Under the guidance of manager Darwin Telemaque, Antigua and Barbuda’s Port of St John’s has been voted best in the Caribbean for the last two years running. Here, he talks about the challenges of operating a domestic port and how he hopes to build on his success by further upping efficiency, improving management and expanding facilities to transform the installations into a regional logistics hub.
The Port Management Association of the Caribbean (PMAC) recently named Antigua and Barbuda as having the top port of the year. What makes the country’s port stand out as the best in the Caribbean?
We are trying to redefine the purpose and mission of the port. Our main priority is that we have to ensure that the port performs its contribution in social transformation. We need to ensure our staff is properly equipped, properly trained, properly paid and that the benefits package is good enough that you’re properly taken care of when you retire. Second, we also want to ensure that there is economic enhancement and we want to do that by becoming more efficient to the shipping lines, by improving the services we deliver to them. And then as we enhance service levels and reduce costs, they can pass that on to businesses, which in turn can pass the savings on to customers.
What we have done over the last three years is cut expenses significantly. We have become more efficient in collecting revenues that we have needed to collect, to the point where we have grown our revenue over the last four years by almost $14 million and not raised any rates. Our in-house operation on the quayside and our management of our financials has demonstrated that we have had the greatest improvements in the Caribbean in these areas and therefore, although we are not very pretty to look at, we work very hard to be efficient and that’s why we are port of the year. And with the enhancements we’re going to be doing, those services are going to be carried out with a greater level of efficiency, and so we expect to keep the PMAC cup here for a while.
Could you elaborate on your theory of domestic ports?
The requirement to use water is quintessential to our survival. We have no bridges that connect us. We don’t produce 99 percent of what we consume, therefore most of the things we require for our daily existence have to be brought in. The primary option utilised on every island is marine transport because air transport is limited and expensive. The reason we have started looking at the concept of domestic ports is that we are realising that there are specific, different characteristics that are quite prominent within the ports in the region.
First of all, most of the islands, particularly outside of Trinidad and Jamaica, have single ports and they basically serve the domestic population. There is very little competition from one island to the next in terms of port activity because, regardless of what vessel the cargo gets to a port on, in most instances the volumes belong to that country. There is very little need for trade shipment and therefore very little need for competitive interaction between these ports. That means that one of the most prevalent components of a regulated environment is missing within domestic ports: competition. Most of these ports in the region are also single ports – there’s only one. There is nothing requiring that the ports improve other than the desire of the port itself or pressures from the shipping line or agents. In the global environment ports are constantly having to adjust because, by nature of the competitive environment that exists, if you’re not able to provide the level of productivity and efficiency that ships require, you’re going to lose business. In our islands, the ship must come to the one port that exists.
We work very hard to be efficient and that’s why we are port of the year
How then does that port emerge to become efficient and create a productive environment that will lead to better fortunes for the ships that come in and the citizens who live on that island?
That’s the concept that needs to be evaluated. In many instances, when the port improves its efficiency, the shipping line profits but the shipping line may not turn around and reduce rates to the market. Also, if the shipping line does respond and reduces rates to the importers, then the importers themselves may not pass those savings on to citizens. You can call it a vicious circle. But the key thing about domestic ports that needs to be made clear is the word ‘domestic’. They belong to the people of that state and if all the efficiencies, productivity improvements and enhancements that happen at that port do not touch the citizenry, the port is not meeting its mandate. That continues to be the biggest challenge in terms of how ports are structured, managed and positioned. The shipping line feels that it has no basis to engage the port. The port does whatever it wants, and in the end, the citizens of that state end up paying because the shipping lines have a higher risk, low productivity, are losing money and so keep raising rates. This has created a significant issue in relation to foreign direct investment and the attractiveness of the destinations from the standpoint of the ease of doing business reports published by the World Bank.
What about the role of the United Kingdom in port operations and development in Antigua and Barbuda? Is there room for more funding, more manpower, or more technical expertise? How would you like to pursue those potential partnerships in the wake of Brexit?
The current structures that we have at our ports are all of UK origin: our tariffs, our port acts, all of our laws are UK-based. One of the things we have not done well is pursuing cutting-edge modern advancement in terms of training, improvements in manpower, improvements at the line staff and executive levels. We’ve not seen the type of interactions that are made possible by the high-level of expertise and experience in the UK. It would be very useful to have some of that level of expertise and experience transfer into our small markets. Being a domestic port means you don’t have too many people exposed to that sector and your knowledge is limited. So having port exchanges would be a good concept. We’re hoping that with Brexit, the UK will find its former colonies once again a source to be engaged with.
Can you talk about what you have down the line in terms of your vision, strategy and what’s coming up next? Where are there opportunities for overseas investors, specifically from the UK?
One of the things we’re doing with the new port is creating a container terminal, a logistics part and a container freight station (CFS). All these areas are filled with investment potential. On the container terminal side, we’re going to have opportunities for additional heavy equipment: cranes, trucks, stackers, forklifts. We’re going to have an additional three births, which means there will be avenues for more shipping lines to come into the region, drop their cargo off and have a dedicated space not encumbered by various factors as most of the markets in the region are. And then outside of that, we have the warehouse: the CFS is an area for investment in both its construction and operational phases because we’ll be looking to transform the manner in which we manage the warehouse and try to provide a more private face in delivering services to the public. With the port authority conducting that service, it makes it difficult to see the face of the company – you bring your cargo to Antigua and it’s no longer your face that meets your customers, it’s that of the port authority. That difference in who delivers the service at the last mile creates a totally different level. If it’s all the same company, you have a higher quality of service, greater branding, greater product differentiation and possibly greater competition that would also lead to better costing on the warehouse side.
In the logistics part, we are looking to ensure that the marketplace is afforded the opportunity to bring in an inventory, store it in a bonded facility, and manipulate it if necessary with small light industries. We can facilitate distribution locally to the islands around us, as well as supply fulfilment services where we do the final packaging of various items and move them on. We believe that our location within the archipelago makes it so that having a warehouse and a logistics part within the same environment creates a great platform to springboard from here into other regions. With the emergence of the Organisation of Eastern Caribbean States (OECS) single economic space – of whose Port Management Committee I am the chairman – we will soon be able to have cargo imported from international locations, processed through customs in Antigua and then shipped out to these islands without further checks because they’re already been cleared. Knowing that this is the direction the OECS is heading, we’re also positioning Antigua to be the initial spot where all of the goods come in and, once they’re here, we can determine if we are going to use maritime or air services.
Having just built one of the best airports in the region, we are now about to build the newest and most comprehensive container terminal with additional services. This would give us the perfect logistic platform from which to springboard because Antigua would provide a dominant air service throughout the region, which it does through Liat and other carriers. And from the American perspective, we would have the connections that would give us both air and maritime superiority within the logistics context of the region.