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SPECIAL REPORT: Jamaica

Jamaica-special-report-badge
Jamaica is on the up and up. In this special report, Caribbean Maritime sets out to highlight the many positive developments that are taking place throughout the island and across a range of maritime sectors.

What’s more, the island’s logistics hub ambitions have begun to materialize as Jamaica highlights its central Caribbean location and builds on its long-standing advantages – highly developed local shipping expertise together with a skilled and educated workforce.

Jump to topic:

> INTRODUCTION
> KINGSTON CONTAINER TERMINAL
> KINGSTON WHARVES LIMITED
> CRUISE - PART 1
> CRUISE - PART 2
> SHIPREPAIR
> JAMAICA LNG
> BUNKERS
> LOGISTICS


 

INTRODUCTION

Maritime sector widens its horizons

jamaica introduction

These are exciting times for Jamaica. After many years of sluggish development, missed opportunities, political upheavals and the feeling among many Jamaicans that better opportunities lay elsewhere, there is now a real sense of optimism.

This is particularly true in the maritime sector, where Jamaica really has got its skates on lately. The government has given its backing to a Logistics Hub Initiative (LHI) and the island is fully capitalizing on its natural advantages in terms of its location, with new benefits accruing from the enlarged Panama Canal.

Across the maritime sector there seems to be a positive story to tell:

  • Jamaica enjoyed a record number of cruise passengers in 2016
  • Bunker sales are on the up
  • The Port Authority of Jamaica (PAJ) is upgrading secondary facilities
  • A new shipyard is planned for Kingston • Sites for logistics hubs have been identified
  • The first liquefied natural gas (LNG) shipment has arrived and work on a new gas terminal is under way
  • The ship registry continues to grow in stature
  • Alumina exports have resumed from some ports.

This is all unalloyed good news. But it is, perhaps, the LHI that is most germane to the government’s growth strategy. Its bold aim is to become the logistics hub of the Americas, emulating the likes of Dubai and Singapore.

The first 42-acre logistics base and free zone has been created in Spanish Town. A second is in the offing and is likely to be an air cargo hub at the former United States air base at Vernam Field.

Hived off
Then there’s the PAJ, which has hived off Kingston Container Terminal to Terminal Link, a subsidiary of the French operator CMA CGM. At the same time, Kingston Wharves Limited (KWL) continues to pick up awards and demonstrate that there is still room in this world for a truly multipurpose terminal operation.

And it was Grantley Stephenson (left), KWL chief executive and immediate past president of the Caribbean Shipping Association, who distilled Jamaica’s tremendous potential in just one sentence. He said last year: “Jamaica has one of the most strategic locations anywhere, comparable perhaps only to Singapore.”

And, of course, he is right.

 


 

 

 

KINGSTON CONTAINER TERMINAL

Kingston gears up for new Panama traffic

Jamaica-Kingston-Containers

The Port of Kingston is being expanded and upgraded as it battles with other Caribbean hubs and would-be hubs for a share of the additional trade and larger ships being generated by the newly expanded Panama Canal.

Mariel, Caucedo and perhaps eventually Ponce may also want a slice of this business, but Kingston is determined to be the region’s pre-eminent port, with the capacity and draft to handle neopanamax vessels (Kingston is currently the seventh-largest gateway in the Caribbean and Latin America*).

Concession
A major step in this direction came with the concession in 2015 of Kingston Container Terminal to Kingston Freeport Terminal Ltd (KFTL), part of the CMA CGM subsidiary Terminal Link, under the terms of a 30-year design, build, operate, transfer (DBOT) finance concession.

Under the scheme, KFTL is duty bound to deepen the port’s navigation channel to provide access to vessels of up to 14.2 meters draft, to broaden its turning circle and to upgrade some of the 1,200 meters of quay. Moreover, the operator is expanding KCT’s annual throughput capacity from 2.8 million to 3.2 million teu. The dredging and quay upgrading contract was won by the French company VINCI Construction Grand Projets working alongside Belgium’s Jan De Nul.

The program is expected to cost US$ 452 million – funded mostly by loans from the Inter-American Investment Corporation (IIC). Meanwhile, the Inter-American Development Bank (IDB) said: “The project will contribute to strengthen Jamaican’s relevancy in global trade and foster private sector activity and foreign direct investment.”

