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Economie Impact Study (EIS®) for tbe Maritime Sector of
tbe Netberlands Antilles
Cruise and Container Markets
Prof. Or. Chris Peeters Drs. Lars Couvreur Drs. Gustaaf De Monie
Hir. Frank Hendrickx Ing. Karel Joos Drs. Jan van der Linden
Bibliotheek TU Delft
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9
Cruise and Container Markets
Prof. Dr. Chris Peeters Drs. Lars Couvreur Drs. Gustaaf De Monie
Hir. Frank Hendrickx Ing. Karel Joos Drs. Jan van der Linden
Delft University Press
1998
Published by
Delft University Press Mekelweg 4 2628 CD Delft The Netherlands Tel.: +31-15-2783254 Fax: +31-15-2781661 E-mail: DUP@DUP.TUDelft.NL for
Policy Research Corporation N.V. Jan Moorkensstraat 68 B-2600 Antwerpen Belgium Tel.: +32-3-286.94.94 Fax: +32 -3-286.94.96 E-mail: policyresearch@innet.be ISBN 90-407-1736-2
Keywords: maritime, cruise, container shipping, Netherlands Antilles
Copyright © 1998 by Ministry of Transport, Directorate General Freight Transport
All rights reserved. No part of the material protected by this copyright may be reproduced or utilized in any form by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system without written permission of the owner of th is copyright. Permission may be obtained at the following address: Ministry of Transport, Contractfunctionary Maritime Traffix, P.O. Box 20904, 2500 EX The Hague, The Netherlands
Printed in the Netherlands
Policy Research Corporation N. V. based in Antwerp, Belgium, specialises
in providing both economie and management consuiting support to public and private decision makers. Policy Research aims to pro duce scientifically reliable studies which are at the same time practical and ready for imp le-mentation. The studies are often considered projects, with the formulation and implementation of policy recommendations as the main trademarks of
the company. Over the last decade, Po/icy Research has become a
recog-nised 'think-tank'. The main areas of expertise are transport economics, government policy and strategie management. Many of the studies, both carried out for governments and private companies, prove to be extremely influential.
Prof. Dr. Chris Peeters is Executive Director and President of the Board of Directors of Policy Research. Prof. Peeters also teaches public finance, in-ternational finance, maritime economics and transport economics at the Fac-ulty of Applied Economics of the University of Antwerp, where he is at-tached to the Department of Transport Econom ics. Prof. Peeters is a well-known expert on the maritime industry and on policy analysis in genera I, and is an extern al advisor to several public and private policymakers. He is the author of influential strategie papers and scientific publications, includ-ing an analysis ofthe Dutch shippinclud-ing industry and policy.
Drs. Lars Couvreur is a Research Associate at Policy Research. He studied economics at the University of Amsterdam and specialised in Traffic & Transport Economics and Marketing Management. He has acquired interna-tional experience in the field of policy making for the shipping sector. Countries and their respective Governments he has advised, or whose mari-time policy is in the process of being evaluated, include the Netherlands, Germany, ltaly, the United Kingdom, Belgium and the Netherlands Antilles.
Drs. Gustaaf De Monie is the Research Director with Policy Research. He is a renowned international expert in port planning and management and a well-known advisor to amongst others The World Bank, UNCTAD, ILO and EBRD. His role as a manager of a large terminal operating company pro-vided him with substantial practical transport and logistics know-how. He acquired extensive field experience as an international consultant responsible for the development of port master plans and the design of operational sys-tems for specialised terminals.
Hir. Frank Hendrickx is Senior Research Associate at Policy Research. He holds a degree in Commercial Engineering, summa cum laude from the Uni-versity of Antwerp. Mr. Hendrickx gained consuIting experience in the field
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>l.LI _ _ aa:J.IIl-'U _ _ 'ur ... "·_ ... U1:'-<of maritime transport and shortsea shipping by working on a number of studies and research projects. He is also the co-author of strategy papers on container terminal management arrangements and on issues relating to the strategic positioning of shipping lines.
Ing. Karel Joos is a Research Assistant at Policy Research. He graduated from the Belgian Royal School of Cadets and the Royal Military Academy and holds a degree in construction engineering and financial economics. Before he joined Policy Research, Mr. Joos was a project officer with the Directorate of Military Constructions and performed input-output analysis on the Belgian army budget. In his present function, he specializes in using input-output analysis to evaluate and optimize government policies relating to maritime sectors.
Drs. Jan van der Linden is Research Associate at Policy Research. He graduated in Regional Economics at the Erasmus University Rotterdam. Af-terwards he worked at the University of Groningen, where he studied the developments of the intercountry economie interdependence in the European Union. In the autumn of 1998 he will take his doctoral degree on this study. He is a specialist in the field of input-output analysis and in the development and implementation of analytical methods for the studies carried out by Pol-icy Research.
This Final Report consists of two volumes:
- Volume I 'Conclusions and Recommendations '; - Volume 11 'Cruise and
Container Markets '
The most important conclusions and recommendations are pre-sented in the Executive Sum-mary.
PREFACE
ACKNOWLEDGEMENTS
Policy Research Corporation NV. would like to thank all Key Play-ers who actively collaborated by providing relevant information, by discussing related issues with the project team or by any other action that proved helpful.
STRUCTURE OF TUE REPORT: GUlDE FOR TUE READER
The Final Report of the Economic Impact Study (EISFJ) for the Maritime Sector ofthe Netherlands Antilles consists oftwo volumes: - Volume I 'Conclusions and Recommendations', which is focusing
on all aspects of the internal situation on the Netherlands Antilles: the country's general economie performance, its maritime sector and related government policies and the economie impact of the five policy scenarios and, finally, conclusions and recommenda-tions;
Volume 11 'Cruise and Container Markets ' presents an elaborate (external) analysis of the maritime situation in the Caribbean re-gion, focusing on trends and developments in cruise (tourism) and container shipping.
Both volumes are preceded by an Executive Summary comprising the most important aspects and conclusions ofthe study.
Economic Impact Study (EIS®) for the Maritime Sector of the Netherlands Antilles
TJze policy recommendations are presented in detail in imple-menfatÎon matrices, which do nol merely con/ain po/icy rec-ommendations. bilt a concrete plan for their implementa/ion as weil (see Chapter XI. Volume 1).
Fol' more detailed inJormation on a subject, references to the relevant chapter oJ the report are given in the last column oJ Ihe implementaLion matrices.
Finally, the text boxes serve as a gllide to the reader.
The general conclusions and recommendations of the project are pre-sented in Chapter XI of Volume /. The policy recommendations are presented in implementation matrices, which not only contain the recommendations, but also a concrete plan for their implementation.
The implementation matrix identifies the competent level(s) of gov-emment and provides an overview of the concrete actions required; moreover, it prioritises the proposed measures. Finally, the matrices contain 'Milestones', which make recommendations with respect to the timing of the implementation phase. For more detailed informa-tion on a subject, references to the relevant chapter of the report are given in the last column ofthe implementation matrices.
