The upcoming nineteenth version of the TOC Americas event in Colombia has the industry’s eyes set on the Caribbean region. Mostly famous for clear, turquoise waters and warm beaches, Caribbean ports play an important role in key trade routes. The Caribbean Shipping Association –CSA- is supporting this year’s TOC Americas conference. General Council President Juan Carlos Croston, will be speaking at the event, which he feels is a great opportunity to address key issues for the industry. “TOC Americas creates an interesting venue for discussion and visibility. Industry alignment is challenging, but we can’t continue being invisible to the public eye in an era where stakeholder engagement is fundamentally important.”

The topics relevant to the Caribbean that Croston will be addressing at the TOC Americas conference shed a light on the region’s current issues, on subjects such as climate change, infrastructure development, tourism and future challenges/opportunities. The CSA was established in 1971, to facilitate development of an efficient, viable Caribbean and Latin American shipping industry.

“The primary function of the CSA is to promote and facilitate the exchange of information and ideas essential to development, thereby assisting members to improve efficiency, production and output. The backbone of the CSA is composed of national shipping associations throughout the Caribbean region, plus key shipping stakeholders: shipping agents, port and terminal owners and operators, ship owners and operators, and logistics and ancillary service providers,” details Croston.

Panama Canal expansion & other trends

One of the most important maritime infrastructure developments of the past decade has been, without a doubt, the expansion of the Panama Canal. For the CSA, this poses an infrastructure challenge of its own, as the larger ships that are now cruising the Canal require bigger facilities in their ports of call. “To keep up with the expected consequences of the expansion (larger vessels, more container transshipment activity, more cruise passenger activity), most of the ports in the greater Caribbean region had to evaluate infrastructure and services offered versus such expected consequences. There was a big jump in port infrastructure investment in the years leading up to the opening of the expanded Panama Canal. It took more time than expected, but this year, we’re seeing the first waves of network changes that take into consideration bigger vessels, fewer ports of calls in the strings, additional feeder services to feed head haul lanes and more transshipment volume created, including of more reefer cargo from WCSA. Now, larger transshipment hubs need to deliver value by absorbing the new volumes and making sure connections,” adds the leading executive.

Croston also reminds us that the Panama Canal expansion in itself “pushed many ports in the region to review demand forecast against their own operational capabilities with the resulting investment in new capacity, in order to service the new, larger vessels and, expected, increased cargo volumes. Many players in our industry now seem to be more conscious about investment decisions (lower returns, reduced container volume growth, etc.) while the growth in containership vessels is likely to peak soon. Less ocean carriers and larger alliances would likely indicate more leverage on the demand side to negotiate better conditions from service providers (including terminal operators) but also there might be more awareness that cost leadership alone is not enough and customer service excellence is also needed to be more profitable. Here, investment priorities from service providers need to take into consideration infrastructure (do more with less), technology (improve customer’s experience and be more efficient) and people (the key differentiator).”

In terms of global shipping trends, such as larger ships, consolidation and alliances, the CSA has tackled these issues by focusing on analyzing the poor financial performance of ocean carriers as the main driver for such changes. Croston highlights that “the latest trade reports seem to point out to more balanced financial results from carriers, hinting that their strategy may be bearing results, albeit not to the like of global shippers who complaint of reduced competition regarding maritime transportation.”

Funding & other challenges

Raising money is always an issue, and Caribbean ports are not an exception. The need for investment is a reality, especially in government-run facilities. “While education and health should take public investment priorities, long-term performance of small territories is linked to the capacity of such territories to trade with the rest of the world. And good seaport infrastructure (and processes) is vital to that end. We have seen in the last couple of years, interest from regional government to attract foreign direct investment from private firms and countries, while also seen some concern from local private companies regarding the conditions offered to secure funds. Dialogue and openness are vital so that the needs of all players (investors, local governments and private sector) are listened to whereas funds needed to investment flow in as fast as possible.”

Other challenges the local maritime sector will have to face include tackling inclement weather, structural changes and increase & training of work force.

Climate change & tourism

Violent and more destructive weather patterns have been affecting the Caribbean region as of late as a consequence of climate change and global warming. The CSA has partnered with the Inter-American Committee on Ports (CIP) of the Organization of American States (COAS), to start a project called Improved Disaster Risk Management for Ports in the Caribbean. “The program’s main objective is to contribute to reduce the impact of natural and manmade hazards on port operations by strengthening disaster risk management capabilities in Port and Maritime Authorities of the Caribbean. The project has four phases and includes i) an assessment of specific vulnerabilities, ii) draft a model operational procedure plan that each port can tailor to its own needs, iii) train key stakeholders on implementation (including governance and business continuity), and iv) carry out exercises and simulations to identify improvement areas so that they can be incorporated into the draft plan,” explains Croston.

As far as tourism, it is a vital source of income for Caribbean economies. “There seems to be  little awareness about environmental protection,” tells Croston. That’s why the CSA has partnered with the Caribbean Marine Environmental Protection Association (CARIBMEPA) to consolidate marine environmental issues and actions in the Caribbean and to engage industry, regulators, governments, conservation groups, educators and the general public in promoting and protecting the environment.”

Juan Carlos Croston will be presenting at the TOC Americas conference in Colombia at end-October. For more information on delegate passes, sponsorship or exhibition booths, please write to: [email protected]