Logistics hub could be a winner or loser

Edward Seaga, Contributor

There is much expectation of big benefits from the logistics hub project which is to be set up in Jamaica. Only three major logistics hubs exist worldwide: Singapore, Dubai, and Rotterdam in the Netherlands. All three are a source of great prosperity to the countries in which they are located. In Jamaica, it is likely that some of the benefits will flow to the country and its people.

A logistics hub is a location to which goods and services from other countries are offloaded to supply a network of factories and other commercial services or forwarded to other countries for their use. Transport is by sea, road/rail, and air.

There is no rocket science involved in this operation. It is a straightforward procedure to receive and sort goods according to where they are to be delivered or forwarded to ensure that receipt and delivery take place.

We already have in Jamaica companies which do this: the international courier services of UPS, Fedex and DHL. The difference is that their cargo comprises letters and manageable packages that are smaller items, whereas the logistics hub handles sizeable types of goods, raw materials, commodities and petroleum.

Advanced systems

The key to success in the operation of the hub is to ensure that there is no failure or mix-up in the delivery and transport of all goods received or produced. Errors are to be avoided at all cost, which means that sophisticated administrative and technical systems to receive and transport goods must be used to simplify the work process for workers to operate.

It is by this process that a great deal of employment, thousands of jobs, can be created. The problem Jamaica faces is how many of these employees will be Jamaicans; if the skills do not exist locally, foreign workers will have to be employed.

The learning process to master all the skills required, although straightforward, must not be taken for granted as easy operations. Since accuracy is the goal, much emphasis has to be placed on the specifics of focusing on the job and compliance with instruction. Jamaicans, although generally unsystematic in their lifestyle, can develop these skills. The problem will be what number of employees will be required and what capacity exists for training.

There are a number of institutions which have the ability to train workers for logistics operations: the University of the West Indies, University of Technology, Northern Caribbean University, University College of the Caribbean, the Caribbean Maritime Institute and HEART. A master plan is needed to rationalise students and training so as to maximise the number of trained personnel Jamaica can provide. Tying all this together is the first logistical hurdle Jamaica will have to face. In fact, it will determine at an early stage how well logistics can be managed by the country.

There is another side to the operation which will be no doubt as rewarding in job creation. I refer to the factories and other businesses for which opportunities will exist for establishment to assemble, produce and supply products. If this is not the case, the grand design of the logistics hub would be nothing more than a container trans-shipment port, requiring a limited expansion of what already exists. This would be a great disappointment.

No organisation

The problem here is that there does not appear to be an organised body charged with the responsibility to search and determine potential interested parties within and outside of Jamaica who would be interested in establishing factories, plants or other commercial businesses to produce in Jamaica products for domestic sale or export from Jamaica.

I have some experience in determining how difficult or simple this would be, judging from the massive logistics operation I had to organise to enable recovery from Hurricane Gilbert in 1988 in three months. There is no time to be lost.

While much has been said about the Chinese involvement in establishing a logistics hub at Old Harbour, I see the possibility of the Kingston container port also becoming involved in a second logistics operation eventually. I base this forecast on what appears to be a desire by the Chinese to completely use Old Harbour for dealing with Chinese goods - transportation, production, and sale of finished goods.

The scale of the Old Harbour project appears to
contemplate establishment of many shops as outlets for local sale as
well as for export. If this is so, the Kingston container port could be
used to provide a second operation for goods from other countries than
China. In such a case, the Fort Augusta peninsula that adjoins the
container trans-shipment port could be dredged to increase the existing
97 acres to 250.

This is possible as the marine depth
chart shows a five-foot depth of sea around the existing land in that
area, making it easy to be dredged. This is as I conceived it in the
mid-1990s. Indeed, much dredging has recently been carried out to create
a large area of land on the other side of the port. The port already
exists and is the largest of its type in the
CARICOM.

If we get our act together, this can be a
most exciting and successful growth project for
Jamaica.

 Edward Seaga is a former prime minister. He
is now chancellor of UTech and a distinguished fellow at the UWI. Email
feedback to columns@gleanerjm.com and
odf@uwimona.edu.jm.