The government must take greater steps in overhauling the country's shipping infrastructure to support Family Islands development as the region competes for business from increasingly larger international freight vessels, according to Arawak Port Development Ltd. (APD) President and CEO Mike Maura. In a correspondence with Guardian Business, Maura said the Family Islands require an efficient and suitably scaled transportation model playing into the long gestating National Development Plan (NDP) if they - and the country at large - hope to grow their economies in a progressively competitive regional shipping environment.
"In The Bahamas where we have a number of family island communities competing for the same tourist dollar the government must ensure that the transportation infrastructure is adequate to support the economic development of the community. This may require identifying the best hospitality model for the island and then determining what infrastructure is required to support growth in the sector," stated Maura.
Maura stressed the need to incorporate a master plan for national port development into the National Development Plan as the international market moves towards massive vessels in order to cut down on operating expenses.
Panama expects to complete the expansion of the Panama Canal by 2017, allowing international freight companies to nearly triple the tonnage of its vessels passing through the canal. This increase in vessel size, according to Maura, will make the majority of the ports throughout the Caribbean inaccessible and requires government attention.
"As these international vessels become larger the ports they can call will become fewer necessitating a hub and spoke transportation model... These large deep water ports will serve as transshipment ports for international in-transit cargo and also facilitate the relay of cargo onto smaller feeder vessels which in turn will call on a few of the Caribbean ports.
"I believe that aligning the port infrastructure with the islands' strategic development plan is the key. Notwithstanding the invaluable contribution from the domestic transport sector, I believe that for our Family Islands to survive and develop, access by larger, more efficient carriers must be facilitated," Maura said.
He estimated that such Caribbean hubs include Freeport; Caucedo, Dominican Republic; Kingston, Jamaica; and Santiago de Cuba.
"Even if a Caribbean port could accommodate such a container vessel due to the utilization of a cruise ship berth the issue of economics enters the equation. These large ships are very expensive to operate and each has a breakeven formula which considers the average volume per voyage, the average ocean freight rates paid in the market along with many other factors such as opportunity cost.
The challenge then facing The Bahamas, in Maura's view, comes both in preparing for the arrival of larger and larger vessels demanding accommodation and also in recognizing the importance of local carriers.
"Relatively small Caribbean markets simply don't have the market volumes to support a regular service by these large ships and given that these markets are primarily tourism dependent the frequency of cargo arrivals is paramount," Maura noted.
While he believes that closed markets are detrimental to economic growth, he called for "careful consideration" to policy legislation, noting that some consolidation among smaller local carriers could take place to improve the financial viability of the operator and compliance with increasingly complex local international standards regulations.
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