Travel, Ports, Shipping and Courier Services
September 26th, 2021
Gateway to the Americas
We need to position Trinidad and Tobago as a major player in the logistics and warehousing industry encompassing all aspects of the supply chain.
At the helm of Port Point Lisas, often referred to as the “Gateway to the Americas,” Ernest Ashley Taylor, President, PLIPDECO, has successfully manoeuvred the challenges of the Covid-19 pandemic. An advocate for legislative and technological changes, he is confident that Trinidad and Tobago can become a logistics and warehousing leader in the Caribbean.
Sector review: 2021-2022
“Challenges started in 2020 due to the Covid-19 pandemic with a spillover into 2021. Several issues arose – changes in working arrangements, unavailability of staff and an increase in overtime charges. In the latter half of 2020, there was also a significant increase in shipping costs which impacted overall trade as well as the cost of doing business,” Taylor explained. “The reason this spike occurred was that some shipping lines took vessels out of rotation to better manage their costs during the height of the pandemic and the reduction in available shipping containers. Once major economies started recovering, there was a surge in demand with which the industry could not cope, thus causing shipping costs to escalate.”
What is required for the shipping, ports and courier services sector to move forward?
A champion of economic diversification, Taylor recommends, “We need to position Trinidad and Tobago as a major player in the logistics and warehousing industry, encompassing all aspects of the supply chain – warehousing, distribution, consolidation and reconsolidation – as well as the provision of services around this such as transportation, goods and services, technology, ship spares and supplies, infrastructure development and engineering.” Citing regional examples, Taylor stated that in 2012 the Panamanian government established a Logistics Cabinet comprising their government and business community. It was responsible for making the logistics sector an integral component of the Panamanian economy. Jamaica has also undertaken a dedicated push to develop its logistics sector by, among other things, establishing hundreds of thousands of square feet of new warehousing space within the last few years.
How can Government contribute to the sector’s success? What role can the private sector play? “I would like to see Government review the free zone legislation to facilitate consolidation of incoming cargo for repackaging for export to the Caribbean and Latin America. The Trinidad and Tobago Revenue Authority (TTRA) also can’t come on stream soon enough. The view is that customs is inefficient and outdated.” Taylor wants the sector to increase its use of technology, “Although the Ministry of Trade and Industry has been at the forefront of advancing the one-stop-shop concept, the speed of adoption needs to be accelerated to keep pace with the rest of the world. Government should also facilitate more industry investment incentives and training programmes. We also need an enabling banking sector, so industry stakeholders can access small to medium-sized loans.” The shipping lines had to implement innovative solutions to deal with forex challenges, and last year they implemented a new measure
to receive payment of local charges in US dollars.
What are the most significant sector initiatives expected over the next couple of years?
Last year, the Government issued an expression of interest for privatisation of the Port of Port of Spain. The Request for Proposals should be issued in 2022. “PLIPDECO also has a lot of projects in the pipeline. In the coming months, we will issue a contract for an automated gate system using RFID technology. This is going to fundamentally change the way business is done at PLIPDECO by reducing container truck wait times. Other major projects include rehabilitation of the container storage base and implementation of an online payment system.” Government’s establishment of the Phoenix Park Industrial Estate is also expected to further position the Point Lisas product as a hub for logistics and warehousing services.
How do increased port activities in Guyana, Suriname and Jamaica impact Trinidad and Tobago?
“With respect to Guyana and Suriname, we benefit from transshipment and containerised cargo and in Guyana also, specifically from the movement of supplies for the energy sector. In the short to medium term, we will continue to realise benefits as the Guyanese economy grows and as its oil and gas sector grows.” However, in the long-term, Taylor expects a drop-off as Guyana has plans underway for the construction of additional shore based facilities as well as sizeable cargo ports. Jamaica is in a different competitive space from Trinidad and Tobago, focused on the transshipment of cargo to the US.
What is your outlook for the sector from 2022 to 2023?
“It is going to be a mixed bag. We are seeing year-to-date 25% growth in activity for containerised cargo due to a substantial increase in transshipment. However, from the import-export perspective, we have seen about a 6% improvement compared to last year and we expect to see that grow further as we slowly come out of Covid-19 restrictions. There was a lot of suppressed demand and while consumers are now spending more, this may be tempered somewhat locally because economic growth is still sluggish. While I remain optimistic, I expect sectoral growth to be slightly below the global average.”
In 2021, domestic tourism prevailed as a critical component of the local tourism industry, with a constant flow of visitors between Trinidad and Tobago, offsetting the impact of declining international arrivals during the pandemic. The daily inter-island ferry service between Port of Spain (Trinidad) and Scarborough (Tobago) which is a key infrastructural component of the domestic tourism offering, remained a popular choice for vacationers and others commuting between the islands as it completes the 20-mile journey in a mere three to three and a half hours.
Trinidad and Tobago Inter-island Transportation Company Limited (TTIT) operates the sea bridge service providing reliable affordable transportation for passengers, vehicles and cargo between Trinidad and Tobago. It is a vital sea link for business and leisure/tourism.
From inception, the inter-island sea bridge has been operating vessels of varying size, speed, and capacity. Having addressed several challenges, Vilma Lewis-Cockburn, Chief Executive Officer of TTIT outlined recent developments, “Innovations in vessel design and technology, and changing customer demands have resulted in fleet upgrades over the years. The acquisition of the Galleons Passage and more recently, the APT James and the Buccoo Reef catamarans provide examples of progress.”
Heavily subsidised by the Government of Trinidad and Tobago, TTIT’s operational costs are escalating. Historically, passenger utilisation of the inter-island ferries has been between 68% to 82%, with the lower limit reflecting the movement of passengers during non-peak periods and the upper limit representing the peak utilisation interval. The sea bridge usually operates a fleet of at least two passenger ferries, hence there is always excess capacity even under normal circumstances. To fill this gap, TTIT is intent on attracting new customers through improved delivery and marketing of its services.
What’s next for TTIT? Lewis-Cockburn shares her vision, “We want to maintain our leadership position in providing inter-island transportation by improving our service delivery. In addition, we also want to streamline operations which will result in improved efficiencies. I would also like to see us improve brand TTIT and provide customers with an experience of safe, reliable, comfortable, and affordable travel between the islands.” TTIT also has plans to invest in infrastructural works as well as increased training for its employees.
Current visitor arrival figures reflect a significant increase in domestic tourism and with international travel behaviours likely to be impacted in the long term, it is expected that this will continue as the new normal in the domestic travel industry. Optimistic about the continued revival of domestic tourism in a post-Covid environment, Lewis-Cockburn anticipates that passenger utilisation rates will increase by 25% in 2022 and 27% in 2023.
With limited recovery in global tourism expected in 2022 and projections of a scaled rebound in the Caribbean, it is anticipated that domestic tourism will maintain the positive momentum generated during the pandemic. In the face of uncertainty caused by new Covid-19 variants, TTIT must continue to seize the opportunity to drive profitable demand and retain client loyalty in a competitive market.
Article by: Natalie Dookie