Strengthening the Transportation Spectrum within the Supply Chain in the Caribbean
Dear Editor,
The concept of supply chain is often overlooked but the aim of this letter is to present supply chain and supply chain management in a new light with a focus on the Caribbean economy. When craving a sweet treat, it’s easy to walk to the nearest corner shop and purchase a packet of Oreo’s or maybe something more local like a good old-fashioned rock bun. The cocoa beans, the sugar cane, the wheat for flour and even the imported plastic for packaging is easily forgotten. Whether simple or complex, supply chains exist wherever products or services are offered.
Historically, the Caribbean has been heavily dependent on tourism to support its economy. Between 1970 and 2017 the Caribbean had increased tourist visits from 4 million visitors to 26 million visitors per annum (Acevedo et al, 2017). Although a tourist relaxing on the beach and sipping rum punch might be the key visual when thinking of tourism, supply chain is a silent actor hiding in the wings.
The network of people and companies involved in creating the finished lounge chair, the umbrella and even the English Harbour Rum Punch is the Supply Chain. Supply Chains also goes past the point of manufacturing the chair. It also includes the metal mined for the legs up to the point of the finished product and how it is transported to its final user. Supply Chain Management includes planning, sourcing raw materials, refining into a finished good and distributing to the consumer.
Warehousing, inventory management, transportation and communication are also crucial to effectively managing the supply chain. These aspects also contribute to the economy by demanding job creation and therefore creating a workforce to fill these positions. Hence, there is a growing trend of professionals trained in logistics, supply chain management, and safe cybersecurity practices.
For example, the University of the West Indies in Five Islands, Antigua has offered a new online course certifying persons within the procurement field and other curious persons in Procurement and Supply Chain management.
Finished goods and services can then be bought, sold, and exported in foreign currency creating cash flow and economic growth. One major threat to Supply Chain Management in the Caribbean is Transportation. Transportation is simply moving goods from one place to another whether by air, sea, or ground. Transportation costs and speeds readily fluctuate due to changes in oil prices, natural disasters, political instability, war, and widespread health crisis. Transportation also includes the efficiency of port of entries and the infrastructure available to them.
A study analyzing the effect of the 2005 hurricane season on US ports found that a single Category 1 storm hitting a port incurred similar additional costs as a 4% tariff (Systma, 2020). Because disruptions to external trade routes are beyond the control of the suppliers, distributors, and consumers it can force a standstill on particular products disrupting the balance of supply and demand in a market. These disruptions trickle down to the consumer in the form of shortages, longer wait times for products and added costs.
The chief of the Regional Unit of International Trade and Integration Unit (UN-ECLAC) stated that the war in Ukraine and Russia has caused trade disruptions manifested by increased import prices on wheat, oil and energy (Lima, 2023). This has already cast a shadow on Antigua and Barbuda, located over 6000 miles away from Russia. The West Indies Oil Company reported that Antigua will face a seven percent increase in gas prices as of March 22nd, 2023 (Antigua Newsroom, 2024). This cost will be felt by taxi drivers, cruise and charter companies, the watersports industry, the liquor industry and find its way unto the extra dollar for a rock bun or an extra three dollars for a bottle of English Harbour Rum.
Nevertheless, all is not lost. There are ways the Caribbean can fortify itself from trade disruptions. These include establishing specialized programs in universities and vocational institutions focused on logistics and supply chain management. The workforce will be better able to implement creative solutions to work around trade crisis. They can also encourage collaboration between international and regional experts to implement data analytics tools for real-time tracking and monitoring of goods throughout the supply chain. Thirdly, companies can preemptively seek out alternative shipping routes or suppliers in the event of a trade disruption. It is also beneficial to educate the public about supply chain and how it affects them. They can readily brace for disruptions and reallocate their resources during market shortages or price increases. Letters like this one are already contributing to that goal.
Together, let’s advocate for a secure and efficient supply chain – the backbone for a thriving Caribbean.
Sincerely,
The Supply Chain Enthusiasts
Josh Donaldson
Sanchez Martin
Electra Andrew
Less Bowers Anthony
Melville Samuel
Onalie Lares