Logistics Hub

Standard and Poor’s Ratings Agency, on Monday, affirmed the Government of Jamaica’s ‘B+’ long-term foreign and local currency sovereign credit ratings and ‘B’ short-term foreign and local currency sovereign credit ratings and revised the outlook from “negative” to “stable”. S&P’s rating action reflects S&P’s view that Jamaica’s “economic recovery will strengthen, [and] government finances will return to fiscal surplus this year”. S&P further noted that “Jamaica’s commitment to fiscal consolidation fosters macroeconomic stability….and supports the country’s creditworthiness” The outlook revision to “stable” is based on S&P’s analysis that the government’s finances will continue to improve which will lead to the continued reduction of economic and financial risks caused by the pandemic, and the expectation that Jamaica’s debt will resume its pre-pandemic downward trajectory. S&P opined that “the institutionalisation of fiscal consolidation policies bolsters policymaking stability and predictability” and “recent changes in the governance and mandate of the central bank have improved Jamaica’s monetary flexibility”. Minister of Finance and the Public Service, Dr Nigel Clarke, in commenting on the rating action said, “We welcome this positive rating action by S&P, which again affirms our credit rating, while revising the outlook on Jamaica up to stable and is reflective of responsive yet disciplined policy choices and of institutional strengthening, even while in a pandemic. We remain committed to prudent policymaking while continuing to pursue reform with ambition.” Source: https://jamaica.loopnews.com/content/sp-revises-jamaicas-outlook-negative-stable

World Expo 2020 Dubai is off to a good start for the Jamaican delegation, following a spectacular opening ceremony on Thursday (September 30). The event, which runs from October 1 to March 31, 2022, is one of the biggest gatherings of nations from all over the world to showcase their products and craftsmanship, while promoting the exchange of technology, trade, and culture. Thousands of persons will descend on the United Arab Emirates (UAE) over the 182 days. Commissioner General of Section, Jamaica Pavilion, Essie Gardner, said the Jamaica team has “hit the ground running”. “The expo is open to the general public from 10:00 a.m. to 10:00 p.m. minimum. In the first hour of opening, we saw over 75 persons passing through the Pavilion. Right now, we have a small team present… but we are expecting other team members to join which would give us the opportunity to see some of the other pavilions in action,” she told JIS News. Jamaica’s pavilion is conveniently located in proximity to one of the main entrances to the Expo, positioned near the main metro line in and out of the Expo grounds. Jamaica Promotions Corporation (JAMPRO) is one of the entities scheduled to join the team already in Dubai and will conduct country business briefings to secure new business partnerships, particularly in the areas of tourism and mining. JAMPRO will also play a key role in the staging of Jamaica’s ‘Country Day,’ which is slated for February, to coincide with Reggae Month. Other agencies that will make up the Jamaican delegation in Dubai include the Jamaica Tourist Board/Ministry of Tourism, the Ministry of Culture, Gender Entertainment and Sport and the Jamaica Special Economic Zone Authority. Ms. Gardner, who attended the official opening ceremony in the Al Wasl Plaza on September 30, said “it was an amazing experience”. “Each country was afforded one invitation… and I was selected to represent Jamaica. The use of technology was amazing. The Al Wasl dome is a giant screen, which allowed the audience to feel a part of the images being shown. We experienced the sensation of being underwater, in the air and on land. It was incredible to see how the setting changed before our eyes, without any interruption in the proceedings. It was a privilege to be present,” she told JIS News. For those persons, who could not attend in person, large screens were set up in the Residence Park of the Expo so that they, too, could view the proceedings. Source: https://jis.gov.jm/world-expo-2020-off-to-good-start-for-jamaica/

KINGSTON, Jamaica — Tourism Minister, Edmund Bartlett, has announced that Carnival Corporation, the world’s largest cruise line, has committed to sending 110 or more cruises, by its various brands, to the island between October 2021 and April 2022. The agreement is contingent on Jamaican authorities and Carnival continuing to work closely on logistics and public health issues. This was announced by Arnold Donald, the CEO of Carnival Corporation, during a meeting on Tuesday with Minister Bartlett, local tourism officials, as well as other senior Carnival Corporation executives. “Carnival is a critical partner for Jamaica’s tourism and wider economic recovery. We are seeing a welcome return of vessels with the recognition that Jamaica’s Resilient Corridors offer a safe environment for our