Introduction

Slide 1 - Title Slide – : Forging a new era of Interconnection,

transportation and logistics in the Caribbean Basin
Good afternoon. Let me begin by thanking the Caribbean
Export Development Agency for the invitation to participate in
this very important knowledge sharing session…and a special
thank you to its key partners.
Slide 2 -
With an estimated 90% of the world’s trade being conducted
by sea, and the volume of overseas trade projected to increase
to 19 billion tons by 2030, The Caribbean is at an ideal
juncture to benefit from this growth.

Slide 3 -
Transportation and logistics are recognized to be crucial
components in supporting economic activities as well as
providing opportunities for economic development. Realizing
the sectors relevance and importance, many governments
throughout the region are now focused on upgrading or
developing supporting infrastructure.
Slide 4 -
In recent years, the Caribbean has experienced significant
growth in containerized traffic handled, driven in large part by
the development and expansion of port infrastructure.
Within this new environment, and in anticipation of additional
traffic growth resulting from the expansion of the Panama
Canal, development of the transportation and logistics
services sector must now be seen as a critical endeavour.
Slide 5 -
To date, the region has seen billions invested in infrastructure
with 100’s of millions currently planned in new investment.
Slide 6 -
However, for many countries in our community, transport costs
are still to high, and can be viewed as a deterrent to intra-
regional trade.
In fact, these costs are considerably higher than those of our
major trading partners, which makes us less competitive.
According to the World Bank, regional logistics costs is
estimated to be between 16% to 26% (as a percent of GDP) in
comparison to the Organisation for Economic Co-operation
and Development (OECD) benchmark of approximately 9%;
additionally, these costs typically represent as much as 35%
of the product value, and even more for smaller enterprises,
compared to 8% in the OECD countries and 10% in the USA.
Furthermore, delays in customs clearance throughout the
region have the effect of increasing transport costs by an
additional 4% to 12%.
Slide 7 -
While transport infrastructure remains a fundamental
component of economic development strategies, the policy
approach must be expanded to consider the requirement of
freight distribution for the global economy.
This means that current expenditure on transport
infrastructure capacity is likely to have limited and only
incremental value within the economy if it is not supported by
appropriate levels of efficiency and innovation in freight-driven
transport services.
Slide 8 -
Given the region’s reliance on natural resources and proximity
to the world’s largest markets, we must be mindful that the
competitive advantage touted by proximity can easily be
overcome if logistics in the region does not keep pace with that
of its competitors. This is especially relevant to countries like
the Bahamas located a mere 55 miles from the US east coast.
Slide 9 -
Some of the major challenges impacting the transport &
Logistic sector in the Caribbean are:
1). The Caribbean’s fragmented and individualistic approach
towards sector development
2). A lack of investment in supply chain management &
logistics that can lead to greater efficiency
Slide 10 -
3). Limited connectivity options offered intra-regionally. There
is growing concern that trade volumes throughout our
community are not where they should be when compared to
other trade communities. It is therefore imperative that the we
find creative ways, including new policy frameworks, to
improve Linkages. A few examples to consider are:

o Air services and port agreements that would

reduce airport/ seaport fees for intraregional
carriers
o Better trade facilitation and cooperation within
our community to help foster a greater demand
for intraregional carriers
Slide 11 -
4.) We must address the issue of Skills or knowledge gaps.
Grenadian, Roland Malins-Smith, drawing on decades of
regional shipping experience, said it best when he stated that
we must find a way to be more involved in the industry from a
decision-making capacity. In order to acheive this, he stated
that “We cannot rely fully on outside interests, particularly
from an intraregional perspective. We have both the means
and the capacity— we need to be more self-sufficient,”
President and executive director of the American Caribbean
Maritime Foundation, also echoes the need to “develop a
cadre of maritime professionals and workers in port
management, logistics, engineering, and other maritime
service areas,” in order to overcome stumbling blocks that
often result in the outsourcing of management and decision
making to outside interests.
Slide 12 -
5). And of course as a region, we face the annual threat of
Natural Disasters stemming from hurricanes.
Our region is extremely vulnerable to climate change and
natural disasters, that can lead to damages surpassing the
(GDP) of some small Caribbean nations. Natural disasters cost
the region an estimated $8.6 Billion between 1996 and 2015.
Since then, major hurricanes including Irma, Matthew and
Maria in 2017 caused even more damages. Investing to
prepare for climate change and natural disasters is critical for
regional resilience and the reduction of human and economic
costs.

Slide 13 -
Recommendations:
Moving forward, we must ask ourselves “How can the
Caribbean basin develop a growth strategy around transport
and logistics infrastructure;
Here are a few recommendations:
 a. Establish Trade Agreements with our largest trading
partners
i. For example, the Value Addition option offered
under the Caribbean Basin Initiative that provides
for a Change in the classification of a product to
one made within the region – can help to
circumvent some of the import tariffs certain
companies are experiencing as a result of trade
wars.
b. Establish Intraregional service agreements to reduce
costs for local carriers
Slide 14 -
c. Explore the concept of attracting European or Asian
based factories to set up Nearshore distribution
facilities to create Just in Time Inventory solutions
Slide 15 -
d. Invest in digitalization and innovation to help;
i. - simplify processes,
ii. - redesign services, products and business models
and
iii. - reduce the impact of talent gaps.
Slide 16 -
e. And lastly, there should be a renewed focus on Public
Private Partnerships (PPP) to encourage greater sector
development. ( e.g. Harbour Dredging Bartar System –
 Bahama Rock, and Donate crown land/seabed – Get a
cruise Port/ Carnival/GBPA/Gov’t)

Slide 17 -
The approach to production, trade and transportation has
evolved, and the challenge now facing the Caribbean is how to
connect to global supply chains and maximize the
opportunities from global trans-shipment hubs.
Slide 18 -
There are currently 163 cargo ships with a capacity over
10,000 TEU - but 120 more are on order. As a port that already
has the infrastructure to accommodate post panamax vessels
and can be considered a purely transshipment hub – Freeport
Container Port is a nearshore Container Transshipment Hub
that the region should find a way to capitalize on and Benefit
from.

Thank you.