Finally, the text boxes in the margin ofthe report contain the 'thread' of the presented information. They can be read separately and serve as a guide to the reader.
T
ABLE OF CONTENTS
PREFACE ......... i
T ABLE OF CONTENTS ... iii
List of annexes ... . . ... v
List of figures ... vi
List of Tables ... viii
EXECUTIVE SUMMARY ... ES.l I. INTRODUCTION ... 1
II. CRUISE LINE INDUSTRY ... 5
11.1. METHODOLOGY ... .. 11.2. THE WORLD CRUISE INDUSTRY II.2./. Market growlh .. 11.3. 1/.2.2. J12.3. Cruise duration Cruise capacity .. THE CARIBBEAN CRUISE INDUSTRY ... . 11.3/. J13.2. 113.3. /1.3.4. Markei growlh .. ...... .. Caribbean destinations Geographical segmentation .. Cruise capacity .. ... 5 ... 6 . ... 6 ... 7 ... 9 13 . .. /3 ... 15 . ... 22 . ... 25
11.4. IMPACT OF STRUCTURAL CHANGES IN THE CRUISE INDUSTRY ON THE COMPETITIVE POSITION OF CARIBBEAN DESTINATIONS ... 25
11.4.1. J/4.2. Trends and slructural changes in the cruise industry .. Impact on the competitive position ofCaribbean Cruise deslinations 11.4.2.1. Prospeets far the Caribbean regian.. ... . 11.4.2.2. Praspects per geagraphical markct segment .. 11.4.2.3. Jncreased campetition between Caribbean destinations
©
Policy Research Corporation N. V. . ... 25. ... 29
...30
.. .. 33
Cruise and Container Markets
\l.5. DECISIVE FACTORS FOR PORT SELECTION ... 36
.... 37
/1.5./. Port selection criteriafor regular ports-ofcall 11.5.2. Port selection criteria for home ports ... . ... 38
11.6. STRENGTHS AND WEAKNESSES ... 40
\l.7. FUTURE PROSPECTS FOR CURAÇAO AND SINT MAARTEN ... 46
I/. 7./. Curaçao. .. ... 46
I/. 7.2. Sint Maarten ... .. ... 55
11.8. CONCLUSIONS AND RECOMMENDATIONS ... 63
IJ. 8./. Curaçao ... .. 11.8.2. Sint Maarten ..... .. ...63
.. ... 66
111. CONTAINER SHIPPING ... 69
111.1. THE PORT OF WILLEMSTAD ... 69
11/././. Containerisation.' the overall picture ... ... ...69
111.1.1.1. Structural changes in container liner shipping worldwide and in the Caribbean Basin.. .. ... 69
111.1.1.2. Impact of scale increases and concentration in liner shipping on the maritime geography of container lines ... .. 77
111.1.1.3. Present and future container terminal status and role ... .. ... 80
111./.2. Past and present container terminal performance in the Caribbean and adjacent sub-region (Colombia / Venezuela) ... .. ... 87
111.1.2.1. Past container throughput.. ... ...87
111. 1.2.2. Current supply of container handling capacity .. 111.1.2.3. Future supply of container handling capacity 111.1.2.4. Container terminal handling productivity .. 111.1.2.5. Container handling rates 1J/./.3. Investigation into the Container Terminal Operations of Willemstad 111.1.3.1. Institutional arrangements .. .. ... .. 111.1.3.2. Capacity characteristics ofthe Curaçao Container Terminal .. .. ... 91 .. 98 ... 100 .. lOS .... 114 ...114 .. ... 115 111.1.3.3. III.I.3.4. Present and future use of the tenninal . .. ... 121
Required adjustments 10 management, operations and pricing to fultïl a sub-regional hub port role ... .. ... 134
111.1.3.5. Management objectives.. .. ... . 111./.4. Conc/usions and recommendations with regard to the Port of Willemstad 134 ... 145
IIl.2. THE PORT OF PHILIPSBURG (SINT MAARTEN) ... 151
/11.2./. /nvestigation into the Terminal Operations at Sint Maarten . ...... /5/
111.2.2. Competitive position of Sint Maarten and the planned extension ofthe port's cargo hand/ingfaci/ities.... . 156
111.2.3. Strategy for the development of Phi/ipsburg as a regional sub-hub.. .. ... 163
111.2.3.1. Two strategic options... ... .. ... 163
111.2.3.2. Required facilities ... .. ... . 111.2.3.3. The respective roles ofSMPA and the Terminal Operator ... . 111.2.3.4. Revision of port tariffs ... . .164 .. .. 166
.... 167
111.2.3.5. The need t'or a marketing slrategy ... 168
Ill.2.4. Conclusions and recommendations with regard to the Port of Phi/ipsburg (Sint Maarten) .... .. ... ... ... .. ... 170
LIST OF ANNEXES
Annex A: STRENGTHS AND WEAKNESSES OF SELECTED CARIBBEAN
DESTINATIONS AS CRUISE DESTINATIONS ... A.l Annex B: QUESTIONNAIRE SENT TO MAJOR CARRIERS ... A.7 Annex C: REFERENCES ... A.19
Cruise and Container Markets
LIST OF FIGURES
Figurel1.1 : Overall passenger growth in the North American cruise market (in thousands) ... 7 Figure 11.2 : Distribution of cruise lengths 1980 - 1996 ... 8 Figure 11.3 : Past and prospected evolution of North American lower berth capacity
1981-2001 ... 11 Figure 11.4 : Evolution of the cruise capacity in terms of bed-days 1987 - 1997 (in
thousands of bed-days) ... 12 Figure 11.5 : Compound annual growth rate (period 1981-1996) versus market share in
1996 for destinations world-wide with respect to the number of bed-days ... 14 Figure 1I.6 : Sum of cruise passenger arrivals in Caribbean ports (in thousands) ... 15 Figure I1.7 : Compound annual growth rate (period 1986 - 1996) versus market share in
1996 for Caribbean destinations (passenger arrivals) ... 17 Figure II.8 : Compound annual growth rate (period 1991 - 1996) versus market share in
1996 for Caribbean destinations (passenger arrivals) ... 18 Figure 11.9 : Strongly growing Caribbean destinations (passenger arrivals in thousands) ... 20 Figure lI.l 0 : Passenger arrival growth in Curaçao and Sint Maarten compared to growth in
the top four Caribbean destinations ... 21 Figure II.11 : Compound annual growth rate (period 1986 - 1996) versus market share in
1996 for the various geographical segments ... 23 Figure II.l2 : Forecast prospects for the world cruise market (passengers in thousands) ... .32 Figure 11.13: Forecast evolution of the number of bed-days in the Caribbean and passenger
visits to Caribbean destinations (bed-days and passengers in thousands) ... 33 Figure 11.14: Forecast evolution ofthe passenger visits per geographical market segment in
the Caribbean (pass enger visits in thousands) ... 34 Figure 1l.l5 : Intrinsic value versus actual performance in terms of passenger arrivals for a
selection of Caribbean destinations ... .41 Figure 11.16 : Curaçao versus St. Maarten on the basis oftheir intrinsic value ... 42 Figure 11.17 : Ranking of a selection of Caribbean destinations by overall rating on port
related attributes ... "'" ... .43 Figure 1l.l8 : Ranking of a selection of Caribbean destinations by overall rating on island
related attributes ... .44 Figure 11.19 : Ranking of aselection ofCaribbean destinations by overall image ... .45
List of Figures
Figure 11.20: Compound al1llUal growth rate (period 1986-1996) versus market share in 1996 for Deep Caribbean destinations ... .4 7 Figure 11.21: Forecast evolution of value added by cruise tourism in Curaçao (in thousands
ofUS$) ... 52
Figure 11.22: Compound annual growth rate (period 1986-1996) versus market share in 1996 for Eastern Caribbean destinations ... 55
Figure 11.23 : Forecast evolution of passenger visits to Sint Maarten (passenger visits in thousands) ... 58
Figure [1.24: Yalue added contribution of cruise tourism to Sint Maarten's economy 1986-2005 (in thousands of US$) ... 62
Figure 111.1: Trends in liner shipping ... 75
Figure 111.2: Acute problems in liner shipping ... 76
Figure 1lI.3: Maritime geography of container lines in the next decade ... 78