visitors, tourism workers and the general population,” expressed Bartlett. The news comes despite slowing global travel demand triggered by the spread of the Delta variant of COVID-19 and associated issues. The meeting with Carnival forms part of a series of engagements with travel industry professionals in Jamaica’s key source markets, the United States and Canada, including major airlines and investors. This is being done to encourage more people to visit the destination in the coming weeks and months, as well as to encourage further investment in the local tourism industry. Bartlett was joined by the Chairman of the Jamaica Tourist Board, John Lynch; Director of Tourism, Donovan White; Senior Strategist in the Tourism Ministry, Delano Seiveright; and Deputy Director of Tourism for the Americas, Donnie Dawson. The cruise sector was one of the worst hit by the COVID-19 pandemic, which forced it to close for more than a year. However, the sector has progressively resumed operations to several destinations, including Jamaica, thanks to extremely stringent health and safety measures, such as fully vaccinated passengers and staff. “With the return of stop-over visitor arrivals since June 2020, we have been seeing steady growth towards pre-COVID-19 levels and now that cruise is back, we are looking forward to significant growth in our numbers. All requirements have been put in place to meet both United States and Jamaica’s COVID-19 protocols in addition to passengers being limited to moving within the Resilient Corridors,” Bartlett noted. “I must underscore that the cruises have to meet strict measures governing the restart of cruise shipping, requiring passengers over the age of 12 and crew to be fully vaccinated and for all passengers to provide evidence of negative results from a COVID-19 test taken within 72 hours of sailing. In the case of unvaccinated passengers, such as children, a PCR test is mandated, and all passengers are also screened and tested (antigen) on embarkation,” he stressed. Source: https://www.jamaicaobserver.com/latestnews/Carnival_announces_110_more_cruises_to_Jamaica

MBJ Airports Limited, operator of the Sangster International Airport in Montego Bay, expects the long-awaited runway extension project there to start this year, and the major infrastructure work should cost about US$70 million, or $10.5 billion. “The procurement phase for a contractor for the runway extension has been completed, and the preferred contractor will be announced within a few weeks,” said Sharon Hislop-Holt, manager, commercial business development and marketing at MBJ, in response to Financial Gleaner queries. The work is slated to start this year and be completed by the end of 2022, she added. The project, which is several years in the making, was estimated at US$60 million in 2016. The stated source of the funding for the extension at the time was the Airport Improvement Fund, which is financed by fees paid by passengers using the airport. The extension of the runway to about three kilometres (km) would increase safety for aircraft using the facility, while also allowing the airport to attract heavier aircraft. The project, envisaged since 2013, will require land acquisition and realignment of the roadway. The runway currently spans 2.6km and the extension would add some 280 metres of active runway length and an additional 180 metres for a runway end safety area (RESA), according to 2016 documents on the project. The RESA was scoped to span 90 metres on each end of the runway. In total, it would bring the runway length to over 3km, with nearly 2.9km of active runway. The runway extension is part of the airport master plan developed by MBJ. Other aspects include extension and modernisation of the terminal building and additional aircraft parking space. This year, the MBJ expects to spend US$12 million on its retail expansion, US$3.2 million on its three-megawatt solar projects, and US$1.4 million on improving the cooling throughout the terminal. The development and expansion of the departure lounge and retail space, commenced in February 2020 and will result in the expansion of the circulation space in the departure waiting area and retail space. Some of the new shops are already opened, Hislop-Holt stated, while others are under construction with a year-end opening date, a few others in 2022 are to be opened next year. The COVID-19 pandemic and the accompanying hallowing out of revenues at the airport is the latest event to have delayed some of the major capital expenditure and infrastructure works at the Montego Bay airport, in which Mexican airport operator Grupo Aeroportuario del Pacifico, or GAP – translated to English as the Pacific Airport Group – are majority owners. Its minority owners are Canada’s Vantage Airport Group. Data for June to August 2021 show that total international passenger movement declined by one-quarter on 2019, or pre-pandemic, record levels. For instance, for August, total international passengers, which