10th Caribbean Shipping Executives Conference, Pointe-a-Pitre (Guadeloupe), May 16-18 2011
Prospects for the Caribbean as a Gateway to North America
Jean-Paul Rodrigue
Associate Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
ACADEMIA: DON’T KNOW MUCH AND DON’T GET NO RESPECT
(At least we’re not economists…)
Words I Promise not to Utter…
■ Bullshit■ Crap■ WTF■ Bitch■ Pot smoking■ Confused■ “Supercalifragilisticexpialidocious”
Main Export-Oriented Regions and Shipping Routes Servicing North America
Intermodal (60%)
All Water (40%)
Western Canada (5%)
Pacific Northwest(20%)
Pacific Southwest(75%)
Mexico(?%)
Via Suez (5%)
Via Panama (95%)
Pacific Asia / American East Coast
CRB Index (CCI), Monthly Close, 1970-201119
7019
7119
7219
7319
7419
7519
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8019
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1020
11
0
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Paradigm shift in input costs…Reaping the consequences of monetary policy.
West Texas Intermediate, Monthly Nominal Spot Oil Price (1970-2011)
Jan-70
Jan-71
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0
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120
140
This is also going to propagate along supply chains.Steaming, slowly…
At the Crossroads… Which Value Proposition for the Caribbean?
- +
4) Last segment in import-based supply chains
1) Strong margins, but many not large enough to justify full dedicated services
2) Interlining between the America’s coastal systems
3) East coast capacity issues
The North-American Container Port System and its Multi-Port Gateway Regions
San Pedro Bay
Northeatern Seaboard
Puget Sound
Southwestern Seaboard
Pacific Mexican Coast The Caribbean Gateway?(RIMS)
GatewayEntry
Load changeClearance
Gulf Coast
Southern FLorida
Conditions suitable to the formation of a “Caribbean Gateway System”
Transshipment
Logistics and foreign trade zones
Information systems integration
Safe and secure customs pre-clearance
Harmonization of trade relations
The Transshipment System
The Insertion of Intermediate Hub Terminals
Hub-and-Spoke Relay Interlining
85% of Transshipment Traffic 15% of Transshipment Traffic
Major ports and future terminal developments in non-EU Med ports: impact of a changing political landscape?
Container throughput in million TEU, capacity extensions in million TEU
Ambarli (Turkey)Traffic: 2.26 (2008)
Mersin (Turkey)
Haifa (Israel)Traffic: 1.39 (2008)
Beirut (Lebanon)Traffic: 0.95 (2008)
Port Said (Egypt)Traffic: 3.2 (2008)Capacity: +2.5 (2011)
Damietta (Egypt)Capacity: +4 (2012)
Misurata (Libya)Initial plans cancelled?
Enfidha (Tunisia)Capacity: +1 (2011)+2.5 (period 2011-2015)+2 (period 2015-2030)Rades (Tunisia)Traffic: 0.3 (2007)
Djendjen (Algeria)Capacity: +2 (DP World)Bejaia (Algeria)
Traffic: 0.15 (2008)Capacity: +2.5 (>2010)
Algiers (Algeria)Traffic: 0.5 (2007)
Capacity: +0.8 (2010)
Tanger Med IIAPMT/Akwa: + 3 mln TEU (2012)PSA: +2 mln TEU (2012)
Tanger MedAPMT: + 1.5 mln TEUEurogate: +1.5 mln TEU
Source: Notteboom (2009)
Transshipment Corridor
Tanger Med: The Cartagena of the Mediterranean…
Conventional
NorthAtlantic
CentralAtlantic
South Atlantic / Gulf
Direct
Transshipment Circum-Equatorial
NorthAtlantic
CentralAtlantic
South Atlantic / Gulf
CaribbeanTransshipmentTriangle
NorthAtlantic
CentralAtlantic
South Atlantic / Gulf
The Caribbean Transshipment Market: Triangle or Corridor?
