The $5.25bn Panama Canal expansion, which is finally expected to open in late June, thereby trebling the number of vessels that can traverse the waterway, is a game-changer for global trade. Not only will it accommodate the new massive 12,000 20-foot equivalent unit (TEU) vessels that shipping lines are increasingly deploying, it will influence when and to where these ships can be sent, thereby affecting supply chains worldwide.

The project has already led a host of island nations throughout the Caribbean to expand and strengthen their seaports to attract spin-off development such as logistics parks. Those competing for business include the Dominican Republic, Jamaica, Cuba and the Bahamas, each of which is expecting long-lasting positive economic implications from the canal project.


Locations such as Jamaica and the Dominican Republic understand that increased volumes of goods shipped via the canal give businesses weekly connections to Asia and Europe, as well as every major port in South and North America. Both Jamaica’s Port of Kingston and the Dominican Republic’s Port of Caucedo have a geographic north-south, east-west advantage for accessing large commercial markets in North, Central and South America that total more than 800 million consumers. Kingston is the world’s seventh-largest natural harbour.

Kingston's next move

Jamaica is aiming to become a logistics-based economy – logistics hub of the Americas – as well as the fourth pillar in the global shipping system alongside Singapore, Dubai and Rotterdam. To strengthen its position, last year Jamaica’s government agreed to privatise Kingston Container Terminal (KCT), a terminal in the capital city. Kingston Freeport Terminal (KFT), a subsidiary of French transportation company CMA CGM, is preparing to take control of KCT on July 1. 

“During this period arrangements are being made to acquire urgently needed equipment for use on the terminal. It is anticipated that some of this equipment will be in use shortly while others will be used towards the end of 2016 or early 2017,” says KFT spokesman C Leopold Nesbeth. “A significant aspect of KFT's takeover of the terminal is the dredging of the channel, to facilitate vessels with 12,500 TEU capacities. This is scheduled to begin towards the latter part of 2016.”  

The work will be carried out in two phases, according to Mr Nesbeth. “In the first phase, which should last for five years, we intend to improve the current equipment and the infrastructure of the terminal and increase its capacity from the current 2.8 million TEUs to 3.2 million TEUs, and in the second phase to 3.4 million TEUs,” he says. Mr Nesbeth stresses that the goal is to make a significant contribution to Jamaica’s economy and to the development of the country’s logistics operations.    

One-stop shop

Meanwhile, Kingston Wharves (KW) is part of a $2bn investment in a 15,000-square-metre logistics and warehousing facility in Jamaica's capital. The one-stop facility will operate 24 hours a day and will facilitate KW’s entry into supply chain management, manufacturing, fulfilment, product assembly, labelling and other demand-based services. It will also include administrative offices and provisions for government support service providers, such as the Jamaica Customs Agency.

KW executive director Grantley Stephenson believes the facility will be significant because the expansion will allow KW to modify shipped items, repackage and ship to other near-market destinations, and create value-added services for cargo-handling operations. “The intelligently designed warehouse will offer one-stop logistics and warehousing solutions operating 24/7,” he says. 

In January 2016, KW acquired the stevedoring business of Transocean Shipping to further extend the range of services KW can provide to shipping lines calling at the Port of Kingston.

Dominican developments

The Dominican Republic’s DP World operates DP World Caucedo Port, which is being dredged to a depth of 15.2 metres from 13.5 metres so that it can receive the world's largest vessels. Caucedo is also the site of the first logistics centre in the Americas to be developed within a port area. The Caucedo Logistics Center is a joint development by DP World and the Caucedo Development Corporation. Besides being inside the seaport, the centre is adjacent to Las Américas International Airport, making it possible for shipping companies to expedite cargo by sea or air. 

Designed to accommodate post-Panamax ships, the centre is part of a $150m two-phase investment. The first phase will cover more than 40 hectares, the second 80 hectares. The first warehouse at the facility opened in October 2015.

A further bonus is the Dominican Republic’s membership of the Central America Free Trade Agreement with the US, which gives investors access to more than 4 million consumers and a combined GDP of more than $15.4m. In addition, the Dominican Republic offers incentives for more than 55 free-trade parks.

Cuba's quiet plans

Cuba’s deepwater port of Mariel, once the site of a massive exodus to the US, is being developed into a nearly 61-square-kilometre, $1bn container terminal that includes a special economic zone. The Cuban authorities hope the port will become the biggest in the Caribbean in terms of cargo volume.

“Progress is very slow and Cuba is very secretive about [the project],” says Sarah Stephens, executive director of the Center for Democracy in the Americas,  a Washington-based non-profit organisation that supports the US opening relations with Cuba. Cuba’s infrastructure development and the attendant potential opening of trade opportunities with the US are big news, particularly with regard to the tourist trade. Container operations at Mariel Port, 45 kilometres west of capital city Havana, began in January 2014. The terminal is run by Global Ports Management of Singapore. 

Elsewhere in the Caribbean, Freeport Container Port (FCP) in the Bahamas, operated by Hutchison Port Holdings, is strengthening its position as a trans-shipment hub for the eastern seaboard of the Americas. The World Bank recently noted that FCP is the second most efficient port in the Caribbean behind Puerto Rico’s Port of San Juan, and that it “will have major trans-shipment growth potential following the completion of the Panama Canal expansion”. FCP particularly benefits from its geographical proximity to the US.