includes all arrivals and departures, was 293,400, or 27 per cent lower than 2019 record levels. In June and July this year, the figures were 27 and 29 per cent lower than 2019 levels, respectively. Still, the 2021 numbers signal a major recovery from the COVID-19 travel shutdown of 2020. For the remainder of the year, MBJ expects the level of travel to remain at 25 to 30 per cent lower than 2019 levels. The sustained travel outlook comes despite new variants of the COVID-19 virus causing serious concern among health officials, the government, the private sector and civil society. “While we do anticipate that the new variants will impact arrivals somewhat, we will have to wait and see how significant that will be,” stated Hislop-Holt. While the pandemic has helped to put a hold on some big capital spending at the airport, its management has been keen to point out that significant infrastructure upgrades have been done during the period. “At the start of the pandemic, we chose to prioritise projects that reduce operational costs, improve operational efficiency and/or provide economic benefit,” MBJ Airport CEO Shane Munroe told the Financial Gleaner in an interview almost a year ago. He noted then that MBJ continued to pursue projects required to maintain the airport infrastructure, such as the rehabilitation of the airfield pavement, replacement of the HVAC chillers, or to achieve operational efficiency, such as the solar PV project. Sister airport Norman Manley International, run by PAC Kingston Airport Limited, PACKAL, which is wholly owned by GAP, has also been negotiating with the government to delay big capital works that are built into their airport lease contract and have become due. Despite seeking a new time line for major works there, PACKAL’s management, like MBJ’s, have insisted that they remain committed to honouring the big infrastructure upgrade commitments. Source: https://jamaica-gleaner.com/article/business/20210922/delayed-10b-sangster-airport-runway-project-set-2021-take

A surge in global demand is having a positive impact for Jamaica as a port of call and trans-shipment hub according to Professor Gordon Shirley, president and chief executive officer (CEO) of the Port Authority of Jamaica (PAJ). The PAJ is working towards reducing logistical challenges which have developed with the novel coronavirus pandemic, with the agency head expressing the conviction that the future augurs well for Jamaica as the country continues its push to become a greater regional trade and transhipment hub. During 2020, Kingston ports saw the highest number of vessel calls as well as container volumes in the month of May. Previously such numbers were only seen in 2016. Professor Shgirley told the Jamaica Observer, “In the global context the COVID-19 pandemic, which started in October 2019 and detected in Jamaica in March 2020, has had a positive impact on supply chains as a result of a boom in global trade due to pent up demand.” This positive impact of the increase in global demand also augured well for Jamaica. The PAJ, meanwhile, has played a strong role in untangling the logistical challenges of the period. The increase in international trade had some adverse effects as it resulted in container shortages and congestion at some of the major international ports. The PAJ head stated, “The response to the COVID-19 pandemic by Jamaica’s port and shipping sector has in general been swift, immediately responsive, and efficiently coordinated among the relevant stakeholders. Systems were implemented to seamlessly facilitate an increase in ship traffic as a result of the increase in regional and global demand.” Additionally, he stated, the Port Authority of Jamaica (PAJ) has been working strategically and collaboratively within the port community to digitally integrate and automate the processes within the trading sector. In this regard, he noted, “ the use of the Port Community System (PCS) to manage trans-shipment activities has been a tremendous advantage for Jamaica. It allows shipping agents/lines to create, submit and electronically pay for all trans-shipment related activities online.” Under the COVID-19 paradigm, the system allows stakeholders to operate remotely, maintain their productivity while reducing the number of bodies required to physically visit the ports. The overall effect of the PCS, Gordon Shirley said, is to reduce the time required for importing, exporting, and trans-shipping cargo through our terminals, thereby enhancing Jamaica’s competitiveness as a trading centre. Trading activity and volumes have risen since COVID instead of falling. Prior to COVID-19, TEU’s stood at 1,441,976 in 2019. A twenty-foot equivalent unit (TEU) is a shipping container whose internal dimensions measure about 20 feet long, eight feet wide, and eight feet tall. It can hold between nine and 11 pallets. This TEU figure pre-COVID rose to 1,453,738 TEU’s in 2020, an increase of 11,762. So, Professor Shirley outlined, “During the period Jan-Dec 2020, the total container volumes handled at the Kingston Container Terminal (KCT) operated by the Concessionaire, Kingston Freeport Terminal Limited (KFTL) increased by one per cent when compared to the previous year. Moreover, for Jan-Aug 2021 the volume of containers handled at KCT has increased by 26 per cent above the comparative period for 2020. Meanwhile, vessel calls to the terminal also saw an increase in 2020 over 2019 with figures of 1,148 and 1,451, respectively.   