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Transport
Research carried out for the ACS shows that the proportion of transport costs in the total cost of imports for the countries of the Greater Caribbean is two to three times the world average. In other words transport costs are 10 to 15 percent the cost of imports for Greater Caribbean countries compared to a world average of around 5 percent, and an overall Latin American average of around 7 percent. Within the Greater Caribbean, the cost is highest for CARICOM countries, 12 percent on average[15].

Why is this? Essentially because of the trend towards ever larger cargo ships, containerisation, and the growing role of transhipment in maritime cargo. Perversely, the operation of economies of scale and falling unit costs in maritime transport has hurt smaller countries, because they now have to import a higher proportion of their cargo via transhipment ports, bearing these extra costs. This increases the average cost of intra-regional shipping in a region such as ours, which has a small number of relatively large countries and a large number of relatively small countries. In effect, the port of Miami has become the principal transhipment centre for the Greater Caribbean—the main hub of maritime transport for the region.

What is the answer? We in the ACS believe that costs can be reduced if we make better use of port facilities within the region. A number of regional ports have already been expanding their capacity to handle containerised shipping in a bid to establish themselves as major transhipment centres: Cartagena in Colombia, Coco Solo and Manzanillo in Panama, Kingston Jamaica, Santiago de Cuba, Puerto Cabello in Venezuela, Port of Spain, Bridgetown. One unintended result of this has been low utilization of capacity and higher unit costs.

Governments in the region, in their capacity as owners or investors in port facilities, will need to work closely with one another and with the shipping lines serving the Caribbean with the aim of securing higher capacity utilization and reduced unit costs. Another action that would help is to make more information on existing port facilities in the region accessible to shippers and freight forwarders, utilising up to date technology. Development of multi-modal transport, which combines maritime, air, road and rail, would also increase the speed of intra-Caribbean shipments and make sourcing within the region more attractive to importers. These are all areas in which action is been taken within the ACS framework, working with the Caribbean Shipping Association, one of the principal private sector organisations in maritime transport within the region.

So which is the city with the most daily services to major ACS airports? You guessed it: Miami, with 64 percent, followed by San Juan Puerto Rico, with 43 percent[16]. In other words, a similar situation obtains as with maritime transport: Miami is the de facto hub of the Greater Caribbean. Small wonder that some people take the view that Miami is not only a Caribbean city, but is its true capital city! Some would doubtless argue that this is inevitable and even desirable, in the age of globalisation. But this is a road that leads to increased concentration of wealth, income, education and job opportunities at one geographical pole, while the hinterland regions of the Caribbean basin are left behind in persistent poverty. None of us born in the region has an automatic right to live in Florida, or to work there, or to study there, or to vote there. So national, sub-regional and regional development will remain important for the provision of opportunities to our population.

But I digress. In the subject area of air transport, what is emerging is the scope for development of points such as Barbados and Panama City as major sub-regional hubs that are directly linked to one another and with a network of subsidiary hubs based in other major transit points such as Port of Spain, Caracas, Bogotá, Guatemala City, Mexico City, Havana, Montego Bay, San Juan, and St John’s Antigua.

One issue that requires urgent attention is the regulatory regime in the form of air services agreements, which are mostly designed to protect the interests of national carriers rather than to facilitate economical and convenient intra-regional travel. This has to change: existing agreements will need to be modified or better still, a regional agreement on the matter which liberalises traffic rights and provides incentives for the development of intra-regional services should be negotiated.  Already, the ACS Ministerial Council has approved a document embodying the Principles of a Common Air Transport Policy in the Caribbean Region. Now the focus is on negotiating a legally binding agreement on an ACS Air Transport Policy that would provide the framework for the development of intra-Caribbean services. The draft of such an agreement is already prepared, and will be the subject of a special meeting in early May.

Second, the existing sub-regional carriers like BWIA, Air Jamaica, and COPA and TACA in Central America, will need to cooperate with one another in matters such as code sharing, service scheduling on major routes, frequent flier programmes, bulk purchase of supplies and sharing in ground services.  Our experience in the ACS in trying to promote this suggests that it is not easy to achieve, for there are several tricky issues involved.  There is a need for regional airlines to look at the bigger picture, to temper their competitive rivalries by considering the potential gains from collaborating across the region as a whole. It should not be difficult to work out which airline is the principal beneficiary of travel within the Greater Caribbean region. I will give you one clue; it is not a Caribbean airline, it is an American airline!

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