T&T boasts of over 100 years of being one of the largest exporters of oil and gas derivatives in the world. We remain silent, however, on the fact that for over 100 years, our oil and gas has been shipped to the international market on vessels that are not owned or operated by T&T companies. T&T sells its natural resources but does not benefit from the lucrative freight rates that can be earned in taking our goods to market.
After 100 years of shipping our oil and gas internationally, there is still no real maritime awareness in T&T. It seems we have resigned our economy to only benefit from our oil and gas resources but there is opportunity to continue benefiting from our resources, even after it leaves our shores.
The question is: why after 100 years we are not benefiting from oil and gas freight rates? The fact is, the energy industry and the maritime/shipping industry are interlocked. They are connected by an umbilical cord. How does our energy earn revenue for us unless it is shipped to the customer?
The reliance on our natural resources to fuel the economy seems to have retarded our ability and/or our interest in aggressively investing in the sustainable development of the maritime industry to diversify the national economy.
In the wake of falling energy prices and collapsed markets around the world, we may be forced to explore innovative means to generate revenue through industries other than oil and gas lest our economy also collapses. Budgets past have highlighted several industries for economic development placing some emphasis on the maritime industry. Yet, to date, no substantial initiatives have been undertaken to capitalise on the industry's potential.
So, one might ask, what (if any) current and or potential opportunities exist for T&T's maritime industry?
Some obvious prospects exist for maritime development including the expansion of the shiprepair industry and ship registry. Others, like port operations and container transshipment, are long-term prospects requiring significant capital investment but are very worthwhile areas for investment consideration. Ship ownership seems to be the least obvious for investment yet it should be the most readily accessible area for economic growth.
The prospects for ship ownership seem to have eluded us. T&T is a world leader in the production and export of methanol, ammonia and LNG. This alone presents opportunities for locally owned and operated chemical and LNG carriers. It is both tragic and regrettable that for the hundreds of vessels calls at our ports annually to transport these commodities produced in T&T, none of the products are transported in a vessel that is locally owned. Fleet ownership would ensure that T&T optimises the earning potential of our commodities.
Fleet ownership is not a new concept. Recall SCOTT (Shipping Company of T&T).
SCOTT was a state enterprise that owned and operated methanol tankers, MT T&T and MT Harold La Borde, which was constructed by the Methanol Company (TTMC). Other than these two tankers, SCOTT managed two tankers for the National Petroleum Company. The company ran a reliable and profitable tanker operation serving markets in the US and Europe, until its closure from external pressures as a result of crew conduct.
SCOTT's issues were not exclusive to that company, but closing its doors seemed the easy option because oil and gas money was no problem. Since it closure almost 20 years ago, we are yet to see are locally owned and operated shipping company that trades internationally.
As local ship ownership is challenged, so too has local ship registry suffered from archaic and bureaucratic regulations that does not encourage locally owned cargo ships from being T&T flagged vessels.
Unless local laws and ship registry are aligned to international conventions, regulations and practice, we will continue to drop the ball on the road to becoming a maritime nation and exploiting real business opportunities in so doing. Getting past the talk of a viable maritime industry can mean the dawn of a local cargo ship owners and a local ship registry. These areas of business are thriving internationally, why not locally?
Transshipment/cargo consolidation
Besides ship ownership, T&T is opportunely positioned at the end of the Caribbean island chain within close proximity to the South-American continent. Whilst this may sound clich�, it is an important fact that we need to leverage. The much-anticipated expanded Panama Canal can provide new opportunities for T&T to establish itself as a transshipment hub within the region, providing a liner transshipment and cargo consolidation service to our Caribbean neighbours.
While the focus has been on the maritime industry and shipping, the expansion of the industry within the domain will have knock-on benefits to other synergetic industries such that T&T will become a key nodal point in the movement and distribution of cargoes. Should Trinidad up its game in the transshipment and cargo consolidation, all facets of transport may benefit.
Ship bunkers & ship services
It is difficult to accept that we could possibly have an awareness of the maritime industry and not know its enormous potential. All ships need fuel and many other goods and services to operate. The more ships come to T&T, the more opportunity to sell our goods and services.
The growth of the maritime industry in T&T will result in the growth of business opportunity for many.
What is holding us back?
Why are we not facilitating opportunity in this industry when the potential bunker market in T&T is estimated at 1,500,000 barrels per month at US$55 per barrel?
We currently handle less than 20 per cent of this potential market. The enormous barriers to entry have kept this industry stifled. If there were even a marginal shift in government's focus towards developing the maritime industry, there will also likely to be a favorable shift in the country's GDP. Yet another opportunity to monetise our oil and gas resources is being overlooked because it has fallen just on the borderline of the oil and maritime industries, too far from traditional oil and gas revenue streams.
How do we move forward and what are the challenges we may face?
One of our greatest achievements in the last ten years has been the establishment of the Centre for Maritime Studies at the University of T&T (UTT).
From 2006 to present, the number and quality of qualified maritime nationals to manage ships and ports has improved considerably. The State, through the UTT, has invested in the education and training of maritime professionals to the standards of international organisations like the MCA (Maritime and Coastguard Authority) and the IMAREST (International Institute of Marine Engineering, Science and Technology) thus investing in the potential for innovation and progressive thinking in the industry. A critical success factor is being addressed as we are now producing competent maritime professionals.
The issue of qualified and competent labour should be a thing of the past in a few years to come, thanks to state initiatives for technical and vocational training. Managing the cost of this labour will, however, be necessary if we are to become an attractive hub for maritime business.
In moving forward, we must acknowledge our deficiencies, whether it is a lack of political will; a lack of appreciation of the potential value of the industry to GDP; the bureaucracy of trade facilitation, lack of enabling legislation; lack of planning and execution; inadequacy or non-existence of a progressive institutional framework; reformation of labour or simply know-how.
Foresight, planning, implementation and management are paramount for the industry's development process.
Many more sub-sectors of the maritime industry can be discussed for development in T&T. But the industry is global by nature. We, therefore, have to fit into that global picture and the pace of a stream that already flows. T&T still has an opportunity to get on board and partake in the benefits of the industry.
With every passing year, the gap between maritime economies and others grows. In the face of significant opportunities in the maritime sector, is T&T indeed going to continue to allow its future to be decided solely by oil and gas?