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Financial News

Nov 2012 Financial News

Caribbean ports rushing to meet challenges of Panama Canal expansion

Nov 26, 2012

Ports in the Caribbean are reportedly rushing to meet potential challenges posed by the expansion of the Panama Canal.

The Bahamas said it is among ports in Jamaica and Cuba, which are either expanding, or have plans to expand.

Some Caribbean port managers say they hope to receive post-Panamax ships and become a transshipment hub that will supply smaller ports with feeder vessels.

Others say they are simply bracing for increased feeder traffic, according to reports. Panamax is the term for the size limit of ships going through the Panama Canal.

Ian Rolle, president of The Grand Bahama Port Authority, said the port is working with Hutchison Port Holdings to stake its claim as the most modern container facility in the English-speaking Caribbean.

With a depth of 52 feet, the Freeport Container Port can already accommodate post-Panamax ships, he said.

We are the best prepared, said Rolle in a statement. We have the necessary equipment to handle the traffic, and, if we need more, we will get it, he added.

Having a harbour that is deep enough to accommodate these ships is key, saidRolle. The ports of Jacksonville and Miami in Florida are also planning to capitalize on the Bahamian business.

PortMiami is also hoping to undercut Freeport and regain some of the transshipment business that it lost after the September. 11, 2001 terrorist attacks on the United States, when new security regulations strangled business. Bill Johnson, director of PortMiami, said the Panama Canal expansion and Miamis recent designation as a foreign trade zone, which will make transshipping less cumbersome, will be a threat to Freeport.

They should be worried, he told reporters. Our job is to bring this business back. How do we change this? By being bulldog aggressive.

Anthony Hylton, Jamaicas minister of industry, investment and commerce, recently returned from a two-week trip to China and Singapore where he promoted the islands plan to become a global transshipment and logistics hub.

Hylton said the $8 billion to $10 billion project includes dredging Kingston Harbour, expanding port facilities and building a dry dock. It also hinges on linking ports and airports through road and rail networks, he said.

We have some assets in place. This is not starting from scratch, said Hylton, who has been trying to woo international investors and expects dredging to begin shortly. We will be ready for the post-Panamax, he added.

While Cuba is renovating its Mariel Port, analysts say the US economic and trade embargo is likely to keep it from fulfilling its potential as a transshipment hub. Under US law, any ship that calls on a Cuban port is prohibited from entering a US port for 180 days with limited exceptions covering foodstuffs and humanitarian goods.

I think Cuba is really one of the most interesting players of the future of course, assuming the embargo is lifted, said Rodolfo Sabonge, vice president for market analysis and research for the Panama Canal Authority.

He said the Spanish-speaking Caribbean island could become a hub for transshipment of goods as well as near-sourcing of manufactured goods for the US market. Maybe it would be like going back to the 1950s, Sabonge said.


Jamaica Gleaner
Monday November 26, 2012