Figure 1II.4: Multi-Iayered port calls ... 80
Figure H1.5: Container Throughput of Caribbean Ports 1985-1995 ... 88
Figure II1.6: Curaçao Container Terminal (Port of Willemstad) - N° of Containers discharged by main users ... 121
Figure 111.7: Curaçao Container Terminal (Port of Willemstad) - N° of Containers by main user 1996 ... 122
Figure 111.8 : Willemstad: distance to and from potential hub and feeder ports ... 133
Figure 111.9 : Schematic representation of the relationship between cost per container handled and throughput volume (in US $) on a typical ISO 000 moves per year container term inal ... 144
Figure 111.10: Actions recommended to establish the port of Willemstad as a sub-regional container hub ... 148
Figure 111.11 : Main principles for the revision of the concession and rental agreements in the port of Willemstad ... 149
Figure 111.12: Throughput shares ofthe main container operators in the Port of Philipsburg ... 152
Figure 111.14: Sint Maarten: distance to and from potential hub and feeder ports ... 161 Figure 111.15: External analysis: recommendations with respect to transhipment on Sint
Maarten ... I 74
Cruise and Container Markets
LIST
OF TABLES
Table 11.1 : Distribution of cruise durations 1980 -1996 (passengers in thousands) ... 8
Table 11.2 : Overview of North American cruise passenger capacity in 1996 ... 10
Table 11.3 : Contracted and planned new buildings 1997-2001 ... 1 1 Table 11.4 : Cruise pass enger arrivals in Caribbean destinations in 1996 (in thousands) ... 16
Table 11.5 : Evolution of market shares for selected Caribbean destinations ... 19
Table 11.6 : Passenger arrival growth in Curaçao and Sint Maarten compared to other Caribbean destinations in the period 1986-1996 ... 21
Table 11.7 : Geographic segmentation ofthe 8ahamas and Caribbean cruise market ... 22
Table 11.8 : Evaluation of the projected number ofNorth American cruise passengers ... 31
Table 11.9 : Forecast evolution of passenger visits per geographical market segment in the Caribbean (passenger visits in thousands) ... 34
Tablell.lO: Port selection criteria ... 37
TabielLIl : Selection criteria for home ports ... 38
Table 11.12: Summary of strengths and weaknesses of Caribbean destinations with respect to selected port related attributes ... .44
Table 11.13 : Summary of strengths and weaknesses of Caribbean destinations with respect to selected island related attributes ... .45
Table 11.14 : Forecast evolution of passenger visits to Deep Caribbean destinations and market share (passenger visits in thousands) ... .49
Table 11.15 : Forecast evolution ofvalue added by cruise tourism in Curaçao ... 51
Table 11.16: Forecast evolution of passenger visits to Eastern Caribbean destinations and market share (passenger visits in thousands) ... 57
TableIl.17: Forecast evolution ofvalue added by cruise tourism in Sint Maarten ... 60
TablelIl.l: Principal dimensions of cellular container ships by various generations ... 72
Table 1II.2 : Physical dimensions of very large container ships ... 72
Table 111.3 : Share of very large container ships in the total TEU-slot capacity (in service and on order on Ol November 1997) ... 73 Table 111.4 : Summary of OSC throughput forecasts for the Caribbean and Central American regions ... 84
Table 111.5 : Container throughput of Caribbean and Venezuelan/Colombian ports 1985-1996 ... 89
Table 111.6 : Container handling facilities in the Caribbean and in Venezuelan/Colombian Atlantic coast ports ... 92 Table HI.7 : Container handling facilities in the Caribbean and in Venezuelan/Colombian
Atlantic coast ports ... 94 Table 111.8 : Planned container handling facilities in the Caribbean and in
Venezuelan/Colombian Atlantic Coast Ports ... 96 Table 111.9 : Review of port productivity measured on NCS vessels (1995) in the
Caribbean region and the ColombianlV enezuelan Atlantic Coast sub-region ... 101 Table III.l 0 : Review of Port productivity at the Port Bustamante Container Terminal
(Jamaica) ... 102 Table 111.11 : Gantry crane productivity at the Container Terminal of Fort-de-France
1991-1~5 ...
Im
Table III.12 : Shift productivity at the container terminal of Jarry, Point-à-Pitre(Guadeloupe) ... I 03 Table III.13 : Selected container tariff rates in Caribbean and Central American ports (in
US$) ... 107 Table m.14 : Indicative tariffs for 20' local containers (imports/exports) ... 108 Table m.15 : Comparison of transhipment tariff rates in Caribbean and Central American
ports ... 109 Table 111.16 : Port of Willemstad: SWOT comparison of potential competitors for
sub-regional hub status ... 111 Table 111.17 : Port of Willemstad: SWOT comparison of potential competitors for
sub-regional hub status ... I 12 Table 111.18 : Port of Willemstad: SWOT comparison of potential competitors for
sub-regional hub status ... I 13 Table 111.19 : Effectivity of gantry cranes deployed on the Curaçao Container Terminal
(Port of Willemstad) ... 117 Table 111.20 : Summary of past ship-to-shore performance on the Curaçao Container
Terminal (Port of Willemstad) ... 118 Tablell1.21: Holding capacity (total of available TEU slots at any one time) of the Curaçao
Container Terminal (Port of Willemstad) ... 118 Table 111.22 : Net holding capacity (net total of available TEU slots) ... 119 Table 111.23 : Annual stacking capacity (in TEU) of the Curaçao Container Terminal (Port
of Willemstad) ... 119 Table III.24 : Curaçao Container Terminal (Port of Willemstad) - Share of transhipment
containers in the total handled (1987-1996) ... 123 Table 111.25 : Curaçao Container Terminal (Port of Willemstad) - Comparison of major
shifts in container throughput per main service (1992-1996) ... 124 Table 111.26 : Evolution of local container throughput in the Port of Willemstad
(1987-1996) -in containers ... 125 Table 111.27 : Total container throughput of the Curaçao Container Terminal (Port of
Willemstad) - Period 1992-1996 - in containers ... 126 Table 11 1.28 : Market share of Willemstad in total Caribbean throllghpllt (incillsive and
excillsive ofSan Jllan throllghpllt) ... 127
Cruise and Container Markets
Table 1I1.29: Summary of responses to questionnaire sent to main shipping lines serving Willemstad ... 129 Table 1Il.30: Comparison of SMPA throughput data (in containers) with similar data from
the Cargo Industry Study (in TEU) ... 151 Table 11 IJ I: SMPA transhipment container throughput and cargo cube (1994-1996) ... 152 Table 1Il.32: SMPA: Average number of container exchanges per call ... 153 Table 1I1.33: SMPA: Throughput evolution of major weight break-bulk cargoes between
1991 and 1996 ... 155 Table 111.34: Port of Philipsburg : SWOT comparison of potential competitors for
sub-regional hub status (part a) ... 157
Table 1I1J5: Port of Philipsburg : SWOT comparison of potential competitors for sub-regional hub status (part b) ... 158 Table 111.36: Port of Philipsburg : SWOT comparison of potential competitors for
sub-regional hub status (part c) ... 159 Table lIl.37: Capital investment estimate for the proposed phase I development of the
Philipsburg multi-purpose terminal ... 165
ES.I.