This and the knowledge that Kingston is tied in long-term to CMA CGM’s worldwide liner network, with its strong emphasis on Caribbean and Latin American markets, gives the port a secure base for the expansion.

CMA CGM is also able to lend its experience and expertise to improvements elsewhere, such as the recent introduction of a new port community system by the French firm SOGET.

 


 

 

 

KINGSTON WHARVES LIMITED

KWL moves up to a higher gear

If there is one port that is set to gain from the enlargement of the Panama Canal then it is Kingston. And if there is one cargo handler that has been quick off the mark to capitalise on Jamaica’s perfect location, that company is Kingston Wharves Limited (KWL).

KWL is without question the Caribbean’s leading multipurpose operator – an accolade bestowed on the company no less than five times in the past nine years. The stevedore offers 1,655 meters of continuous quay in Kingston comprising nine berths. And, to achieve and maintain its pre-eminent and award-winning position, KWL has spent over US$ 30 million in the past four years on upgrading its infrastructure, expanding its footprint at the port and buying new cargo handling equipment. In fact, the latest piece in this jigsaw arrived in October when KWL took delivery of an LHM 600 mobile harbor crane – thought to be the biggest of its type in the Caribbean – from German manufacturer Liebherr.

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And KWL is not stopping there. It plans to spend US$ 15 million on a 15,050 square meter logistics complex, due for completion in May. Work is under way to clear space at the site, with a number of warehouses being demolished. The facility is being built by China’s BYD Construction. This logistics complex will specialize in handling pre-cleared barrels of personal effects that are shipped to the island regularly by members of the Jamaican diaspora.

Regional hub
KWL started handling cars for transshipment about five years ago and now Kingston is a regional hub for vehicles bound for 23 destinations in Central America and the Caribbean. Norway’s Höegh Autoliners is a major customer in this respect.

As an example of the sheer multipurpose nature of its operation, KWL now has grain silos and is receiving imports of cereals. The company also handles lumber, steel, sulfuric acid and cooking oil – in fact, in the words of chief executive Grantley Stephenson, “just about anything”.

And as if that weren’t enough, KWL saw a further development in 2016 with the berthing of ‘Monarch of the Seas’, the first cruise ship to call at Kingston for three years. Unfortunately, this was an ad hoc diversionary call rather than one scheduled by itinerary planners. But it did highlight the attractiveness of Kingston as a cruise call and underlined KWL’s ability to handle a large cruise ship as it received the Pullmantur Cruise Line vessel, with over 2,600 passengers, at a hastily prepared Berth 2.

 

Bauxite shipments resume at Port Kaiser

Port Kaiser witnessed its first shipment of bauxite for some time in 2016 as mining operations resumed early in the year at nearby Nain, in the south-west of Jamaica. The bauxite mine and alumina plant, Jamaica’s largest, had been closed since 2009 but had been reopened by its Russian owner, UC Rusal Alpart.

Nain has an annual capacity of 1.67 million tonnes of alumina and 4.9 million tonnes of bauxite.

The reopening of Nain and the shipment from Port Kaiser were part of a welcome upturn in bauxite and alumina exports from various points around Jamaica such as Rocky Point, Port Rhoades and Port Esquivel.

  


 

 

 

CRUISE - PART 1

Cruise sector raises its game

Jamaica’s success as a cruise destination seems to go from strength to strength. Some of this is due to the island’s convenient location – a perfect call for seven-night trips from South Florida.

Jamaica-cruise

By the end of 2016 some 1.66 million cruise passengers had called at Jamaican ports compared with 1.52 million in the previous 12 months – an increase of 6.3 per cent. William Tatham, vice president cruise shipping at the Port Authority of Jamaica (PAJ), told Caribbean Maritime this was a new record.

Even so, Jamaica is still some way behind The Bahamas, Cozumel, the US Virgin Islands and Sint Maarten is terms of numbers.

Historic Falmouth is Jamaica’s ace card and one that Royal Caribbean Cruises has fully supported since the PAJ first suggested that the old port, just 25 km east of Montego Bay, could be restored along with the best preserved of the region’s Georgian towns. This support for Falmouth was clearly borne out late last year when the world’s largest cruise ship, Royal Caribbean’s ‘Harmony of the Seas’, with some 6,400 passengers and 2,150 crew, made its first call.

Attractions
The restoration, development and success of Falmouth and Ocho Rios, with their improved facilities and unique attractions, had left the previous top stop, Montego Bay, in their wake. But the PAJ is now addressing this situation and plans to spend about US$ 100 million over the next 18 months to transform the port into a world-class multipurpose point of entry.

What’s more, Montego Bay has a trump card to play and this is home-porting. Sangster International Airport, just down the road, already has scheduled connections to North America and Europe. According to William Tatham, seven cruise ships have chosen to home-port this season.

Montego Bay is poised to provide an even more attractive base for cruises originating in Jamaica; and the home-porting concept will be central to the port’s ongoing redevelopment.

 

Montego Bay expansion gets under way

An expansion of the port of Montego Bay has been given the green light.

Up until late last year, the go-ahead for the master plan at Montego Bay had been subject to delay and the scheme was in some doubt.

However, Professor Gordon Shirley, chairman of the Port Authority of Jamaica (PAJ), has now confirmed that the scheme will move forward in 2017.

The plan is to create two dedicated cruise berths and construct new cruise terminal buildings to make Montego Bay even more attractive as a home-port, improve the ground transportation staging areas, enhance the container freight station, provide for wet berth repairs, add better lighting and install more reefer points.

A new container and bulk cargo berth will be built, and so will a new fuel berth and storage area.

Another key project at Montego Bay is the construction of an LNG terminal for the United States company New Fortress Energy. This will supply fuel to the nearby Bogue power plant. It was the comparatively late inclusion of this new reception and storage terminal that had delayed the wider development of the port.

It is hoped that the terminal will also be used to supply LNG to visiting cruise ships.

  


 

 

 

CRUISE PART 2

Major upgrade for Ocho Rios

The Port Authority of Jamaica (PAJ) is spending US$ 20 million to upgrade Fisherman’s Beach in Ocho Rios. This is an area between the existing single-berth cruise pier and the multipurpose Reynolds Pier originally built for the export of bauxite.

Reynolds Pier will be improved to serve both the general cargo and cruise ship sectors. Sugar and limestone are exported from the facility. Nevertheless, the sugar loaders will be dismantled so that cruise ships with externally protruding lifeboats can berth.

Jamica-Cruise

As things currently stand, Reynolds Pier is pressed into service when more than one cruise ship calls at Ocho Rios. But the facility is not entirely suitable for this purpose – hence the need to redevelop the area between the town and the pier.

Ambience
The work will create more space for ground transportation at Reynolds Pier while Fisherman’s Beach will become a fishing village attraction. The PAJ envisages the area resembling Historic Falmouth in terms of its ambience and attractiveness to visitors.

The need to make Ocho Rios more attractive to cruise passengers is clear. Despite its close proximity to Dunn River Falls, Ocho Rios has seen a dramatic drop in the number of cruise passengers visiting the port from about 800,000 to only 400,000 passengers per year.


 

 

 

SHIPREPAIR

First step towards full shiprepair center

Jamaica’s ambitions to become a key maritime center took a step in the right direction in November when plans were announced for the creation of German Ship Repair Jamaica (GSRJ), a new shiprepair facility in Kingston.

To start with, GSRJ will deal only with straightforward mobile repairs, but the long-term aim is to build a whole shipyard. It is hoped that these initial wet repairs will allow the new facility to gain the confidence of ship operators while at the same time honing the skills of local workers and technicians as the size and complexity of contracts increase.

Connected
Those behind the scheme believe the proposed dockyard will form an essential part of an effective and highly connected maritime environment that will provide all the services demanded by the industry in one location. The project has the full support of the Jamaican government and this was evident at the launch event, which was attended by ministers and top local officials.

Shiprepair

The aim of the prospective dockyard is to capture business that is local to Jamaica – such as coastal patrol vessels and other government agency-operated craft, together with commercial vessels – as well as other ships calling Jamaica.

As it is, the Port of Kingston receives over 2,000 calls per year by some 400 different ships. Many of these vessels are in need of urgent – mostly minor – repairs and at the same time have to use the full services of a dockyard at least every five years to meet standards of international certification. In this regard, GSRJ hopes to attract business from those owners who currently go to yards in the United States, The Bahamas or Curaçao for minor and major repairs and certification.

