June 4, 2024
Logistics and transportation are fundamental to the Caribbean’s economic integration into global trade. They are essential for expanding market reach and reducing operational costs. The recent UNCTAD Global Supply Chain Forum in Barbados provided an opportunity to examine the challenges and opportunities within these sectors, which included a panel discussion, hosted by the Caribbean Export Development Agency, focusing on building resilient supply chains. Let’s delve into the key insights and takeaways from this event.
The Achilles Heel of Caribbean Logistics and the Transportation Sector
The Caribbean faces unique challenges in logistics and transportation, shaped by its geographic and economic conditions. The COVID-19 pandemic starkly exposed these vulnerabilities, highlighting the region’s heavy reliance on international trade and tourism. Moreover, the current global political landscape, with its geopolitical tensions and trade disputes, adds another layer of complexity to economic stability in the Caribbean.
Darwin Telemaque, CEO of the Antigua Port Authority, emphasized the urgent need to modernize port infrastructure. Inefficiencies such as outdated infrastructure, inadequate equipment, and bureaucratic hurdles significantly hamper the region’s logistics capabilities. Telemaque highlighted Barbados Port Inc.’s recent success in reducing costs by 17% through structural changes as a model for other ports. Modernizing these facilities is crucial for improving containerization and overall supply chain efficiency.
The Role of Technological Innovations and Strategic Investments
Strategic investments and technological innovations are essential for transforming the logistics and transportation sectors in the Caribbean. Embracing advanced shipping technologies and streamlining customs processes can significantly enhance infrastructural efficiency and sustainability. Telemaque’s call for modernizing port infrastructure underscores the importance of such investments. Implementing automated systems and upgrading port equipment can reduce operational costs and boost productivity, positioning the Caribbean to compete more effectively within the global market.
Michelle Belgrave, Customs and Trade Compliance Director for DHL Express Caribbean, highlighted the importance of comprehensive policy frameworks and stakeholder participation in facilitating smoother export processes. She emphasized the necessity for SMEs to understand the Harmonized System (HS) code for customs and compliance, which DHL assists with, ensuring seamless shipping. Programs like DHL’s SheTrades, aimed at helping women entrepreneurs in Barbados, are crucial for fostering technological adoption and innovation among SMEs.
The Vital Role of SMEs in the Caribbean Economy
Small and medium-sized enterprises (SMEs) are the backbone of the Caribbean economy, making up 99.5% of businesses in the region. Yet, only 10% of these SMEs export their products, which shows there’s plenty of room for growth. Belgrave emphasized the critical role of SMEs and the need for enhanced support to improve their export capabilities. Streamlined export processes, facilitated by comprehensive policy frameworks and technological assistance, can help SMEs overcome barriers to international trade.
Tamara Gibson, Managing Director of Native Caribbean Limited, shared her experience of growing her business by 247% despite the challenges posed by the pandemic. She highlighted the high costs of exporting, especially for small products where shipping costs often exceed product costs. Involving micro businesses in policy discussions and creating opportunities for bulk shipping are essential strategies for reducing costs and enhancing the global competitiveness of Caribbean SMEs. Nicholas Bynoe, Owner of Old Duppy Foods Inc, echoed the same sentiments as he highlighted the challenges of high shipping costs and maintaining consistent raw material supply, emphasizing the importance of building legitimacy for Caribbean brands in international markets.
What is the takeaway?
Building resilient supply chains is crucial for the Caribbean’s future prosperity. Addressing the challenges in our logistics and transportation sectors through technological innovations and strategic investments can boost economic growth and job security. The insights from the UNCTAD Global Supply Chain Forum provide a clear roadmap for developing a robust logistics framework that supports sustainable economic activities. By modernizing infrastructure and supporting SMEs, the Caribbean can better integrate into the global economy and achieve long-term economic stability