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About this logistics hub

The expansion the Panama Canal is expected to be completed by 2015. With this in mind, Caribbean islands, including Cuba, Dominican Republic and Jamaica, have been putting plans in place to expand wharves and port facilities, transforming them into key logistic hubs to take full advantage of their strategic location in the Caribbean basin.
What is a logistics hub?
According to a report prepared by the Euro-Platforms group, a logistics hub is a centre or specific area designated to deal with activities related to transportation, organisation, separation, coordination and distribution of goods for national and international transit, on a commercial basis by various operators.

These operators may own, lease or rent the buildings and/or the facilities of the hub. These include warehouses, storage areas, distribution centres, offices, trucking and shipping services.

The hub must be equipped with facilities necessary to carry out the above functions. Also, to ensure synergy and commercial consistency, it is best if the logistics hub is managed by a single, neutral legal body, preferably under a partnership between government and private interest.
What are the key features of a logistics hub?
A successful logistics hub must have two main elements:

1. Territorial planning alongside infrastructure rationalisation. This is necessary to fully utilise the area dedicated for the hub and to safeguard the environment by moving the traffic from residential areas to the hub, and building infrastructure to meet the specific needs of the operations.

2. High transport quality. To remain competitive, this is a necessary component of the hub. With globalisation, other countries are also preparing logistic hubs. Growing industries constantly need the most efficient transport and logistic solutions. This means minimum bureaucracy in an environment where it is easy to do business, a formula that Jamaica cannot find, considering the country ranks very low on the world doing business index.

The logistics hub must also control any transport costs, industrial costs, personnel costs, increase transport operations total turnover and maintain industrial productivity competitiveness.

The hub must seek to optimise the logistics chain, optimise truck and warehouse utilisation and provide optimal manpower organisation.
What are the activities of the hub?
The company managing the logistics hub is required to carry out the following:

1. Define the layout of the logistics centre, including; customs infrastructure, postal, bank and insurance services, office layout and structures, intermodal terminals, warehouses and other services.

2. Define the infrastructure needs; road connection, port connections and railway connections, if necessary.

3. The management of the hub is responsible for investment and development planning and the overall layout of the centre.

4. Once they lay out the plan for the hub properly, the management company is responsible for constructing the infrastructure and making arrangements for renting, leasing and selling activities.

5. The management is also required to oversee the administrative, financial, commercial and operations management of the hub, and upkeep and maintenance of the communal property.
What about the infrastructure and services?
The most important infrastructure are the warehouses and intermodal terminals. The warehouses are where the transport operators mainly carry out their businesses. There are different type of warehouses, depending on the type activity and freight handled by the transport operators.

General warehouse for storage, large warehouse for logistics activities, warehouse connected to goods transportation, warehouses with raised dock bays and air-conditioned warehouses. The intermodal terminals provide access to intermodal transport services, ensuring an efficient and competitive transportation and dispatch from the hubs. Services will be the core of the hub since it is built mainly to handle all activities related to freight movement. Therefore, the correct services are required to complement the infrastructure.

Some of the vital services provided by good logistic hubs are customs district, post offices, bus services and public telephones, areas for parking, loading and unloading, restaurants, cafes and vehicle-cleaning facilities.
Is Jamaica on the correct path?
The Kingston Wharf acts as a logistics hub on the island. With two years remaining for the widening of the Panama Canal, Jamaica has two years to expand its ports and recreate this hub.

The Jamaican logistics hub is still in discussion phase. The government and private interests from the Middle East are putting plans together to create the world class-logistics hub infrastructure needed in Jamaica to compete with those of the Dominican Republic and Cuba.

Training for those who will provide the services is the key element of the logistics hub, and this has not yet begun. It makes us wonder if two years is enough to fully equip the staff with the service-sector skills necessary for Jamaica to follow through with these plans effectively.

Dr André Haughton is a lecturer in the Department of Economics on the Mona campus of the University of the West Indies. Follow him on Twitter @DrAndreHaughton; or email editorial@gleanerjm.com.

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About this logistics hub - The expansion the Panama Canal is expected to be completed by 2015.With this in mind, Caribbean islands, including Cuba, Dominican Republic and Jamaica, have been putting plans in place to expand wharves and port facilities...

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PRIME Minister Portia Simpson Miller has warned that undue delay in deciding on the location for the proposed logistics hub by the Chinese might see Jamaica losing out as investors look elsewhere.

"I am conscious of the fact that Jamaica needs an economic game changer to lift us out of the inertia in which we have been stuck. An opportunity lies in our ability to rapidly improve our physical infrastructure and to exploit the benefits of our strategic location. This is something we have to leverage to the maximum extent possible," Simpson Miller told yesterday's Economic Reform Programme Stakeholders Conference at the Jamaica Conference Centre in downtown Kingston.

China Harbour Engineering Company (CHEC) has pinpointed the Goat Islands as its first choice for the proposed development of the trans-shipment port and economic zone under the Global Logistics Hub Initiative, causing some amount of consternation about the environmental impact of such a move. The proposed investment of approximately US$1.5 billion would enable Jamaica to benefit from the anticipated increase in maritime activities from the expansion of the Panama Canal, scheduled to be completed in 2016.

However, the Government on Wednesday announced that it would not be making any decision on the development of Goat Islands until a study commissioned by the Port Authority of Jamaica on the environmental impact is completed and assessed. The study is expected to be completed this month-end.

According to the prime minister, in recognition of the restricted fiscal situation that will obtain for the near future, the country must seek ways of attracting investment.

"If we are successful in exploiting this potential we can in the short term create employment in construction and in a wide variety of activities," she said.

"But there are some things we must take into account first, whilst we may be well placed in terms of a strategic location, we are not the only country in the region interested in becoming a logistics centre and, as time is of the essence, no one is going to wait around for us," Simpson Miller warned.

She said while "these activities may have some environmental footprints" the country will have to do its "best to contain and make their impact minimal".

"If we were not strong and took the right position we would never have had the Norman Manley International Airport or the Sangster International Airport, Newport West, the National Stadium or a number of housing schemes," the prime minister told the huge gathering of business interests.

In the meantime, noting that "we need to be mindful of all of these things", she said "if we are to achieve economic growth, we need to reduce poverty, simultaneously put in good infrastructure and address major environmental issues like the disposal of sewage".

The prime minister has in the meantime "reaffirmed to both the domestic and international markets the firm commitment of the administration to steer the course in terms of the adjustment measures we have put in place [as a requirement] of the Extended Fund Facility with the International Monetary Fund".

"My administration entered into this agreement fully aware of the drastic measures which had to be taken to address the problem of our unsustainable debt to Gross Domestic Product ratio and to stabilise our balance of payment," she noted.

She said there were four immediate challenges to addressing these goals: mainly, reducing debt, achieving appreciable and sustainable economic growth and job creation, protecting the vulnerable, and providing a realistic basis for hope for those who carry the brunt of the adjustment burden.

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PM says undue delay might turn off logistics hub investors

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PRIME Minister Portia Simpson Miller has warned that undue delay in deciding on the location for the proposed logistics hub by the Chinese might see Jamaica losing out as investors look elsewhere. "I am conscious of the fact that Jamaica needs an economic game changer to lift us out of the inertia in which we have been stuck.