Jamaica’s Logistics Hub Initiative: Airfreight – The sleeping Giant

By: Ainsley Brown

jlh_stacked_rgb

The Government of Jamaica (GOJ) is currently embarking on a massive undertaking to shift its economy to a logistics centered one. What Jamaica, lead by its Ministry of Industry, Investment and Commerce  recognizes is that:

“Improving logistics performance is at the core of the economic growth and competitiveness agenda. Policymakers globally recognize the logistics sector as one of their key pillars for development. Trade powerhouses in Europe like the Netherlands or in developing counties like Vietnam and Indonesia see seamless sustainable logistics as an engine of growth and of integration with global value chains.” 

The World Bank’s Logistics Performance Index 2014.

Air connectivity, particularly Sea to air connectivity, forms a central plank of Jamaica’s Initiative. The development country’s air cargo/airfreight capacity is therefore integral to the success of the Initiative. Dr. Eric Deans, the Chairman of the Logistics Hub Taskforce explains why:

 

 Airfreight – The sleeping Giant 

By: Dr. Eric DeansAir Cargo and Global Trade  stat

The development of Jamaica’s airfreight sector is indispensable and is a high priority for the Logistics Hub Initiative, even more so than its maritime counterpart. This is due to the fact that higher valued merchandise is usually transported by air and Jamaica’s air connectivity enhances our near shore advantage for goods destined to the Americas.  We face stiff competition from Miami and Panama. Miami is America’s second busiest international airport and number one international cargo airport.  It is American Airline’s bustling Latin American hub, and the DHL hub of the Americas. The fact that Miami International Airport is by far the most important U.S. gateway for U.S. and International goods bound for Latin America & Caribbean air cargo market will see Jamaica competing within the same market segment.

However, Jamaica’s Norman Manley International Airport (NMIA) accounted for 23,332 landings and departures of aircraft in 2010 which is relatively small compared with 376,208 for Miami International Airport.  To successfully implement Jamaica’s air cargo logistics hub involves attracting more airlines to use expanded and upgraded Jamaican airport facilities. It is  also important that the hub and spoke network concept corresponds to the future strategic planning of the airlines servicing the Latin American market. Boeing reports that approximately 72% of the total U.S. air trade with Latin America & Caribbean currently flows through Miami – 71% of U.S. air export volumes, and 73% of U.S. air import volumes.

Some of the major challenges facing the regional air cargo industry present an opportunity for a Jamaican hub. While the security regulations for air cargo are not quite as demanding as for passenger transport, the growing fear of terrorist attacks results in stricter controls, particularly for cargo entering or transiting U.S. territory.  Coupled with visa restrictions for passengers, these requirements can have debilitating effects on shipment transit time and efficiency. Consequently, routing options that avoid U.S. transfers can be beneficial for certain shipments.

As a premier tourist destination, there is underutilized space available in the belly hold of passenger aircraft departing to and arriving from numerous destinations that offer transshipment feed potential for air to air and sea to air movements. The potential capacity will increase further when more long haul services using wide body aircraft are utilized along with dedicated cargo freighters. The overwhelming majority of air freight is transported on scheduled (passenger and freight) services. Did You Know air cargo stat

The Hub will also facilitate more connections to a greater number of city pair combinations.  The Caymanas Economic Zone and the other logistics parks will provide value adding and buffer storage capacity that will allow consignments to be consolidated for more efficient dispatch via sea and air modes.  The clustering of large multinational companies in an economic zone environment will provide a strong “local” base that encourages carriers to establish hubs facilitating high utilization of their assets.  Noting that cargo operators typically require available warehouse facilities rather than undertaking the construction themselves, the Airports Authority of Jamaica is expanding cargo capacity at NMIA.’

 

Dr. Eric Deans is the Chairman of the Jamaica Logistics Hub Taskforce

Over thirty years professional experience in port, shipping and logistics in North America, Europe, Asia and the Caribbean. Most recently as Director of Shipping and Policy Research at the Maritime Authority of Jamaica and currently as Chairman, Jamaica Logistics Hub Task Force. 

 Senior management experience at the largest transshipment port in the Caribbean, the Port of Kingston. 

 A graduate of the University of Delaware with a (Ph.D.) in Marine Policy, the University of Wales with a (M.Sc.) in Maritime Studies and the University of the West Indies with a (B.Sc) in Chemistry. 

 A member of the Chartered Institute of Transport, U.K., Connecticut Maritime Association and American Association of Port Authorities. 

 A member of the Kingston Free Zone Board and Client Service Committee; Montego Bay Free Zone Board and Finance Committee; Kingston Container Terminal Privatization Enterprise Team; and Advisory Board for the Jamaica Customs Agency.

Share

Related Posts:

About Ainsley Brown

Ainsley Brown is currently working as the Director of Trade, Regulatory, Analysis & Policy for the Jamaica Special Economic Zone Authority (JSEZA) and is called to the Bar of Upper Canada (Ontario), Canada. His primary role is to provide technical advice on regulatory matters and trade matters to the CEO and team at JSEZA. He holds a LLM in International Commercial Law (with Merit) from the University of Westminster, having earned a diploma in law from London Metropolitan University and a BA (Hons) in Political Science from the University of Western Ontario. Ainsley is the Administrator of Commercial Law International and has an avid interest in logistics, global value chains; economic development; trade; commercial awareness; green energy; rugby; etc.
This entry was posted in Government Policy, Investment, Jamaica's Global Logistics Hub, Trade and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *