Port evaluation study as regional logistics hub

Client Background

• Port Authority of Jamaica is the public body responsible for the development of ports in Jamaica including the ownership and operation of the Kingston Container terminal (KCT).
• In 2012 KCT handled 1.85 million teu of mostly transhipment and relay cargo

Client Situation and Objectives

• The Port Authority of Jamaica needed to prepare for the period after the opening of the enlarged Panama Canal. Two studies were commissioned, the first on the long term effects on Kingston as a transhipment port in the region. The second to assess specific port centric logistics site opportunities for a role as a regional logistics hub. The port centric site assessment involved a project in two phases.

Phase 1

• To determine the potential demand and types of regional logistics activities likely to be required at Kingston post Panama canal expansion. To give an overview of the suitability of two intended port centric sites.

Phase 2

• To give a detailed evaluation of the preferred site from Phase 1 in terms of land use requirements, volumes of business, potential high level financial returns on development options. To provide a high level marketing plan for support of any development.

Drewry Approach

• The Drewry team investigated the sites through a detailed inspection visit. Demand levels were forecast based on the experience of other regional transhipment hubs with port centric logistics activities, consistent with our high level forecasts of post Panama Canal enlargement activities;
• A detailed appraisal was made of the competing regional hubs and their logistics activities.
• Comparison was made with other global regions where port centric logistics activity takes place on regional transhipment business.
• The economic and industry drivers of successful international logistics hubs were determined.
• Demand for logistics activity was forecast consistent with transhipment volumes.
• The location impacts of proposed sites were evaluated against international best practice. Pros/Cons determined.
• The preferred site was evaluated in terms of land use types versus required activity levels and high level financial return modelled.
• The market plan addressed the necessary success factors required for any development

Results Achieved

• The report identified a number of macro economic and industry issues that would need to be addressed for a successful development and suggested major changes to the intended site usage to allow profitable development. To date no firm investment plan has been activated.
• The Drewry study results were used with government and potential investors in the port. Whilst the port authority retains a long term aim of developing a logistics hub it has concentrated on the carrier transhipment role first. This is consistent with our finding