As the Port Authority of the Cayman Islands celebrates its 40th year, the organization is preparing for a future that promises to bring much larger vessels, greater foot traffic and more cargo to the George Town waterfront.
In anticipation of immense infrastructure demands, port Director Clement Reid described renovation plans intended to transform Grand Cayman into a central stopping point and a regional transport hub. One of the first lines of order will be expanding the capacity of the Berkley Bush Cargo Distribution Centre at Airport Industrial Park to accommodate larger cargo loads.
“This is going to change the way we do business at the distribution center,” Reid said. “The plan will call for a new entrance gate, expansion of our existing warehouse and it will be totally computerized. Customers will be able to actually book when they want a container in advance.”
The addition of four, fully automated Boxhunter cranes from Finland’s Konecranes will take stacks nine-stories high and is expected to increase storage capacity from 900 20-foot containers to 3,000.
The expansion plans come in anticipation of changes mandated by the International Maritime Organization that will mean larger cargo vessels sailing internationally. As of September 2017, ships that carry ballast water will be required to have on-board treatment systems before discharging water into a port of call.
“We are aware that the lines are getting bigger, the cargo vessels are getting bigger. The current fleet of feeder vessels that service the Caribbean and small ports are becoming redundant,” Reid said.
“It’s not feasible to retrofit those old vessels, so most of the companies now are changing to larger vessels. So with the increase in vessel size and the population growth in Cayman and the increase of the tourism product, we need to be able to be efficient in order to deliver the cargo to our consumers on a timely basis.”
Transshipment from Grand Cayman
With the expansion of the distribution center, Reid hopes Cayman’s improved storage capacity will serve a much larger, long-term plan: transforming Cayman into a regional cargo hub.
“What the board is investigating right now is the idea of transshipment for perishable cargo out of Central America,” Reid said. “Some of the lines are asking our port if we could take that cargo that’s coming out of Central America, position it here for a 24-hour period, and then they would send other vessels to pick it up and take it in to South Florida.”
Currently, most perishable cargo that arrives in Cayman is first shipped from Central America to Port Everglades, Florida, where the cargo is repackaged and redistributed for the Caribbean. Under the Port Authority’s scheme, much of that redistribution could take place in Grand Cayman.
“The island benefits because we have created a new revenue stream that doesn’t currently exist. It also provides a new market for the importers and consumers to tap into. It will allow you, then, to bring fresh produce out of Central America at a lower cost and a longer shelf life than you currently get,” Reid said.
The port will first need to address the issue of tariffs, which currently render transshipment too expensive for Cayman. Reid said tackling this legislative issue will be a top priority for the Port Authority.
If cost and capacity barriers can be effectively addressed, Reid anticipates a robust, recession-proof addition to the port’s revenue stream.
“The interest has been unbelievable from companies that want to do business. … The trade that actually happens on our southwest coast between Panama and South Florida, it’s literally thousands of vessels per day. They pass by us,” Reid said.
“This type of business is pretty much recession-proof because the cargo doesn’t stay in Cayman. … It’s a new revenue stream for the economy. It generates more jobs because it will mean the port will take on new personnel to handle the volume. You’d open up the whole of Central America and the Panama Canal to Grand Cayman.”
He anticipates shipments could be brought directly from Honduras, where the government already has had trade talks, Panama, Costa Rica or Nicaragua.
Direct shipments from Central America would come with their own regulatory questions, however. Currently, produce that passes through Florida is subject to inspection by the U.S. Department of Agriculture. Averting Florida would also avert such inspections, which reinforce food safety in the Cayman Islands.
“The Department of Agriculture would have to step up their legislation in terms of manning the produce and whatever is coming out of Central America. They do have a division in the department now that does inspections of containers that come with perishable cargo,” Reid said.
By leveraging volume across the region, however, Reid anticipates that the port’s plan would lower freight costs and ultimately the price of consumer goods in Cayman.