The Economie Impact Study (EJsC~)) for the Maritime Sector of the Netherlands Antilles (A-EIS project) is commissioned to Policy Research Corporation N. V by the Ministry of TrajJic and Transport of the Nether-lands Antilles.
Volume " 'Cruise and Con-tainer Markets ' presents an analysis of the future potential of two Caribbean Ports: Wil-lemstad on Curaçao and Phil-ipsburg on Sint Maarten. A summary is inc/uded in Chapter I V of Volume I 'Conclusions and Recommendations '.
EXECUTIVE SUMMARY
INTRODUCTION
The Economic Impact Study (EL<{KJ) for the Maritime Sector of the Netherlands Antilles (A-EIS project) was commissioned to Policy Research Corporation N. V by the Ministry of Traffic and Transport of the Netherlands Antilles, The Steering Committee, which was in-stalled to support and monitor the research efforts, also includes rep-resentatives of other federal departments and ofthe lsland Territories of Curaçao, Bonaire, Sint Maarten, Stat ia and Saba, The study is fi-nanced by the Dutch Ministry of Transport, Public Works and Water Management, Directorate General for Freight Transport.
The purpose of Volume JJ 'Cruise and Container Markets ' of this Final Report is to present an analysis of the evolution of the services supplied to the cruise and container liner markets by the ports of Willemstad (Curaçao) and Philipsburg (Sint Maarten. The ultimate goal of this study is to present a set of conclusions and recommenda-tions to underpin the future strategie development of the two ports in both market segments. At the same time, it serves as an external analysis of the maritime situation in the Caribbean. A summary is included in Chapter IV of Volume I 'Conclusions and Recommenda-tions' ofthis Final Report.
-ES.l---~---~~.~--.----.
ES.2. The Ji"l pari deals wilh Ihe cruise indllslry and Ihe possibIe Jiilllre role Ihat Ihe porls of
Willemslad and Philipsburg con play.
'l'he cruise industry is one of the /àstest growing types of leisure
experienee in Ihe world.
The Carihhean is al presenl Ihe
h/l'gesl cruise markei and will remain so for Ihe foreseeable
./iilllre.
In Ihe 1986-1996 period. Ihe KrolVlh rale Jor Willemslad was
helolV average oflhe Caribhean. Ihe grolVlh in Philipsburg was lVell above Ihal average. /3o/h 10SI, however. market share in Ihe "eriod 1991-1996.
-
ES.2-Cruise and Container Markets
CRUISE L1NE INDUSTRY
The part one of the study, deals with the cruise industry. It begins by explaining the structural changes affecting the parties involved, be-fore on to consider the strengths and weaknesses of ports in the Car -ibbean with respect to their capability to cater for cruise ships and their passen gers. Then, it looks into the possible future role that the ports of Willemstad and Philipsburg can play. Finally, it addresses the issues of how these ports can become more attractive to cruise liners and passengers and how they should cater for a potential addi-tional intake of passengers are discussed.
The North American cruise market has in the past ten years regis-tered a compound annual growth rate of 7.6%. With 4.7 million pas-sengers in 1996, the cruise industry is one of the fastest growing types of leisure experiences in the world. The number of passen gers is expected to further increase to 7.0 millioll passen gers by 2000. With respect to cruise duration, the fastest growing segment in the business is that of2-to 5-day cruises, whilst longer cruises of9 to 17 days are losing market share.
The present cruise fleet offers a capacity of some I 10 000 lower berths. An additional capacity of some 46 000 lower berths is on or-der for delivery between 1997 and 2001. About 50% of this new ca-pacity will be on board ships of over 2000 lower berths.
The Caribbean at present has a market share of almost 50% of the world cruise market and there is little doubt that it will remain the major cruise area for the foreseeable future. lts strong points are its capability to offer 'port-a-day' cruises and relatively easy access from most of North America.
In terms of the number of passenger arrivals, the Bahamas, U.S. Vir-gin Islands, Cozumel and Puerto Rico are the main destinations. In the 1986-1996 period, the Netherlands Antilles islands (Sint Maarten, Curaçao and Bonaire) held a 7.9% share of passenger arrivals in the Caribbean. At 3.2% the growth rate for Curaçao, is below the ave rage ofthe region, whereas Sint Maarten's 7.7% is weil above the average
The larges' segment is Ihe Easl Carihhean, while Ihe jaSleSI growinR on!! is !he South Carih -bean.
ï'he Florida ports are ,he ma in home purIs. San .Juan is he-('oming a significant alternalive.
Congeslion in (he 'raditional home porls may resIlIl in Ihe development of {/ nllmber of allernative home por/s.
Important elelllents in the as-sessment ol the Caribbean cruise husiness are {he growing oligopoly ol the operators and (heir need 10 hoost profil
mar-gin.\'.
Same I () mil/ion passengers are expected to cruise the Carih-hean by 2()()4.
(but still much below growth rates 111 Guadeloupe, Barbados, Cozumel or the Cayman Islands). Both Willemstad and Philipsburg lost in the 1991-1996 period market share falling from 2.0% to 1.6% and from 6.5% to 6.2%. Compared with 1986, Willemstad and Phil-ipsburg received in the same period re 47 200 and 343 500 additional passengers respectively.
With respect to the geographical segment of the Caribbean cruise market, the largest one is the East Caribbean (including Sint Maarten) but the fastest one growing is the South Caribbean. The Deep Caribbean, which includes Curaçao, is the smallest segment and also records the lowest growth(rate).
The home ports for the Bahamas are the Florida ports (Miami, Port Everglades, etc.). Sall Juan also plays a growing role as a home port in particular for the Eastern and Southern Caribbean and to a lesser extent for the Deep Caribbean.