Container peak The PAJ president said, “It is noteworthy that in May 2021, container volumes as well as vessel calls peaked during which KCT handled more than 100,000 container moves and 139 vessel calls. This is a significant achievement for the terminal under KFTL’s management as it is the highest number of vessel calls as well as container volumes since July 2016.” He said that the respective terminal operators at the island’s ports were able to sustain safe operations by retention and rotation of essential workers, increased sanitisation of workspaces and physical distancing. Shirley noted that the use of technology through automated processes also positively impacted the continuation of vital operations. Nevertheless, he admitted, effectively mitigating against the spread of COVID-19 has adversely affected the productivity at the terminal. In adherence to new safety measures and protocols, the consistent need for frequent breaks for sanitisation of staff and equipment resulted in delays in operations.   Nearshore recovery The PAJ head said data analysis revealed an uptick in trans-shipment volumes in 2021 relative to 2020 when the pandemic began to affect Jamaica. “We attribute the increased volumes to the reopening of economies within our region as well as the associated consumer demands,” he asserted. “Compared to pre-COVID-19 levels in 2019, the statistics and data are very similar to the current level of activities. ” The PAJ head said that the 26 per cent increase in the container volumes for YTD 2021 suggests that the volumes passing through the Panama Canal has increased and that KFTL (Jamaica) has benefitted from the increase in volumes. Source: https://www.jamaicaobserver.com/business-observer/jamaican-ports-see-teu-numbers-rise_231178

Jamaica is reaping dividends from the investments that have been made in the development of the Kingston Container Terminal (KCT). These investments, in dredging and other expansion activities, have enhanced the terminal’s productivity and competitiveness and have attracted new transhipment volumes to Kingston, said President and Chief Executive Officer of the Port Authority of Jamaica (PAJ), Professor Gordon Shirley. “Not only have transhipment volumes been increasing but with a newly dredged channel, larger vessels are now being deployed to Kingston in growing numbers by the shipping lines,” he informed. He noted that the growth has been accelerated throughout the period of the coronavirus (COVID-19) pandemic. “Visits are now routinely received from vessels carrying 10 to 15 [thousand], 20-foot equivalent units (TEU) compared to vessels carrying 3.5 thousand TEUs prior to 2016,” he added. President Shirley was speaking at the recent commissioning and christening of the Port Authority of Jamaica’s Jamaica III utility vessel at Newport East. Kingston Freeport Terminal Limited (KFTL) assumed responsibility for the management and operation of the KCT on July 1, 2016, with the task to invest, maintain, operate, and grow cargo volumes, and position Kingston as a major transhipment port for the Caribbean and Central America. The Port Authority has partnered with the KFTL in building out the infrastructure and providing the training needed to meet the growing demands of the maritime sector. Prime Minister, the Most Hon. Andrew Holness (second right), looks on as Captain Hugh Helps (second left), points out the control panel system of the Jamaica III utility vessel, during a tour of the boat on August 11. This was after the official commissioning and christening of Port Authority of Jamaica vessel, at Newport East, Kingston. Others (from left) are President and Chief Executive Officer of the Port Authority of Jamaica, Professor Gordon Shirley; and Member of Parliament for East Rural St. Andrew and wife of the Prime Minister, the Most Hon. Juliet Holness. (Yhomo Hutchinson Photo) Professor Shirley noted that with the larger vessels entering the Kington Harbour requiring bigger tugboats to assist in the berthing and unberthing process, international tender for the provision of tugboat services for Kingston was issued in 2017. He said that the competition among the global tug service companies reflected the growing confidence in the Port of Kingston. Arising from that tender, the PAJ entered into a concession agreement with Ocean Limited, a Canadian tugboat operator, for the provision of tugboat services. The concessionaire has since deployed two new larger boats to service the Kingston Harbour. He noted that discussions are