The Kingston-based Caribbean Maritime Institute, which already runs shiprepair-related courses, is fully supportive of the yard’s formation and will no doubt be a ready source of skilled employees.

Phase two will involve the installation of a floating dock and associated onshore workshops. The proposed floating dock is expected to accommodate vessels of 150 to 200 meters in length.

 

Existing facility

Until now, the only local repair facility has been Kingston Dry Dock, operated by Jamaica Fruit & Shipping, which is restricted to vessels of about 100 tonnes. 

 

Who owns GSRJ?

German Ship Repair Jamaica is owned by H&P Caribbean Maritime Services Ltd (part of Harren & Partners), Jamaica Dry Dock Ltd and Germany’s Kloska Technik.

Harren & Partners is already deeply committed to the region via its ownership of Caribbean Feeder Services, based in Florida, which moves about 300,000 teu each year annually and operates some 13 vessels.


 

 

 

JAMAICA LNG

Switch to LNG will transform energy sector

As mentioned in previous issues of Caribbean Maritime, the region’s liquefied natural gas (LNG) market is poised for rapid change as many island economies ponder an expensive switch from traditional energy sources to cleaner and less pricey alternatives.

Alongside Puerto Rico and the Dominican Republic, Jamaica has been at the forefront of fuel diversification. It has already committed millions of dollars to convert existing energy generation capacity to LNG and plans to spend even more on constructing new gas plants.

Jamaica’s first shipment of United States-sourced LNG arrived at Kingston last August, but subsequent deliveries have gone directly to Montego Bay.

This followed an agreement with the US company New Fortress Energy to supply the 115 MW Bogue power plant at St James near Montego Bay. Earlier in early 2016 the plant was retrofitted at a cost of US$ 22.7 million to run on clean LNG in addition to dirtier automotive diesel oil (ADO). The plant, which provides about 20 per cent of the island’s daily needs, is operated by the local energy provider Jamaica Public Service Company (JPS).

Jamaica-LNG

Reception
The new LNG reception facility forms part of a wider development of the Port of Montego Bay (see separate article), where the gas is being unloaded and converted prior to use at Bogue. There is also the possibility of supplying LNG to home-porting cruise ships.

Gas imports are being handled by Bermuda-based Golar LNG, which is using the 138,500 cubic meter capacity ‘Golar Arctic’ as a floating storage unit at Montego Bay for this purpose.

Speaking at the launch delivery, Kelly Tomblin, president and chief executive of JPS, said: “Natural gas will play a key role in transforming the energy sector, while supporting industrial development and economic growth. We are definitely on the threshold of great things for Jamaica and the region.”

And since Ms Tomblin’s comments, JPS and Fortress Energy have signed a further agreement to supply LNG to a new US$ 210 million plant of 190 MW capacity now under construction at Old Harbour Bay, St Catherine. And a new LNG terminal and regasification platform will be built on the west side of Portland Bight (not far from alumina export facility at Port Esquivel) to receive these shipments. The plant and terminal should be complete by the second quarter of 2018.


 

 

 

BUNKERS

Bunkering leads way in key services

A key feature of Jamaica’s drive to be a major maritime center is the supply of bunkers – not only for vessels calling Jamaican ports but also for those in transit across the Caribbean.

And bunker supply is already making a positive contribution to the nation’s economy.

The market is competitive locally and Jamaica has three suppliers: Aegean Marine Petroleum Network, Petrotech Marine and West Indies Petroleum (WIP). Jamaica also faces stiff competition from Panama, where some 20 suppliers are based.

As the world’s largest independent bunker supplier, the publicly quoted company Aegean Marine Petroleum has two barges based in Jamaica and supplies fuel to vessels in Kingston, Ocho Rios and Montego Bay

Customers
The Nevis-registered company Petrotech Marine operates as Petrotec Bunkering (JA) in the local market. Using a double-hull barge of 4,738 cubic meters capacity, Petrotec Bunkering mainly serves Kingston, but the barge is available to supply fuel at all ports around the island. In particular, there are plans to supply cruise vessels and other potential north coast customers. Furthermore, a third bunker barge will be added to the Petrotec fleet to bolster operations in Kingston.