Location (+)Depth (=)Land (=)Costs (+)
Hinterland (-)Ownership (+)
Possible Options in the Development of a Transshipment Hub
• Location and costs advantages• Dependent on shipping companies and global
terminal operators
Pure Transshipment Hub
• Logistic zones and inland load centers
Hinterland Gateway
• Port-centric logistics zones• Gateway to a regional freight system
Foreland Gateway
The Big Port Squeeze: Largest Available Containership, 1970-2011 (in TEUs)
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
L “Lica” Class(3,400 TEU)
R “Regina” Class(6,000 TEU)
S “Sovereign” Class(8,000 TEU)
E “Emma” Class(12,500 TEU)
Pushing Atomization in the Hinterland and Massification in the Foreland
PORT FORELAND
PORT HINTERLAND Different momentumsEconomies of scale
Functional Integration
Hinterland-Based Regionalization
Foreland-Based Regionalization
Atomization
Massification
Capacity Frequency
CapacityGap
Economies of scale
FrequencyMitigation
The Insertion of an Intermediate Hub as a Gateway
FORELAND
HINTERLAND
Inland Terminal
GATEWAY
Main Shipping Lane
INTERMEDIATE HUB(Caribbean)
A Taxonomy of Logistic Zones
Port
Port-Centric
A
Intermodal Industrial Park
Inland Port
Freight Village
Industrial Park
B
A) Inland terminalB) Freight services
Corri
dor
Port Centric Logistics Zones: The Search for Added Value
Port Terminal On-Dock /Near Dock Rail
FTZ / Manufacturing
Container Depots
Consolidation / deconsolidation
Transloading
Postponement
The “Terminalization” of Logistics
• Terminal as a constraint• Rational use of facilities to maintain operational conditions• Storage space, port call frequency, gate access• Volume, frequency and scheduling changes
Bottleneck-Derived
• Terminal as a buffer• Incorporating the terminal as a storage unit• “Inventory in transit” with “inventory at terminal” • Reduce warehousing requirements at distribution centers
Warehousing-Derived
Terminalization
Panama Canal Expansion and Supply Chain Differentiation: Pick Your Preference
Costs (38%)Stability of the cost
structure.Relation with the cargo
being carried.Lower costs
expectations by the Panama Canal
expansion.
Time (12%)Influence inventory carrying costs and
inventory cycle time.Routing options in relation to value /
perishability.No/limited time changes
with the expansion.
Reliability (43%)Stability of the
distribution schedule.Reliability can mitigate
time.AWR has a reliability
advantage.
Comparative Advantages in Supply Chain Preferences: A Complex Balancing Act
$2,300$2,110
Vancouver
Los Angeles
Houston
New York
Montreal
$1,300$2,100
InboundOutbound
$2,620$1,400
$3,510$2,560
$3,700$1,830
$4,040$3,950
Inbound rates: function of distanceOutbound rates: function of trade imbalances
Time
Costs
Reliability (?)
Shipping Rate from Shanghai for a 40 Foot Container, Mid 2010
RIMS as an IT Triangle: Key Information Technology Drivers in Freight Distribution
Freight Visibility (tracking)
Improve the reliability of supply chain management.Status and locations of shipments (vehicles, rail cars, containers and individual loads).Mobile communications and Global positioning systems (GPS).Radio-frequency identification (RFID) tags and bar codes.
Asset Management Maximize equipment utilization.Equipment location (tractors, trailers, rail cars, containers, ships).Real Time Locating Systems (RTLS; GPS and RFID tags).Status monitoring of vehicle and cargo conditions.
Efficiency Improvements
Improve productivity and reduce errors in data transmission.Verification and exchange of shipment information.Non-intrusive inspection and information technologies such as optical character readers (OCR), RFID tags and bio-metrics (to identify drivers).
Freight Information Exchange
Information exchange using web-based technologies and electronic data interchange (EDI). Real-time terminal information systems.
Regulatory Compliance
Pre-screen loads and direct low-risk freight to quick clearance.Enhance security at international borders.Electronic pre-notification of shipment information.
Conclusion: The Caribbean Looking Beyond Transshipment
1• Gateway function an option for the Caribbean
transshipment triangle
2• Economies of scale both changing the
hinterland and the foreland
3• Convergence of suitable conditions
(Transshipment, logistics, IT, customs, trade)
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