For years, the Cayman Islands has sought to create a third pillar of its economy to add to tourism and the financial services industries.
At one time, e-commerce was touted as a possibility, but even after a special government board was established to explore the possibilities, nothing really came of e-commerce here.
Joe Imparato of City Services (Cayman) Ltd., the developer of the proposed East End Seaport, believes his project offers a real opportunity for Cayman to diversify its economy, particularly with cargo transhipment, something that doesn’t currently exist in the Cayman Islands.
There are five elements of the proposed seaport. A cruise ship home port and mega yacht marina would attract new business in the tourism sector. A hydrocarbon storage facility would improve the safety of storing flammable materials on Grand Cayman and open up the possibility of more competition – and lower consumer prices – on fuel.
The project will also allow for the moving of the commercial cargo port from George Town Harbour. This would not only reduce truck traffic and improve the aesthetics in George Town, but also offer a cargo port that would be less susceptible to closure due to bad weather.
Unlike the other elements of the East End Seaport, the cargo transhipment facility would create a completely new industry for the Cayman Islands.
Imparato says the concept would work.
“Can we really become a player in transhipment,” Imparato asked at a press briefing recently. “The answer is yes.”
Imparato says he’s discussed the proposal with some of the big shippers in the region and there are a number of companies already interested.
Why it would work
One of the reasons why transhipment would work in Cayman is because of its proximity to the Panama Canal.
Currently, many of the large ships with cargo coming from the Far East offload in Jamaica for transhiping.
“We want to offer an alternative to Jamaica,” Imparato said.
Not only is Grand Cayman closer to the Panama Canal than Jamaica – something that would save shipping lines time and fuel – but it would be able to offer more security.
Imparato says theft at the port is a major issue with transhipment in Jamaica. He said that the problems are so bad that the receivers of shipments coming into Jamaica have to pay for the container in full.
“Why? Because they’re not certain they’ll ever see that container again,” Imparato said. “These containers, you pay for them up front, like paying a 100 per cent deposit. And that doesn’t address the goods inside.”
Because of the port theft issue, Imparato says companies are looking to get out of Jamaica.
“We will take some of that business, just for the reason alone, because they’re getting tired of it.”
In addition, the new Cayman cargo transhipment facility would be built to the most modern standards, offering an improvement over older facilities in Jamaica.
How it would work
Imparato said about 25-30 acres of the entire 1,500-acre Seaport would be used to create a facility where large ships, primarily coming from the Far East through the Panama Canal, would come to offload containers, or breaking bulk as it’s called.
The containers would then be loaded on smaller ships and sent to other ports in the Caribbean region, as well as to the East Coast and Gulf Coast of the United States.
Transhipment in Cayman would create jobs here for the people working at the facility and revenue in the form of various landing fees for government.
Beyond that, however, there’s an opportunity for entrepreneurs through the legislative creation of a Port Development Zone, an area where goods can come and go, sometimes with improvements, without attracting import duties.
Imparato gave the example of someone who might want to make t-shirts that had something printed on them.
“So an entrepreneur could order a container-load of shirts, have a printing operation in the Port Development Zone… take orders for the t-shirts from any part of the region and print those shirts, repackage them and send them on a container off to that particular market without have having to pay import duties,” he said.
Imparato said he’s already had an inquiry from a company that wanted to bring in the ingredients to process canned foods, do the processing and canning here, then brand them and send them off “to places as far away as Africa”.
The transhipment area would offer the opportunity to create many different kinds of light manufacturing operations, including assembly of certain products.
“This is not a new idea,” Imparato said. “It’s done in many places in the world, the closest which is Freeport [Grand Bahama].”
Jobs and opportunities
The main benefit – besides diversifying Cayman’s economy – of transhipment operations would be employment, Imparato said.
“Jobs is the key to it,” he said. “Putting people to work and allowing them to make a living, whether they’re the owner/entrepreneur or the guy providing the labour in the factory or the processing plant, it doesn’t make a matter, it’s a living for somebody.”
The facility would also offer and entrepreneurial opportunity for someone to construct a building in the Port Development Zone and lease out space for the storage or processing of goods.
“I’m getting enquiries almost every day from people who want to know how they can be involved,” Imparato said, adding that some of the enquiries are coming from residents and some from overseas.
There is no set timeline for when the cargo port would move from George Town to the East End Seaport; it would happen when the government could afford to put in the necessary infrastructure.
However, with a transhipment facility in place, an opportunity to combine or privatise the Port Authority would come about.
Imparato said it was possible.
“We don’t need the duplication of cranes, or wharfs or machinery,” he said.