Jamaica-Bunkers

The most recent entrant to the local market is WIP, which owns and operates tug/barge units and uses road tankers to supply fuel at ports across the island.

Locally owned WIP has bases in Port Esquivel (a tank farm acquired in mid 2016 from Jamaica Broilers Group) in the south and Ocho Rios in the north. The company has two tug/barge units stationed in Kingston and supplies about 200 vessels a year, but is planning to increase capacity. WIP supplies various grades of heavy fuel oil (HFO) as well as marine gas oil (MGO) and ultra low sulfur diesel (ULSD).

In fact, Jamaica is regionally competitive in terms of its pricing of IFO 180 intermediate fuel oil and MGO, but not necessarily so for other grades.

A recent study has suggested that bunker volumes will hit 1.9 million tonnes per annum by 2025, but only if the government introduces the necessary legal and administrative framework. By comparison, only 220,000 tonnes of fuel was supplied in 2012.

Further down the track, there is the possibility of liquefied natural gas (LNG) bunkering at Montego Bay. This comes as more cruise ship operators opt for LNG-powered vessels (either new or retrofitted) and as a new gas terminal takes shape at the port in association with the United States’ New Fortress Energy project.

Bunkering is a key element of the Logistics Hub initiative being promoted by the Maritime Authority of Jamaica.


 

 

 

LOGISTICS

Familiar name is core logistics provider

Widely held Jamaica Producers Group (JP) is part of Jamaica’s history and its familiar yellow-and-green logo is part of the everyday life of many Jamaicans, at home and abroad.

But behind the history and the otherwise low-ish profile is a highly successful business – one at the very heart of Jamaica’s maritime and freight sectors.

Its long pedigree disguises a diversified, modern operation. In fact, JP is much more than a freight operator; earning over half its income from food and drink products rather than being concerned only with shipping and logistics.

Yet as part of its shipping and logistics division, JP is a key shareholder in Kingston Wharves Limited (KWL) and has upped its stake in the multipurpose terminal operator over recent years. Chief executive Jeffrey Hall said KWL was treated, for accounting purposes, as a subsidiary of JP; but he added: “JP is satisfied with its current holdings of KWL and has no plans to reduce or increase its shareholding.”

Jamaica-Logistics

The company has performed well in recent times. JP enjoyed a solid performance in 2016 with a particularly strong result in its shipping and logistics businesses. Mr Hall told Caribbean Maritime: “Our logistics business will continue to grow and diversify and now includes warehousing, port terminal operations, shipping and maritime security.”

Logistics
Beyond Jamaica, JP Shipping Services is at the heart of the logistics division and was initially established to serve the needs of the Jamaican banana industry for shipping and logistical support within the United Kingdom. Over the years it has used this experience to develop and expand its activities in the UK.

Moreover, with more than 20,000 customers making use of its forwarding and packing services worldwide, JP is the leading import and export company to and from the Caribbean and the rest of the world.

As well as providing businesses with reliable UK import and export freight forwarding services, JP serves individuals who are looking to relocate or move personal effects. In addition, JP offers packaging services that include barrels, drums and cartons along with comprehensive marine insurance.

Since buying the UK company in 2008, JP’s trading division, London-based JP RAM Shipping, has been serving the general public to and from the Caribbean, specializing in the movement of personal effects. Using its own fleet of vehicles in the UK, this full-service operation even delivers drums and barrels to homes for collection at a later date; or drivers can wait while packing takes place. In addition, JP RAM offers a worldwide personal effects service.

INBOUND
In general, though, inbound cargo consists mainly of motor vehicles and machinery and equipment, while outbound cargo is mostly food and drink products on behalf of leading Caribbean companies.

JP offers a weekly full container and less than full container service from the UK and Europe to both Kingston (13-day transit time) and Montego Bay and an only slightly less frequent service to other ports throughout the Caribbean. Said Mr Hall: “We collect from anywhere in Europe or receive it at our dedicated warehouse in London where we load the containers.”

 

Origins of Jamaica Producers

Jamaica Producers can trace its roots back to 1925. It became a shipping company in 1931 as the Jamaica Banana Producers Steamship Co and the owner and operator of four reefer vessels. This was Jamaica’s first 100 per cent locally owned shipping line and today it has a wide and diverse shareholder register.