under way for the deployment of a third tug given the increase in volume of vessels entering the harbour. Professor Shirley said that new acquisitions and upgrades are constantly being made as the sector grows and develops. “Kingston has visibly become a busier maritime centre and the trend is growing. To maintain the safe passage of vessels in Kingston and in our other harbours, it is important that our navigational aids, our buoys, beacons, stop marks, and lighthouses are upgraded to incorporate the latest technologies and that they be efficiently maintained. Safety of all the vessels traversing in and out of our harbours is dependent on it,” he said. He informed that industry-wide training is also being facilitated to equip Jamaicans with the skills and technology to meet industry demands. “Our marine pilots have upgraded their skills and now are experts at the task of managing the berthing and de-berthing of these mammoth ships. To ensure the safety of the pilots and the pilot boat crew, new pilot boats were acquired, which are equipped with the latest technologies and the new vessels are substantially more efficient and capable than the much older vessels that they replace,” he noted. Meanwhile, Prime Minister, the Most Hon. Andrew Holness, said the prudent management of the country’s financial resources has been key in facilitating the necessary investments in the maritime and logistics sector. “Ten years ago… this country made the decision – not a partisan decision – everybody agreed with this, that we are going to ensure that all our economic decisions are on the basis of fiscal discipline, and now we are reaping the dividends from that national decision around good fiscal management of our public affairs, that we are now able to make capital investments like these,” he noted. The Port Authority’s state-of-the-art utility vessel, which replaces the 42-year-old Jamaica II, will be used primarily in the maintenance of navigational buoys and beacons in the island’s ports. Additionally, it will be utilised to carry out upkeep on the two offshore lighthouses – Morant Cays and Pedro Cays – which mark the territorial limits of Jamaica’s sea space and assist with maintenance of other offshore assets. The Port of Kingston is located on the world’s seventh largest natural harbour. The port is strategically located on the north/south-east/west axis through the Caribbean, approximately 32 miles from the trade routes passing through the Panama Canal. Source: https://jis.gov.jm/features/investments-bringing-increased-business-to-kingston-container-terminal/

The National Export-Import Bank of Jamaica (EXIM Bank) is encouraging exporters to take advantage of its Trade Credit Insurance (TCI) facility to protect their goods and services. Speaking in an interview with JIS News, Manager, Business Origination at EXIM Bank, Allan Thomas, explained that TCI is a tool that an exporter or supplier can use to protect his/her business against default of payments by overseas buyers, in unforeseen circumstances such as the coronavirus (COVID-19) pandemic and when going into new markets. “If you should sell goods and services to a customer on credit and after a period of 120 days the customer has not paid you, then under the TCI you would have the option of making a claim under the policy for the Bank to pay you up to 85 per cent of the amount that you have insured the goods or services for,” he noted. Mr. Thomas informed that for persons to access the coverage, they would need to take out a TCI insurance policy and pay a fee of approximately $12,500 plus general consumption tax (GCT), once approved. “When that policy is approved you are able to get a special buyer limit coverage,” he said. Mr. Thomas said that an added benefit of the policy is the research that is done by the Bank when a policyholder plans to go into new markets. “In taking out the insurance, you will now be getting information that you weren’t privy to before by us doing the checks on those customers that you will be selling to on credit terms,” he said. “It is a must-have for exporters, but even in the local market, the policy is available for persons who are selling goods on credit terms to other local companies,” he pointed out. The TCI policy can also be used to access working capital support from the EXIM Bank. For further information, persons can contact the EXIM Bank at (876) 630-1400 or (867) 618-5889. Source: https://jis.gov.jm/exim-bank-offers-trade-credit-insurance-to-exporters/

