Jamaica’s Port of Kingston Strives for Competitiveness
The government of Jamaica wants to develop its port of Kingston as the premier transshipment hub in the Caribbean. The port has a lot going for it, including a centralized location and direct liner services provided by the France-based global carrier CMA CGM and the Israeli shipping line Zim. The port currently enjoys direct calls to and from Ningbo, New York, Rotterdam, and Le Havre, with feeder lines serving ports throughout the Caribbean, Central America, the east coast of South America and as far as the Gulf of Mexico.
But Kingston faces some formidable competition in the region, most notably from Freeport in the Bahamas which has been operating at close to full capacity in recent years. Meanwhile, Kingston has been losing some market share, as when Maersk pulled its business, accounting for over 800,000 TEU, away from the port about five years ago.
A potential turnaround for the port of Kingston comes in a few buckets. In 2016, the Port Authority of Jamaica, a government instrumentality, signed a 30-year concession agreement with Kingston Freeport Terminals Limited (KFTL), a subsidiary of CMA CGM, to operate the government-owned Kingston Container Terminal. KFTL has spent $400 million over the last two years to upgrade the facility, especially to allow it to handle multiple neopanamax vessels at once. The expansion of the Panama Canal has been a boon to Kingston, and the port is already handling vessels as big as 12,500 TEU.
Meanwhile, Kingston Wharves, a privately held full-service facility in the port of Kingston is also making major investments to expand its container and vehicle handling capabilities.
“The expansion of the Panama Canal is bringing bigger ships to the Caribbean,” said Simon Farhat, the chief operating officer of KFTL. “That means we needed to increase the terminals capacity.”
Among the enhancements in process at KFTL include he extension of the wharves, the purchase of quay cranes and the dredging of water depths to 15 and half meters at the wharves and the in the channels. The terminal has also migrated to the use of the latest Navis port operating system.
Once the enhancements are finished and the port’s performance has improved, Farhat expects other liner services such as Mediterranean Shipping Company and Maersk to begin offer services at Kingston.
“Once we achieve what we want, we won’t have to go after them,” said Farhat. “They will come to us for better turnaround.”
Grantley Stephenson, CEO of Kingston Wharves, wants to transform the port into the Singapore of the Western Hemisphere as far as transshipments go. The expanded Panama Canal will help in that effort, he insisted.
“Shippers can save four days getting cargo from to the United States east coast” versus transporting it by land from west coast ports,” Stephenson said. “Time is money.”
Kingston Wharves is investing $180 million in a logistics center which will include an auto processing facility that will sit on 80 acres when complete and a 300,000 square-foot warehouse that will include 100,000 square feet of refrigerated and chilled space.
Stephenson sees auto processing as a major potential growth area for his company and as a job creator for Jamaica. He envisions Kingston wharves’ auto center as a hub for preparing vehicles for consumers throughout the Caribbean and Central America.