The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Freeport Container Port (FCP) is the second most efficient port in the Caribbean despite having the highest shipping costs per mile, a World Bank study has found.

The report ‘Logistics Connectivity in the Caribbean: Current Challenges and Future Prospects’, which has been obtained by Tribune Business, found that Freeport’s per mile shipping costs from Miami were triple what it was to transport the same 20-foot equipment unit (TEU) to Haiti’s capital, Port-au-Prince.

But, despite the relatively high costs, the World Bank-funded study confirmed the huge transshipment growth potential that Freeport Container Port will have when the Panama Canal expansion is completed in 2014. It noted that the facility already served as the northern point of an existing Caribbean transshipment triangle that features Panama’s Colon Free Zone and Trinidad’s Port of Spain.

Noting that poorly-run ports effectively acted as a tax on cargo, and raised the cots of ocean shipping, the report said only San Juan was more efficient than Freeport Container Port over the decade between 1999-2009.

“Ports like San Juan and Freeport are very highly ranked in terms of their efficiency with an average of 92 per cent and 80 per cent, respectively,” the World Bank study said.

The news on cost efficiency, though, was not quite as good. While shipping costs for a 20-foot TEU from Miami to Freeport, at $1,200 per container, were the lowest in the region due to Grand Bahama’s South Florida proximity, the per mile price was the highest in the Caribbean.

“In relation to distance, the cost of moving a 20-foot container from Miami is highest to Port au Prince in Haiti and Freeport, at around $4 and $12 per mile travelled,” the World Bank study said.

However, Freeport Container Port’s (FOB) maritime costs for shipping containerised cargos to the US and South America were around 7.5 per cent of FOB - slightly higher than global averages but lower than the 13 per cent Caribbean regional average.

Maintaining, and improving upon, this will be vital to Freeport Container Port’s competitiveness as a regional/global transshipment hub. Acknowledging that the Panama Canal expansion would “set the stage for the growth of transshipment in the Caribbean”, the World Bank report added: “Ports such as Freeport, Caucedo, Kingston, Colon and, eventually, Cuba, could potentially become competitive transshipment hubs serving multiple markets on the US south-east coast and South America.

“Freeport has used its unique geographical position and the artificially-created barrier to short sea shipping in the US by the Jones Act. Freeport is the entrance from where cargo can easily be distributed to and from the US on non-US flagged vessels, avoiding restrictions from the Jones Act.

“The lack of a natural hinterland makes Freeport almost a pure transhipment hub, with almost the entire traffic (98 per cent) being transshipped.”

The World Bank study said Freeport Container Port, Kingston and Colon in Panama collectively handled 66 per cent of the Caribbean’s container traffic, with the Grand Bahama-based facility handling 21 per cent of the market itself - the second-largest share.

The report added that Freeport handled 1,116 TEUs in 2011, accounting for 2.7 per cent of the container throughput traffic for the entire Americas. This gave the Bahamas “the highest throughput per capita activity in the Caribbean, with almost 3.3 TEUs per inhabitant in 2010”.