The Jamaica Customs Agency has embarked on the second phase of its Authorised Economic Operator (AEO) Programme with the recent launch of the exporter component of the programme. The AEO Programme is a supply chain security programme that deals with implementing security measures along the supply chain in international trade, with a focus on containerised shipments in particular. The programme is for everyone within the supply chain including importers, exporters, warehouse keepers and brokers. Speaking in an interview with JIS News, Manager of the AEO Unit at the Jamaica Customs Agency, Ms. Karen Wilson, explained that the agency has been operating the AEO Importer programme since 2014. Under that programme, prospective members are required to import a minimum of six full containers per annum and implement the AEO security requirements as part of their organisational protocols and processes. The new Exporter Programme has a number of requirements, such as export of Full Container Loads (FCL) – at least one per annum, be a registered business with the Government of Jamaica and actively trading for at least three years, completion of all AEO security requirements, compliance with revenue payments and legal obligations of the various government agencies and they must sign a Memorandum of Understanding (MOU) with the JCA. A pilot programme took place in April followed by sensitisation of the main stakeholders in May. “What we have done is add those importers who are currently on the Importer Programme, who also export and have expressed an interest to be a part of the programme,” Ms. Wilson stated. “We have had those exporters added to ASYCUDA as AEO Exporters. They would continue to receive expedited service from both sides, both the importer and the exporter side of things in relation to the processing of their documentation,” she added. The AEO Manager pointed to the Jamaica Single Window for Trade (JSWIFT) portal which includes the processing of all declarations and requirements from the trade regulators (import and export) in one central portal. “With this portal, it is like a virtual one-stop shop, everything is going to be processed through JSWIFT. There will be continued examinations of exporters when the goods are leaving the country, just to ensure that no compromise occurred, but is going to be less intrusive” Ms. Wilson explained. The AEO Unit Manager explained that companies will be receiving a certification which is internationally recognised by all member countries of the World Customs Organisation (WCO) that have implemented the AEO programme. “This certification allows for exposure to new markets because we find that with things occurring in terms of security throughout the supply chain, companies are now specifically seeking out other companies that are implementing security measures along their supply chain so they tend to be shifting to do more business with companies that are AEO Certified,” Ms. Wilson explained. Future benefits of the Exporter Programme include Mutual Recognition Agreements with other countries, which will facilitate seamless movement of goods across third party country borders. The steps in the application approval process are: risk assessment of applicant; interview and validation of security requirements; recommendations for approval or denial of application; signing of MOU and awarding of certificate. Source: https://jis.gov.jm/jca-implements-second-phase-of-aeo-programme/

Prime Minister, the Most Hon. Andrew Holness, has highlighted the need for the strengthening of engagement between CARICOM and the African continent, noting that “great economic potential” exists between the regions. The Prime Minister, who was addressing the inaugural CARICOM-African Summit, held virtually on Tuesday (September 7), noted that the African Continental Free Trade Agreement (AFCFTA) serves as an enabling environment for trade and investment opportunities across the regions. “There is potential in the agro industry and logistic sector, and Jamaican companies have already invested in Africa. Opportunities also exist for scientific research, healthcare, technological innovation and digitisation, and tourism,” he said. Mr. Holness further pointed to the solidarity that exists between the two regions in addressing issues such as development financing, debt sustainability, and climate change in various regional and international fora while working for deeper integration. He hailed the African Union (AU) for its provision of access to coronavirus (COVID-19) vaccines and other “critical medical supplies” to Caribbean countries through the Africa Medical Supplies Platform (AMSP), noting that this “has been a game-changer for the continent and for us”. The Prime Minister said that the staging of the Summit, under the theme ‘Unity Across Continents and Oceans: Opportunities for Developing Integration’, is the fulfilment of a vision held by Jamaica’s first National Hero, the Right Excellent Marcus Mosiah Garvey, and other Pan-Africanists “to achieve greatness for people in the African Diaspora from unified engagement”. He urged the leaders gathered for the event, to ensure that these dreams are fulfilled. The Prime Minister said that the “timely dialogue” between the two regions will serve to “entrench our platform of bonds” and common historical experiences, which have been enriched by cultural, economic, and political affinities. Source: https://jis.gov.jm/great-economic-potential-between-caricom-and-africa-pm/