lines have formed themselves into four major consortia, collectively controlling over 95 per cent of the cargo volumes moving in the major east-west trades.

The improved economies of the larger ships now make it possible to route cargo via the Suez Canal into the Atlantic Ocean and on to the Caribbean or directly to US East Coast terminals. This presents an opportunity for our regional ports as shippers realign the trade routes between the major production and consumption centers of the globe. In fact, medium-term container market forecasts indicate that the Caribbean and Central American markets are expected to experience a 7.7 per cent annual growth to 2017 compared with 6.5 per cent in global container volumes.

Potential

With the potential increase in the flow of goods through these regional hubs on their way to the major markets of the US Eastern Seaboard, there is potential for other logistics-related services like warehousing and distribution also migrating to these hubs, allowing them to develop into fully fledged logistics clusters.

While there exists great opportunity for growth in Caribbean logistics, there are important challenges as well for region’s the major hub ports, which continue to strive to meet the attendant and projected demands. According to assessments by the World Bank, there are factors yet to be resolved including the quality of the trade and transport infrastructure, the efficiency of the customs processes, the ease of arranging competitively priced shipments, the quality of logistics services, the ability to track and trace consignments and the frequency with which shipments reach consignees on time.

Implementation of the World Trade Organization’s Trade Facilitation Agreement is a critical factor that requires our collective attention and combined leverage. We must serve as lobbyists, guides and sounding boards for our governmental policy-makers. Trade facilitation, non-tariff measures and services are key elements for trade development and there is an urgent need to focus on enhancing national, regional and international policy and infrastructure in order to promote sustainable growth and global competitiveness.

How will infrastructure developments and the emergence of new destinations, combined with the need for fuel efficiency, reshape the Caribbean? What is required of Caribbean ports if we are to capitalize on the advent of Oasis-class and mega cruise vessels? How might the opening of Cuba, dubbed by some ‘the unpredictable variable’, impact regional development? Cruise lines are already exploring possible itinerary options for ports in Cuba in order to add destinations for cruises of various lengths that begin and end in Florida or at one of the many island nations near Cuba. That development is conditioned by political developments but also by the fact that many of these ports require infrastructural changes in order to accommodate these mega vessels.

Adapting

Which areas will emerge in the cruise charts of the future and which will decline? How is the region adapting to the increase in international source markets? What is being done and what needs to happen to create demand in the face of rising international competition? These are matters demanding our debate as an industry.

We must also examine how LNG bunkering capacity is being developed around the world. Carnival Corp. is the latest to show its belief in LNG bunkering by signing a multi-billion-dollar contract to build four ‘next generation’ LNG-powered cruise ships with the largest guest capacity in the world. On the infrastructure side, South Korea has just announced its plan to construct LNG bunkering terminals at a number of its ports. Here in the region, AES Dominicana is launching LNG transshipment and LNG bunkering services for the Caribbean, Central and South America, leveraging the company’s LNG receiving and storage terminal and fuel-handling capability in the Dominican Republic. As a clean energy, natural gas is being increasingly valued as a reasonable option to resolve emissions for shipowners in coming years forced by new rules and policies from IMO and government bodies.

Increased cruise and commercial shipping in the Caribbean Sea have heightened the risk of intentional and accidental pollution according to Christopher Corbin, an official at the United Nations Environment Program (UNEP). Corbin said that, although data from his organization’s Caribbean environment program suggested that 70 per cent of the pollution of the marine environment comes from land-based sources, there was still a need to ensure that pollution from ships was minimized, as it had the potential to affect the region’s fragile coastal and marine ecosystems. Now, more than ever, we must recognize that the protection of the Caribbean Sea is not just about environmental conservation and marine protection but also makes good business sense.

Viability

The viability of shipping can only be guaranteed by having in place highly trained, skilled and knowledgeable seafarers and land-based maritime professionals to efficiently and safely operate ships and ports of the world. We at the CSA continue to demonstrate our commitment to industry-related training by offering courses at little or no cost to ensure capacity building among skilled employees across the region. Our offerings have been eagerly anticipated and well supported, which demonstrates the demand in this area and the training gaps we seek to fill.

The CSA’s 45th AGM, Conference and Exhibition will serve to connect shipping industry players with new ideas and opportunities that will allow them to remain viable in the competitive global market. I am certain that all the participants will enjoy the discourse and planned events and I look forward to robust and productive dialogue during the conference.

 

Grantley StephensonSTEPHENSON Grantley
President, Caribbean Shipping Association