The expected growth ofthe cruise passenger market in the Caribbean may result in port congestion, especially in the home ports, which may rise to the development of new home ports and the polarisation of the cruise market into a mass market and a niche (or boutique lines) market.
Important elements in the assessment of the Caribbean cruise liner business are the growing oligopoly of the main operators and their imperative need to boost profit margins. The latter push es them to economies of scale, better cost control (e.g. lower port tariffs) and maximisation ofshore revenues (e.g. through 'private islands' calls).
The future growth pattern is expected to continue along the same line as the 1980-1996 pattern. Thus some 10 million passengers are ex -pected to cruise the Caribbean by 2004. This increase will actually correspond to a drop in market share for the Caribbean. The Bahamas are expected to decline further, in favour of the Western and South-ern Caribbean. The Eastern and Deep Caribbean are also poised to lose market share.
ES.3-Increased campelifian be/ween Caribbean deslinalions is more Ihanlike/v.
The /ikelihoad of increased competition makes it imperative jor ports 10 meel Ihe porl selec-!ion criteria of the cruise /ines as much as possib/e.
The overallfulure prospecls for Curaçao and Sint Maarten are very different. The deep
Carib-bean in genera! and Curaçao in
particu/ar may benejit fram the congeslion of Ihe traditional home ports.
-
ES.4-Cruise and Container Markets
Given the general background described above and fut ure traffic ex-pectations, increased competition between Caribbean destinations is more than likely. This is the combined result of greater port aware-ness of the value-added generated by the cruise busiaware-ness, the intro-duction of mega ships, the concentration of the supply side, the growing popularity of shorter cruises (meaning fewer port calls) and attempts by cruise lines to control costs and increase revenue.
Hence, the relative competitive position of Caribbean destinations becomes a key element. Such a position is determined in particular by the port selection criteria used by the cruise lines. These will vary depending on the size of the line, the vessels and the customer base, . and will also vary for ports-of-call and home pOrts. Applying these criteria to regular ports-of-call shows that both Curaçao and Sint Maarten receive a favourable response except for passenger reception facilities. On the other hand, duty-free shopping stands out as the main strong point with respect to the selected 'island-related attrib-utes'. The result for both ports is very different when considering their possible home port role, with Curaçao a possibility for boutique lines and Sint Maarten showing little potential.
The overall future prospects for Curaçao and Sint Maarten are very different as weIl. Curaçao is in the smallest market segment, which is moreover losing market share. lts main disadvantage is therefore its geographical position (too far from Florida to allow its inclusion in one-week cruises). However, the Deep Caribbean destinations may in the future benefit from congestion problems in the Florida ports and the development of St. Croix and Barbados as home ports. The fore-cast evolution of passenger visits is for growth in numbers (from 173 000 in 1996 to 290 000 in 2005) and a drop in market share (from 17.9% to 14.4%). New opportunities could be created by a joint ef-fort of several Deep Caribbean destinations to improve their cruise facilities and service levels (possibly through a joint port undertak-ing).
The potential vah~e added gen-erated hy 50 000 additional passengers in Curaçao is far greater than the investment necessary for a new mega
ter-minal.
Sint Maarten is a 'ml/st call'
desfinatfon with an attractive geographical loca/ion and an interesting cul/ura! mix.
Sint ,Haar/en can improve its competitive posifian by
deve/-oping berthing space Jor mega
cruise ships.
The potential value added, that could be generated by cruise tourism in the Curaçao economy, is far greater than the investment necessary for the development of a new mega terminal West of St. Anna Bay, But although most of the additional value added could be generated using the existing facilities, if from 2001 some 55 000 extra passen-gers per year could be attracted by the new cruise terminal, this would increase the value added by US$ 5.0 million annually. The backflow to the public sector would be US$ 1.44 million per year, providing a net present value of US$ 7,9 million over 25 years. The new terminal would also significantly increase the port's potential for home porting for boutique lines. The promotion of the home porting concept should, however, be linked in combination with a powerful long-term marketing and sales effort to convince cruise passengers to spend a few days in Curaçao.
Sint Maarten is increasingly becoming a 'must call' destination. lts strong points are, apart from duty-free shopping, its attractive geo-graphical location and an interesting mix of cultures. On the basis of the expected overall growth of the cruise market and Sint Maarten's past performance, the port of Philipsburg may be expected to keep its present market share (18% in the Eastern Caribbean) and signifi-cantly increase the number of passenger arrivals by 2005 (from 657 000 to I 396 000). However, in order for the growth of cruise tourism on Sint Maarten to he sustainable, the 'island product' has to be upgraded and the congestion problems have to be solved.
Sint Maarten could improve its competitive position by developing berthing space and passenger reception facilities for cruise ships. The value added of cruise tourism on the is land is high (some US$ 91 million in 1996) and is expected to double by 2005. From a macro-economie point of view, it is obvious that the US$ 43.0 million in -vestment, necessary for the development of a new mega terminal (and multi-purpose terminal), will be largely offset by the generated economic benefits if these new facilities allow the port to attract 100 000 additional passen gers annually. From 200 I onwards this would result in US$ 11.9 million value added annually and a hacktlow to the public sector of US$ 3.4 million annually). However,
ES.5-More priorily should be given 10 Ihe inlroduelion of a number of jlanking measure. in order to maintain the exisling basis lor cruise tourism.
SolvinR the land-side problems is considered the highest prior-ity i/cruise lourism is 10 develop in a sustainable way. New cruise wssel and passenger reeep/ion jàcilities would fitrther add to the attractiveness of Sint Maarten as a cruise destination.
For Curaçao Ihe study eo n-cludes thai its mega cruise ter-minal should be built and an inteKrated promotion plan im-plemented.
Sint Maarten should eonsider alternatives lor its mega cruise pier and in partieu/ar devote considerable efforts to promot -ing louristic ac/ivi/jes.
- ES. 6
-Cruise and Container Markets
standing its expected positive effects, the construction of the new cruise pier is not considered a top priority by the cruise lines for the further development of cruise tourism on Sint Maarten. An alterna-tive could be to restore the old pier, while alternative plans for the development ofthe port should be considered.
However, top priority should be given to the introduction of a num-ber of flanking measures in order to maintain the existing basis for cruise tourism. In addition, passen gers should be encouraged to fan out across the island or visit neighbouring islands by boat. Also, more tourist attractions should be opened. The training of personnel is an important factor as weil.
It should be emphasised th at the construction ofthe new cruise pier is not rejected, provided that funds are also made available to solve the land-side problems with re gard to the development of cruise tourism on Sint Maarten. If the congestion problems are not solved and the 'product Sint Maarten' is not upgraded, this development is not ex-pected to be sustainable in the long run. As aresuit, solving the land -side problems is considered the highest priority. New cruise vessel and passenger reception facilities would further add to the attractive-ness of Sint Maarten as a cruise destination.
