The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas could create “hundreds, potentially thousands” of new jobs if it promotes itself as a logistics/distribution hub to major US multinationals, a Nassau-based specialist in the field saying this nation could become “as wealthy as the ancient empires” that sat astride major trading routes.

Henry Johns, vice-president of New Level Logistics, a supply chain management firm, told Tribune Business, though, that the Government and the Grand Bahama Port Authority (GBPA) had to start promotional efforts “now” to entice such companies to the Bahamas.

He explained that the Panama Canal expansion, and projected increase in shipping and tanker traffic, had given the Bahamas a ‘once in a lifetime’ opportunity to entice US multinationals to establish warehouse/distribution facilities in Freeport.

The attraction for these multinationals, Mr Johns told Tribune Business, was that by establishing a Freeport logistics base they could access immense savings by potentially closing down multiple US distribution facilities.

Recalling his time as a national account executive for US-based logistics and supply chain managers,Mr Johns said many West Coast multinationals were required to set up mega warehouse facilities in the mid-west and US east coast to serve customers in those locations.

With the Panama Canal expansion, product could now be brought into, and stored, in Freeport prior to entering the US. The city’s strategic location meant these goods could be brought directly into US east coast and mid-west markets, enabling multinational corporations to slash costs by eliminating warehouse operations in these areas.

And Mr Johns said Freeport’s status as a ‘free trade zone’, and its existing infrastructure, especially the Freeport Container Port (FCP) and deep water harbour, represented further potential attractions for the largest US corporations.

These companies could also use Freeport as their distribution centre for the rest of Latin America and the Caribbean, he told Tribune Business, but a sustained marketing effort - similar to that enjoyed by the tourism industry - had to begin immediately if the Bahamas was to be successful.

The Panama Canal expansion is slated to be completed by 2014-2015, and other Caribbean nations have already been readying themselves for the potential economic benefits, Jamaica moving, for example, to expand Kingston’s port.

Bahamian companies, too, have not been idle, with the Bahamas Oil Refining Company’s (BORCO) owner describing the facility as “the ideal location” to serve the expected 20-30 per cent increase in tanker traffic sparked by the Panama Canal expansion.

“I think this is an opportunity to reach out to those US multinational corporations I used to call on in California and Nevada,” Mr Johns told Tribune Business.

“If they know what I know now, they’d be very much attracted to setting up warehouse and transhipment facilities here.

“The impact of that is, if you can tell those companies to put a warehouse in Grand Bahama because it will eliminate their mid-west and east coast warehouses, they will immediately see the effect on their bottom line.

“Essentially, Grand Bahama becomes the new transhipment hub that serves markets in Latin America and the Caribbean. But we have to start making that promotion happen now.”

Mr Johns added: “We have to start promoting the incentive for these companies to look at Grand Bahama, and really solving their logistics problems. It just needs someone to start promoting it. It’s a wonderful opportunity, and the time to start is now.

“Marketing to these people is what the country needs to do, and the Port Authority, needs to do. They will never have heard any promotion from the Bahamas, it being so close to the US, having a deepwater port and a free trade zone.... The Port Authority is the best-suited entity to sell their airport, business parks and other facilities.”

Freeport has long been viewed as having the perfect ingredients to become a logistics/transhipment/distribution hub for the Western Hemisphere, but has yet to make good on this promise. As Mr Johns pointed out, its 400-acre Sea Air Business Park is relatively empty still.

Pointing out that international companies in Mexico were also assessing their relocation options, given the increasing crime and drug-related violence, Mr Johns said establishing the Bahamas and Freeport as a distribution hub would tick both the Government’s job creation and economic diversification boxes.

“You’re looking at hundreds, potentially thousands of jobs,” he told Tribune Business.

“The Bahamas is strategically in a position where, with the flow of trade coming through, it could be like an ancient empire that becomes very wealthy because it sits in the middle of a major trade lane.”

But, apart from a “long-term focused marketing approach”, Mr Johns said the Government and GBPA also needed to provide “turnkey services” that smoothed the relocation process for multinationals willing to relocate distribution to Freeport. Economic incentives were also critical, as was giving target companies time to plan any move to the Bahamas.

Noting that it would also allow New Providence and Family Island businesses to establish warehouses in Freeport, and bring in good duty-free until they were needed, Mr Johns emphasised: “Get the word out that the Bahamas has an open door mat.

“That has to happen consistently, and has to be continuous. It can’t be a five-year investment; it has to be similar to tourism. It has to be a perennial investment in bringing business opportunities to this country.”

He added that the direct and indirect employment created, plus spin-off businesses and economic activity, would be enormous if the Bahamas got it right.