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CMA CGM wins concession for Kingston Container Terminal

The French ocean carrier says Kingston will be major transhipment hub after the expanded Panama Canal opens next year.

   CMA CGM and its Terminal Link affiliate have signed a 30 year concession for the Kingston Container Terminal and will make Jamaica the French ocean carrier’s hub in the Caribbean.
   The deal makes Kingston one of the major transshipment hubs in the Caribbean, said CMA CGM, and a strategic location, especially after the widened Panama Canal opens next year. The Port Authority of Jamaica noted in a statement its terminal is “just 32 miles from the trade routes that traverse the Panama Canal.”
   “Located at the entrance of the canal, at the crossroads of the North/South and East/West lines, the new terminal will offer a deeper draught where larger vessels will be accommodated,” said CMA CGM. It added the carrier plans to add additional equipment to allow development of transshipment operations via secondary lines.
   The Port Authority of Jamaica will remain landlord under the concession it has signed with Kingston Freeport Terminal Ltd., which is 40 percent owned by CMA CGM and 60 percent owned by Terminal Link. Terminal Link is a joint venture in which CMA CGM owns 51 percent and China Merchants Holdings International owns 49 percent. At the end of the 30 years, the concessionaire will hand back the terminal and any assets it purchases to the government of Jamaica.
   Farid T. Salem, CMA CGM group executive officer, signed the concession with the Port Authority of Jamaica on Tuesday at an event attended by Portia Simpson Miller, the prime minister of Jamaica, and Jean-Pierre Bel, a special representative in Latin America and the Caribbean for the president of France.
   CMA CGM said a planned terminal expansion will turn Kingston into one of the Caribbean’s top five ports and the Kingston Port Authority said the concessionaire is expected to invest approximately $509 million in the terminal.
   In the first phase of the expansion, berths will be deepened to 14.2 meters within five years and capacity will be expanded to 3.2 million TEUs from 2.8 million TEUs today. In a second phase, the berths would be deepened to 15.5 meters and capacity increased to 3.6 million TEUs.
   The port said that once complete, “all vessels that traverse the Panama Canal will be accommodated” at Kingston Container Terminal.
   According to the port’s annual report for 2013-2014, Kingston handled .4 million TEUs for the year, a decrease of 13.6 percent from the previous year.
   The adjacent chart, built with data from ocean carrier schedule and capacity database BlueWater Reporting, shows all direct region-to-region liner services currently calling at Kingston, the number of vessels that serve on each loop, and the average capacity of those vessels in TEUs (click to enlarge).

   CMA CGM said it currently accounts for about 35-40 percent of the volume in Kingston and that the terminal will continue to be “open to all shipping lines benefiting from the same quality of services and treatment without discrimination.”
   The Port Authority of Jamaica said it asked 25 companies to tender offers for the concession and that in addition to CMA CGM/Terminal Link, four others responded with offers: PSA, DP World, Ports America, and consortium that included Stevedoring Services of America, Kingston Wharves Ltd. and Israeli ocean carrier ZIM, the port’s largest customer.
   However, the port authority said the SSA consortium bid was “deemed to be incomplete according to pre-established guidelines” and Ports America also was not prequalified during the process. In the end, only CMA CGM/Terminal Link ended up bidding.

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.