For Curaçao the study concludes with the following recommenda-tions: the port should build its mega cruise ship terminal, increase its co-operation with other Deep Caribbean ports and interested cruise lines, launch a 'Deep Caribbean Cruise Experience' programme and develop an integrated cruise and tourism promotion plan.
For Sint Maarten the study states that, notwithstanding its expected positive effects, the construction of the new cruise pier is not a prior-ity. Furthermore, passen gers should be encouraged to fan out across the island or to neighbouring islands. A suitable 'theme park' should be opened, airlines and cruise lines should work together and, in gen-eral, considerable attention and efforts should be devoted to promot-ing tourism and tourist activities on the island.
ES.3. The second Part of Volume II considers container trade. In the years ahead shlpping and port developments in Ihe Caribbean, as weil as in Central America
and on the
C%m-bian/Vene=uelan seaboard, will, much more than ever befare, be delermined by the dramalic changes currently afJecling Ihe /iner in dus try.
The ju/ure maritime transport model for the container trades consists of a backbone service formed by the main East-West and West-East loops on which multiple North-Solllh /inks are grafied.
/n the Caribbean and Central ;/merican regions the hub trades can also be expected to grow rapidly, as the potent ia I impact of multi-Iayered transhipment and feedering is rea/ised in the nexl decade.
CONTAINER SHIPPING
The second Part of Volume 11 considers container trade. In the years ahead shipping and port developments in the Caribbean, in Centra I America and the Colombian/Venezuelan seaboard will, much more than ever before, be determined by the dramatic changes currently affecting the liner industry. These changes are driven by the need to adapt to new logistics concepts, accommodate scale increases and face up to strong concentration in the liner business.
The future maritime transport model for the container trades will possibly be one dominated by large container ships (10000 TEU or more), relayed by an extensive fleet of feeder vessels. The con se-quences of this on the maritime geography of container lines will be dramatic. The overall picture, al ready emerging today, is one based on a backbone service formed by the main East- West and West-East loops on which multiple North-South links are grafted. These critical link-ups will take place in global or main hub ports. The network of services will be completed by different layers of feedering which will connect the global or main hubs with regional or sub-regional hubs and the latter with a multitude of feeder ports. Such multi-layered networks will give each port a distinct status within a global service pattern and inevitably alter the competitive position of ports.
In the Caribbean and Central American regions the hub trades, un-derdeveloped as they we re for the past thirty years, can also be ex-pected to grow rapidly as the potential impact of multi-Iayered feedering is realised in the next decade. How quickly and how weil these transhipment and feeder flows develop in the regions under consideration, will to a large extent depend on service quality, the price of the terminal handling and the availability of appropriate container berths in sufficient numbers.
7-The choice of main hub ports for the Caribbean and Central American regions has a/ready been made although there is liltle doubt that over time same carrier-hub port partnerships
wil! change. The choice of sub-reg/onal hubs. on the contrary, is slil! wide open.
The region cons/ilutes on emerging container transport markei with sufjicient poten/ial.
Major development schemes have heen announced and are heing implemenled.
Port compelition in the
con-tainer handling market is likely (0 increase.
ES, 8
-Cruise and Container Markets
The choice of main hub ports for the Caribbean and Central Ameri-can regions has already been made although there is little doubt th at over time some carrier-hub port partnerships will change. The choice with regard to subregional hubs, on the contrary, remains open. Both the ports of Willemstad and Philipsburg intend to play a role in the sub-regional transhipment business. If the Port Allthorities and ter-minal operators want to capitalise on the opportunities offered by multi-Iayered transhipment and feedering, they will have to act quickly and appropriately.
To better appraise their chances of gaining sub-regional hub status, a Caribbean ports scan was carried out. This revealed that although the region's container ports have al most doubled their throughput in the 1985-1995 period, it remains modest on a world scale. The region does however constitute an emerging container transport market with sllfficient potential.
Handling of containers has taken place both at dedicated container terminals and conventional facilities. In most ports, berth capacities and the quality and quantity of the ship-to-shore handling equipment is inadequate for serving larger container vessels carrying a substan-tialnumber oftranshipment containers.
Major development schemes have been announced and are being im-plemented. This is bound to lead to a concentration of the top layer of transhipment cargoes on the main hub ports of Freeport, Kingston and Panama. At the same time the new development schemes of larger and smaller ports create a considerable risk of overcapacity. Port competition in the container handling market is therefore likely to increase as supply can be expected to increase much faster than demand, notwithstanding the anticipated growth in sllb-regional tran-shipment.
The overall productivity levels of the container ports in the Carib-bean and the Atlantic seaboard have been mediocre (with a few ex-ceptions). But the recent arrival of reputable container terminal op-erators in the Caribbean and Central American region should greatly
The ra/her paar ou/put per-formance of the container ter-minals also explains the high hanJling charges.
711e port of Willemstad is a taal parI. 71le Port Authority has awarded an exc/usive conces
-sion jór stevedoring and han-dling to Curaçao Port Services.
The CPS management runs a "alanced terminal operation, albeit at a moderate level of
llIilisation.
contribute to the overall improvement of performance. This will be essential ifthe concept ofmulti-Iayered transhipment is to succeed.
Given the rather poor output performances ofthe container terminals, it is not surprising that handling charges are two or three times as high as in other container ports and that the overall cost of transport and insurance in the Caribbean basin is some 40% higher than the average for the wor/d. In fact, container handling tariffs in the Carib-bean are either opaque or hidden and inevitably trigger heavy cross-subsidisation. The latter not only leads to a disconnection between the actual costs incurred in handling the containers and the tariff lev-els charged, but more significantly promotes inefficiency and exces-sive costs for the users. Manifestly major improvements in port pricing concepts as weil as tariff structures and levels will be inevita-bIe in the short to medium term.
In the port of Willemstad, the Curaçao Ports Authority (CPA), acting as a tooI port, has awarded a concession to Curaçao Port Services (CPS) for the stevedoring and handling of containers and cargoes in all present and future ports of Curaçao, including the container ter-minal. The latter facility has an intrinsic handling capacity of at least twice and possibly th ree times the present throughput activity. Tran-shipment levels are low and have been declining. Also the market share of the terminal in the Caribbean region's tata 1 has dropped since 1992 notwithstanding the fact that both the port and the con-tainer terminal have a favourable reputation with users and the port was nominated as 'most dependable port' of the Caribbean region in 1997.
The CPS management runs a balanced terminal operation, albeit at a moderate level of utilisation. The concession agreement does in fact not provide any strong incentive for CPS to improve 011 these levels, because a substantial part of the rental charges are directly linked to achieved throughput (and thus represent variabIe costs for CPS). The result is handling tariff rates for captive traffic that shippers/receivers find excessive. These are, however, not higher than in neighbouring and competing ports, on the contrary. Ta reduce average handling
9-The plan of action for develop-ing the port of Willemstad into a successful sub-regional hub could inc/ude:
the development of a gen-eral port policy for Ihe Netherlands Antilles; - preparation of a strategie
markeling plan:
- revision of the concession and ren/al agreements be-Iween CPA and CPSc - restructuring of the
con-tainer handling tariff; - eontinued provision of
dif-ferent berth al/oealion and berthing policies;
- revisian of labour laws and re-negotiation of the eollee-live labour agreements: - gradual increase in the
number of ship-to-shore ganlries and Ihe gradual re-placement of the present slacking system.
