Covid -19 and Jamaica as a logistics centred economy Part II
A story of how not connecting the dots could cost you
“However beautiful the strategy, you should occasionally look at the results.” — Sir Winston Churchill
Jamaica is transforming into a logistics centred economy. The evidence of this is all around us but it must always be remembered that the Logistics Hub Initiative is a long-term process of transformation.
The North-South Highway illustrates the point
The evidence of Jamaica’s transformation into a logistics centred economy and logistics hub is all around us.
Don’t believe me. Well, you are not alone, there are many that do not.
I recall a conversation with a young lady in Montego Bay at the Diaspora Conference 2015 where I mentioned that the North-South Highway, which was then under construction, was part of the Logistics Hub.
I was treated with a polite but firm ‘No! I don’t think so, the idea of the highway is old and what does it have to do with the port?’
I said ‘yes, it is not new, but it will add efficiencies to the movement of goods, services and people between the north and south of the island.’
Her retort, ‘yes I hear you and all that might be true but what does that have to do with the logistics hub?’
My response, ‘Everything!’
Before I could say anything further, I got another polite, ‘I don’t think so.’
And back and forth we went. The point is I just could not convince her.
This time around I hope I can convince you.
This investment by the Government has spurred or supported a variety of private-sector initiatives that are contributing to the transformation of our economy into a logistics centred one.
West Indies Petroleum knows exactly what I mean with its trucking of bunker fuel from Kingston Harbour to meet cruise ships on time in Ocho Rios, Falmouth and Montego Bay using the highway.
Likewise, New Fortress uses the highway as a critical link in its distribution of LNG island-wide.
There has been better and expanded courier and bus services, and we even see Knutsford Express building out a logistics and transit hub in Draxhall, St. Ann, at the north end of the highway which will allow them to expand and improve their service offerings.
The highway has also opened up the heritage and cultural sites of Kingston to cruise passengers from Ocho Rios and Falmouth and now with the new Port Royal cruise pier it has opened up the beaches of the north coast to those passengers.
The North-South highway is critical to the operations of Lydford Logistics, a special economic zone (SEZ), located close to the highway in Lydford, St Ann. Lydford Logistics, uses the highway to support its operations in food logistics, distribution and argo-processing by, connecting it to the port of Kingston and its distribution network islandwide.
The buildout of an economic cluster in Ferry, St. Andrew
including warehousing, distribution, truck rental, manufacturing, a SEZ specializing in business process outsourcing, etc is enhanced by being located close to the confluence of the East-West, the North-South and Mandela Highways.
Additionally, we see greater commercial and housing developments, especially in the Maumee Bay-Draxhall area of St. Ann, which allows for people living there or living in Kingston and commuting daily or on the weekends.
And how could I forget the convenience the highway has added to be on the north coast for some rest, relaxation and recreation in an hour or less from Kingston.
Importantly, though is not seeing how these dots connected could have costed you opportunities.
Logistics Centred Economy and Logistics Hub — a working definition
Part of the issue why these and many accomplishments are not readily associated with the logistics hub initiative is definitional. The terms logistics centred economy, logistics hub and logistics hub initiative are often used interchangeably however while related they are different.
Let me see if I can provide, at least at this time, a set of working definitions before I give comprehensive ones.
A logistics centred economy simply defined is an economy based on logistics. That is to say, the efficient organization and management of the flow of materials, people, financial resources, and data involved in production, distribution, and consumption of goods and services inside of the country.
The Logistics Hub, therefore, in essence is the physical and technological means to organize and manage the movement, distribution or production of various flows (material, human, financial, data, etc.) in the economy and connect those flows both locally and globally.
The Logistics Hub Initiative is then naturally the vision, the plans, and the programmes for how we will get there. All of this can be found in the Logistics Hub Initiative: Market Analysis and Master Plan which can be found on the Jamaica Special Economic Zone Authority’s website.
It is a voluminous document, however, it is well worth the effort, especially for business people, as it not only outlines specific private and public sector infrastructure and investment projects but also a policy and legislative agenda, a basic skills training framework, targeted economic activities and goods/services to be produced that would structurally transform and diversify the Jamaican economy and along with target markets.
Most important of all is that it outlines a set of basic unifying principles that the Logistics Hub Initiative is based around. It is getting a grasp on this, among other things, that will enable businesses, large and small, civil society and individuals to survive Covid and set the foundations for themselves in a post-Covid world.
This is about getting ourselves future-ready now.
Pre-Covid actions guide the way — mango exports to the USA
Many actions, activities and investments by the private sector, the Government, civil society and individuals before the Covid crisis not only set the foundation for our economic recovery but also leaves clues as to how to both weather the storm and come out stronger than ever.
An example of this is the return of mango exports to the USA.
The logistics centred economy can be seen in all the processes, economic and regulatory activities from growing, to harvesting, processing, to transportation and all the way up to payment.
All of this of course while meeting the phytosanitary standards required by the United States Department of Agriculture (USDA). In seeking and receiving clearance for mango exports in 2014 by the USDA, the Government had to work with farmers and exports to allow for mangoes to be placed as one of the 53 approved agricultural produce on the GOJ/USDA-Animal and Plant Health Inspection Service (APHIS) Preclearance list for the importation of fresh produce and plants into the USA from Jamaica.
In a logistics centred way, this highlights the importance of standards in gaining and expanding market access.
The logistics hub then would be all the infrastructure from the road to the airport, and everything in between that helped to move the mangoes and all the technology from cell phones to the Asycuda Customs Management System that helped to manage the flow from ‘field to fork.’
Like the sceptical young lady from the Diaspora Conference, you are probably doubting the connection between mango exports to the USA and Jamaica’s transformation into a logistics hub. After all, mango exports are not new, we might not have exported to the USA in about twenty years, but we are exporting to other countries, so this is not new. And you would be correct, it isn’t new.
Conclusion
That’s just it being a logistics centred economy doesn’t just involve new economic activity. It also involves making what we have already more productive and efficient. It is about making Jamaica more competitive.
During this Covid crisis this is part of what will make Jamaica resilient to weather the storm and in post-Covid world this will be a critical part of the foundations to have us bounce back and thrive.
