Transshipment cargo volume for January to July 2013 stood at 4.49 Million Metric Tonnes. This represents a 9% decline over the same period in 2012. More worryingly, transshipment cargo stood at a mighty 7.65 Million Metric Tonnes only two years ago, meaning our transshipment cargo volume has declined by 40% in only two years.
This seems like the “new” normal for transshipment cargo volumes:
A TEU is a twenty-foot equivalent unit or a twenty-foot container. 2 TEUs would therefore be equivalent to a forty-foot container, the more common one we see at the wharves.
DiGJamaica would like to be clear: Our researchers are not privy to the monthly amount of TEUs, only the volume of cargo in metric tonnes.
Let’s take a look at our largest shipping partners as per the Port Authority of Jamaica’s 2011/12 Annual Report and their respective place in the world of shipping:
Since Kingston is, in essence a container port, logic dictates that lower transshipment cargo volumes would equate to less TEUs being transshipped, even if we became a port for the handling of empty containers (see Balboa, Panama).
The research shows from the above that are no major Chinese players in the Jamaican shipping market.
This brings us to the potential of the logistics hub being proposed for Goat Islands and its environs. 3,000 acres is approximately the size of Hampden sugar estate in Trelawny. Although this is small, relative to other sugar estates (Appleton – 11,000 acres, Worthy Park – 10,000 acres, Frome – 30,000 acres) 3,000 acres represents a significant plot of land, enough to run a sugar estate.
The question is: why is China so focused on investing in a Jamaican shipping hub? Freeport Container Port, Bahamas (owned by Hong Kong company Hutchinson Port Holdings) already has a capacity of 1.5 million TEUs with plans to expand to 3.5 million TEUs. Hutchinson Port Holdings also owns the port in Hong Kong, the third busiest container port in the world.
Meanwhile, Colon (Panama) has expanded its facilities tremendously with some US$650 million in improvements over the last decade through investments from Seattle, USA based SSA Marine, Hutchinson Port Holdings and Taiwan based Evergreen Shipping. In 2012, Colon handled more than 3.5 million TEUs. Continued expansion of Colon would make it almost redundant to stop in Jamaica or Freeport unless there was an underlying motive.
DiGJamaica does not often speculate, but our research leads us to believe that the rise in the number of Chinese ports (China is the world’s largest exporter) and the accompanying increase in Chinese shipping lines, in combination with Jamaica’s history of cooperation with China and it’s people has something to do with China’s interest.
To put it in perspective, 6 of the top 10 busiest container ports in the world are in China (including Hong Kong), with #10 Tianjin handling 12.3 million TEUs in 2012. This compares to Kingston’s 1.6 million TEUs in 2011/12.
The Logistics Hub project and the expansion of the Kingston Container Terminal would give China a massive footprint in the Caribbean. Shipping lines that would benefit include COSCO (5th largest fleet in the world), CSCL (9th largest fleet) and OOCL (11th largest fleet).
The probability of these shippers forming alliances and consolidating routes to make their stops more efficient is increasing. In fact, an alliance was recently formed called the G6 Alliance among Hapag-Lloyd, NYK Line, Orient Overseas Container Line, American President Lines, Hyundai Merchant Marine and Mitsui OSK Lines. DiGJamaica found that of G6’s routes, only 1 out 6 comes through Kingston (none go through Freeport).
Maersk, Mediterranean Shipping Company (MSC) and CMA CGM have recently agreed to form an alliance with the intention of curbing overcapacity on container routes and increase shipping costs. These are the the three largest shipping lines accounting for 33% of the world’s TEU capacity.
With Maersk’s having a terminal in Miami, and as the largest of the alliance, Jamaica can only hope CMA CGM still sends as much business our way if the Chinese come around.
The future of shipping lies within alliances, port operators, shipping allegiances and most importantly wharf space. Goat Islands may just be the tip of the proverbial iceberg. The people of Jamaica can only hope that the line between development and sustainability is clearly defined. Economic growth does not have to come at the full expense of the environment and ecosystem.