-
ES.IO-Cruise and Container Markets
co st per unit in order to allow a reduction of the handling tariffs, the terminal must maximise its throughput. Indeed, it is not the exclusive right of CPS to operate the terminal which inflates container handling charges, but an insufficient activity level. To increase throughput few options are open. Local traffic is not expected to grow at more than 4% per annum and population and export manufacturing are smal\. Hence the port of Willemstad will have to aim for sub-regional port status if container volumes are to be boosted significantly. To suc-ceed, both CPA and CPS will have to implement a deliberate sub-hub strategy covering the further improvement of facilities and perform-ance, a change in operational arrangements and a remodelling of tariffs.
The plan of action for the development of the port of Willemstad into a successful subregional hub could include:
the development of a general port policy for the Netherlands An-ti lies;
preparation of aspecific strategic marketing plan to promote sub-regional hub status;
revision of the concession and rental agreements between CPA and CPS;
restructuring ofthe container handling tariff;
continuation of the practice providing different berth allocation and berthing policies;
revision of the labour law and re-negotiation of the collective la-bour agreements;
gradual increase in the number of ship-to-shore gantries and the gradual replacement ofthe present stacking system.
Philipsburg is a typical small Caribbean island port. The container volumes, which are handled over facilities badly damaged by hurri-cane Luis, are somewhat more significant than in most of the sur-rounding smaller islands' ports. On present throughput performance the port can scarcely pretend to play a major role as container hub. But the restructuring of the maritime geography of liner shipping could also offer new opportunities for transhipment in the East Car-ibbean. Once more, however, there are many contenders. From the SWOT analysis carried out for Philipsburg and its major competitors,
The main recommendations for Ihe slralegie developmenl of Ihe parI of Philipshllrg inlO a sub-regionol huh inclz,de:
conslruelion of Ihe jirsl 225
metre.\' of a new
mu/ti-purpose lerminal: procurement (~l an adJi-lional HD-mobile harbollr
crane and more reach staek-ers orjront-end laaders:
- opera/ion 0/ ,he mu/ti -purpose terminal as a
COnt-mon lIser ./acility on a
reve-nue-sharing lease basis;
it becomes apparent that th ere are at least ten ports that have designs on handling a more significant volume of transhipment. Clearly, whichever port and terminal operator is the most aggressive in the next th ree or five years and develops facilities in line with its ambi-tions and user demands, stands a better chance to slIceeed as sub-regional hub.
A closer look at the port of Philipsburg's strengths and weaknesses
reveals that it is weil located within the Eastern Caribbean, has a
limited potential to handle transhipment to or from Latin America
and scores weil in terms of labour efficiency and cost. To fully
ex-ploit the potential generated by new transhipment flows, the SMPA must implement a well-defined, rational and tailor-made sub-regional hub port strategy.
The main components of such strategy should be:
realisation of a resolute and aggressive marketing policy and
strategy;
development in several phases of a multi-purpose terminal,
offer-ing scope for expansion and the possibility of convers ion to a full
container terminal whenever necessary;
signing of a 10 to 15 year lease agreement between SMPA and a
Terminal Operating Company (either af ter restricted local or
competitive international bidding);
revision of the existing tariffs for port charges and container han-dling.
The mam recommendations for the strategie development port of
Philipsburg incillde:
construction of the first 225 metres of a new multi-purpose termi-nal;
procurement of an additional HO-mobile harbour crane and more reach staekers or front-end loaders;
operation of the multi-pllrpose terminal as a common lIser facility
on a revenue-sharing lease basis;
ES.l1-AI/owing /he /erminal oper-ating company fo set its own /ariffs (only SMPA approval
neededfor local cargoes): - o/her SMPA /arif! schedules
/0 be revised, restructured
and simplified:
- joint deve/opment of a
real-is/ic marketing s/ra/egy by
SMPA//erminal operating
company.
Tlte flllure prosperity of bo/h
por/ ('ommuni/ies wil/ largely depend on /he in/roduction of the prol'osed recommendations.
-
ES.J2-Cruise and Container Markets
allowing the terminal operating eompany to set its own tariffs (only SMPA approval needed for loeal cargoes);
- revision, restructuring and simplification of other SMPA tariff schedules;
joint development of a realistic marketing strategy by SMPA/terminal operating company.
Ifthe recommendations for Willemstad and Philipsburg are fully im-plemented both ports will be in a position successfully to hold their ground in an increasingly competitive environment. The strategies above outlined fit the development of the two ports as subregional hubs. They have the added advantage of allowing handling tariffs for local cargoes to be reduced (if total throughput volumes grow sig-nificantly) and creating more employment. Failure to implement the proposed strategies or the choosing not to pursue subregional hub status would be tantamount to accepting shrinking market share, re-duced employment and increased port and handling tariffs.
The future prosperity of both port communities will largely depend on the introduction of the proposed recommendations. However fun-damental and radical they may be, they are balanced and in line with expected mutations in maritime transport.
I.
The Economie Impact Study (EISfY) for the Maritime Sector of the Netherlands Antilles (A-EIS project) was commissioned to Policy Research Corporation N V by the Ministry of Traffic and Transport of the Nether-lands Antilles.
Volume II 'Cruise and Con-tainer Markets ' presents an analysis of the future potential of two Caribbean Ports: Wil-lemstad on Curaçao and Phil-ipsburg on Sint Maarten. A summary is inc/uded in Chapter IV of Volume I 'Conc/usions and Recommendations '.
INTRODUCTION
The Economic Impact Study (EIssY) for the Maritime Sector of the Netherlands Antilles (A-EIS project) was commissioned to Policy Research Corporation NV by the Ministry of Traffïc and Transport of the Netherlands Antilles. The Steering Committee, which was in-stalled to support and monitor research efforts, also includes repre-sentatives of other federal departments and of the Island Territories of Curaçao, Bonaire, Sint Maarten, Statia and Saba. The study
fi-nanced by the Dutch Ministry of Transport, Public Works and Water Management, Directorate General for Freight Transport.
Volume II 'Cruise and Container Markets ' ofthe A-EIS project pres-ents an analysis of the future potentialof two Caribbean Ports: Wil-lemstad on Curaçao and Philipsburg on Sint Maarten. The analysis focuses on the evolution of the market's demand for services, sup-plied or to be supsup-plied by the aforementioned ports. The demand-side segments which are the subject of this study are cruise lines and container shipping. The goal ofthis volume is to map the attitude and perception of cruise and container lines with re gard to the two Neth-erlands Antilles ports in question. At the same time, it serves as an external analysis of the maritime situation in the Caribbean. A sum-mary is as such included in Chap/er IVof Volume I 'Conclusions and Recommendations' ofthis Final Repor/.
