AJOT Insights

Economist sees East, Gulf coasts served by Cuba, Nova Scotia transshipment hubs

Feb 02, 2017

The U.S. East and Gulf coasts can expect to be significantly served by a pair of transshipment hubs – ideally in Cuba and Canada’s province of Nova Scotia – a leading port industry economist said today.

Robert W. West, Waltham, Massachusetts-based chief senior consultant for the Colombia-based DUAGA consulting firm and former Worley Parsons Group principal ports and marine strategist, offered the theory in the opening presentation of the 10th annual Planning for Shifting Trade Conference in Tampa, Florida.

West said Cuba’s Port of Mariel is “in many ways the most ideal location” for a major Caribbean transshipment center, while he expects one or more of a trio of Nova Scotia port developments serving as a northern hub. In response to a question from the American Journal of Transportation, West expressed uncertainty regarding the potential impact upon future Cuba transshipment prospects of Trump administration policies and the recent threats by Florida Gov. Rick Scott to pull funding from Sunshine State ports engaging in commerce with Cuba.

“The point here is not a political point,” West said. “The point is an economic point.

“As we know, politics can mess things up, but I’m not saying it’s going to happen here,” he continued. “To me, Cuba looks like a great opportunity for transshipment.”

West said Nova Scotia transshipment opportunities include at the Macquarie Group’s Halifax undertaking, facilities being developed by DP World at Saint John and/or the future Novaport project in Sydney in which Ports America has recently expressed interest.

He said new leadership in Washington does combine with factors such as consolidation of global containership capacity to create a future outlook he termed “certainly uncertain.”

Economist Robert W. West addresses the Planning for Shifting Trade Conference in Tampa. (Photo by Paul Scott Abbott, AJOT)
Economist Robert W. West addresses the Planning for Shifting Trade Conference in Tampa. (Photo by Paul Scott Abbott, AJOT)

Noting that nearly half of all the world’s containership capacity is in the hands of the three biggest shipping lines – Maersk/Hamburg Süd, Mediterranean Shipping Co. and CMA CGM/APL – West said he anticipates that three or four major alliances will ultimately control between 75 percent and 80 percent of global container volume.

West said he believes 2017 freight rates “will remain lower than we would want them to be, with too much capacity chasing too little demand.”

Of the 325 ships, representing 8 percent of world fleet capacity, currently not in operation, West said, “It’s too much. We really need to squeeze that out.”

West said that, with the Transpacific Partnership having been torpedoed, he sees potential for expansion of the Pacific Alliance, which currently includes Mexico, Colombia, Peru and Chile and is likely to soon add Costa Rica and Panama, as well as Asian nations. But West said his suspicion is that the United States will not join the Pacific Alliance.

The overall 2017 economic outlook for the Western Hemisphere is seen by West as improving over 2016, including with 2.9 percent U.S. growth compared with 1.6 percent last year.

“We’re pretty optimistic; I can’t say we’re exuberant,” he said. “2017 should be an up year for cargo, for consumers, for government expenditures, all of which should stimulate the economy.”

The Feb. 2-3 conference, hosted by Port Tampa Bay, is presented by the American Association of Port Authorities and the Transportation Research Board in partnership with the Florida Chapter of the American Planning Association and in cooperation with the U.S.; Maritime Administration.

Comprehensive coverage of the conference is slated to appear in the Feb. 27th edition of the American Journal of Transportation.

Author Photo
For more than a quarter of a century, Paul Scott Abbott has been writing and shooting images for the American Journal of Transportation, applying four decades of experience as an award-winning journalist. A graduate of Northwestern University’s Medill School of Journalism, with a master’s magna cum laude from Trinity Evangelical Divinity School, Abbott has served as president of chapters of the Propeller Club of the United States, Florida Public Relations Association and Society of Professional Journalists. Abbott honed his skills on several daily newspapers, including [em]The Cincinnati Enquirer, The Richmond (Va.) News Leader, Albuquerque Journal and (South Florida) Sun-Sentinel, and was editor and publisher of The County Line, a weekly newspaper he founded in suburban Richmond, Va.[/em] A native Chicagoan, he is a member of American Mensa and an ever-optimistic fan of the Chicago Cubs.