To gather the necessary information, questionnaires (see Annex B) were sent to numerous organisations and companies directly involved in the Caribbean shipping and ports industries: ports authorities, container terminal operators, shipping registers, Chambers of Com-merce, tourism and cruise organisations, public maritime and port
-'"' _ _ ' ... i'-'-'_w __ .. H ... . . - . ... ~ .... _ _ _ _ _ ... '._.."1-..-._,.-_______ L.L..' r"-"'!1:..W . . ·U.I.J.!-=! _ _ _ _ . . ,,-'I_~' •• LlIt! ... -. . . . -Ll.I=t...:::"''''.L1 ... -. . ' ...
-'''''''.jI .. __
W:n3&l~1 __ ... L _The jirst part of this Volume deals with the cruise fine
indus-try.
The second part of this Volume deals with container shipping, specifical/y recent developments concerning the Caribbean basin and their impact on the ports of Wil/emstad and Philipsburg. The two ports are discussed in
turn.
-2-Cruise and Container Markets
authorities, container lines, cruise lines and so on An important part
ofthe data was collected during an intensive sixteen-day fact finding
mission in the Caribbean and Central American regions, which also
provided the project team with the opportunity to discuss strategic
issues in the researched fields with various key players. Finally some
strategic interviews were held in Europe on the tearn's return from the Caribbean.
The first part of this Volume deals with the cruise line industry. It
covers five major Chapters. The first Chapter provides an overview ofthe world cruise industry. Then, in the second Chapter, the salient features of the Caribbean cruise business are examined. This is
fol-lowed in the third Chapter by a survey of the impact of structural
changes in the cruise industry on the competitive position ofthe
vari-ous Caribbean destinations. After an analysis of the decisive factors
in the selection of ports-of-call and home ports in the fourth Chapter,
the future prospects in Curaçao and Sint Maarten are explored in the
final Chapter.
The second part of this Volume deals with container shipping,
spe-cifically recent developments concerning the Caribbean basin and
their impact on the ports of Willemstad and Philipsburg. Then the
two ports are discussed in turn. The first Chapter on Willemstad
pre-sents the general background to container shipping. It considers the
structural changes in container liner shipping world wide and in the
Caribbean basin. Then it assesses the impact of scale increases and of concentration in liner shipping on the maritime geography of
con-tainer lines. Finally, it discusses the present and future status and role
of container terminal. The second Chapter on Willemstad details past
and present container terminal performance in the Caribbean, with
re gard to throughput, the current and future supply of container
han-dling capacity, handling productivity and container handling tariff
rates. These first two Chapters are also of relevance when
consider-ing the future development of the port of Philipsburg. In the third
Chapter on Willemstad container terminal operations in the port are
investigated in more detail. Subsequently this Chapter looks into
ex-isting institutional arrangements and the capacity characteristics of
the Curaçao Container Terminal as weil as its present and future use.
I
I
i
!The lexl boxes serve as a guide 10 Ihe reader.
The final Chapter on Willemstad presents conclusions and a set of recommendations that would help enable the port and container ter-minal to meet future medium and longer-term challenges.
The first Chapter on Philipsburg investigates in more detail the cur-rent terminal operations including the available infrastructure, insti-tutional arrangements and throughput. The competitive position of Philipsburg with respect to its main contenders in the Eastern Carib-bean is analysed in the secOild Chapter. The third Chapter presents the framework for a strategy aimed at developing Philipsburg as a sub-regional hub. The fourth and final Chapter formulates conclu-sions and recommendations. The latter specifically focus on actions that would contribute to making Philipsburg alocal transhipment point for the Leeward and possibly some ofthe Windward islands.
The main body ofthe report is preceded by an Executive Summary. In addition to the main body of the Final Report a number of Annexes are included:
- Annex A contains Figures on the strengths and weaknesses of se-lected Caribbean destinations as cruise destinations, dealt with in Chapter 11.5;
Annex B provides a copy of the questionnaire sent to major carri-ers;
- Annex C, finally, gives the references of the literature and statisti-cal sources used.
The text boxes in the margin of the report contain the thread of the presented information, and serve as a guide to the reader.
-3-11.
11.1.
The cruise industry is expanding in an a/most exponential way. At Ihe same time i" configuration is heing reshaped by a number oltrends.
This study analyses the strengths and weaknesses ol Caribbean
cruise ports.
In addition. opportunities jór and threats to these ports are researched
Cruise Line lndustry
CRUISE LINE INDUSTRY
METHODOLOGY
The cruise industry is changing more rapidly than ever before. The demand for cruise holidays is expanding almost exponentially in sev-eral areas around the world, and new cruise facilities are being built at an accelerated rate. At the same time cruise ships tend to become bigger and carry a greater diversity of passengers. These and other trends currently have a major impact on the cruise industry and are shaping its configuration.
The purpose of the study is therefore to pinpoint the most prevailing trends and assess their impact on the cruising geography in the Car-ibbean region. For this reason, an analysis is made of the strengths and weaknesses of ports in the Caribbean with respect to their ability
to cater for cruise ships and their passengers under a changing cruise market and industry structure.
Another research task is to assess the ports' potential to remain or become home ports for cruise ships. A home port is a port where pas-sengers embark and disembark when going on a cruise; the other ports in the cruise ships' itinerary are called ports-of-call or destina-tion ports. Then, there is scenic cruising, which does not refer to a port in the strict sen se, but primarily to aspecific region of interest where the ship cruises for several hours, such as the Glacier Bay re-gion in Alaska.
-5-nl(' porlS ol Wil/emstad (Curaçao) anJ Philipsburg (Sint
Maarten) receive delai/ed
con-sideration \VÎth regard 10 issues.
The o"tcame oj Ihis stl/dy is largely based on field inv esliga-(ions.
II.2.
Il.2.1.
The (IS anJ Canada farm thelargest cruise markets. Cruise
gruw/h amOl/n/s 10 7.6% per
annum compounded.
-
6-Finally, a more in-depth study of the possible future roles of the Ports of Willemstad (Curaçao) and Philipsburg (Sint Maarten) is carried out. Questions that need to be answered include : wh at are the op-portunities for Curaçao or Sint Maarten to establish themselves as home ports for cruise ships and wh at threats militate against such development? How can these islands become more attractive to cruise passengers and how should they cater for the resulting addi-tional intake of passengers?
The outcome of the study is largely based on information gathered during a fact-finding mission in the wider Caribbean region. During that mission several interviews with key players in the region were held. Replies to questionnaires received from the aforementioned key players were also a great help. Finally experience gained by the proj-ect team and other Policy Research staff members as a result of prior studies yielded useful material.
The present structure of the world cruise industry and the Caribbean market is outlined, af ter which the structural changes affecting the cruise industry are explained and summarised.
THE WORLD CRUISE INDUSTRY
MARKET GROWTH
Since 1980, the North American cruise market has had a compound al1llUal growth rate of 7.6% per annum. The United States and Can-ada are by far the largest market sources for cruises. As aresuit this growth rate is very much representative for the world cruise growth. It makes the cruise industry one of the fastest growing types of holi-day experience in the world.
