Ferry plan must prioritise cargo to be viable, economist says

A proposed CARICOM ferry service should be designed first and foremost around the commercial movement of goods, with passenger transport treated as secondary, economist Jeremy Stephen has suggested, if the initiative is to achieve financial sustainability and avoid the pitfalls that plagued past regional transport ventures.

Stephen, who is also a pilot and aviation consultant, has thrown his support behind the latest intra-regional project — provided leaders firmly focus on the commercial movement of goods as the primary driver.

A day after CARICOM leaders agreed to launch an interim “proof of concept” trial within months, Stephen argued that a dedicated cargo-centric model is the only financially viable path forward for the region.

“It was very clear that there’s a momentum towards cargo, and from the time that happens, I support it,” he told Barbados TODAY. “If it’s just driven on cargo, I think it’s way more manageable.”

The regional initiative aims to lower soaring intra-regional trade costs, combat inflationary pressures exacerbated by global fuel spikes, and bolster regional food security. To get the project moving while private partners seek longer-term vessel acquisitions, CARICOM plans to deploy the Galleons Passage — a 74-metre, Trinidad and Tobago-owned, catamaran-style, roll-on/roll-off passenger ferry capable of carrying 60 vehicles alongside substantial freight. It also has capacity for 400 passengers. 

The initial route is slated to connect the southern and eastern Caribbean, including Trinidad and Tobago, Guyana, Suriname, St Vincent, and Barbados. Stephen noted that the fundamental proof of concept for maritime cargo transport across these exact corridors already exists, quietly operating under the radar of the average citizen via existing merchant networks.

“If you download the marine traffic app, you can see there’s traffic moving between Barbados and Saint Vincent every Wednesday for sure — massive shipments of stuff, including coconuts. A lot of people just don’t know this,” he said. “The issue has always been that nobody has invested in something as large as what’s moving between Trinidad and Tobago to move traffic between the OECS [Organisation of Eastern Caribbean States] and Barbados.”

For the ferry service to remain affordable for small traders and vulnerable groups without becoming a permanent drain on state coffers, regional leaders have tasked the CARICOM Private Sector Organisation (CPSO) and the CARICOM Secretariat with finalising a financial dossier.

According to Stephen, the m arithmetic will only work if planners adopt a “ring topology” or chain-link trans-shipment model, rather than relying on simple point-to-point drop-offs:

“In other words, start in Grenada, pick up some spices, go to Saint Vincent, pick up some stuff, drop off a little bit of stuff, and then transship all the way through to say, Barbados. Only if there’s a transshipment model attached can it make money, especially if the vessels are young enough.”

But he raised a critical red flag regarding the age and reliability of the region’s available fleet, drawing a parallel to the structural and financial collapse of regional airline LIAT.

“The issue really comes down to age,” Stephen warned. “Outside of productivity, the issue with LIAT was the average age of the ATR aircraft they had at the time, the carrying costs, and the routes that were unprofitable. Those three components pretty much led to a situation where regional governments had to end up pulling from their pockets.”

Stephen emphasised that the Galleons Passage and similar vessels in the Trinidad fleet are notorious for requiring significant downtime for maintenance. “If the vessels are not young enough, it doesn’t matter, because it might spend more time down… and that might not necessarily assist the exercise in a meaningful manner. You also have to ensure the right health and regulatory concerns are baked into the model—you don’t want to be mixing certain spoilages with live chickens, for example.”

The Galleons Passage was commissioned in 2018. 

Even if the optimal maritime route is engineered, Stephen cautioned that outdated, rigid port and customs bureaucracies could easily kill the ferry’s economic potential. While Prime Minister Mia Mottley has stressed the urgent need to harmonise customs, licensing, and insurance frameworks across the region within the next three months, Stephen insisted this must trigger deep structural reform within domestic agencies, particularly in Barbados.

“It makes no sense providing cheaper shipments if the ability to clear them still remains the same,” Stephen said. “The culture of customs, at least in Barbados, is one that fights certain reforms. The longer a ship waits just to offload due to issues pertaining to customs, it adds expenses you don’t want—port fees, docking fees, and all that nonsense. Those are the costs that end up eating into any headway or profit.”

He pointed out that a lack of rolling schedules at ports currently prioritises rigid hours over seamless trade, a structural flaw that already deters major international airlines from flying heavy freight into Barbados.

“You can’t clear anything at the airport past four o’clock. Nobody likes to bring any cargo late. If you have rolling schedules both at the seaport and the airport, then this thing becomes a cheaper exercise. Customs reforms must help this to work.”

With Trinidad and Tobago lending its state-owned vessel for the trial run, the economist questioned whether the pilot project will mask the true commercial risks of the venture, noting that historically, Port of Spain has heavily subsidised its domestic sea bridge and regional air links via Caribbean Airlines (CAL).

Stephen suggested that regional partners must pull their own weight to prevent old political resentments from resurfacing.

Rather than subsidising daily operating costs, Stephen urged CARICOM governments to pivot their financial interventions towards structural support, such as purchasing and warehousing mechanical parts in bulk to shield the project from sudden inflationary spikes.

“I think they should subsidise, to be honest, not operating costs, but a parts store,” Stephen said.

“Sourcing parts in the Caribbean is incredibly expensive. If you wait until the last minute, you pay an inflationary premium. If governments spend their subsidies on upfront parts acquisition and storage, and if they focus on subsidising the actual exports to incentivise traders, the region will see a far more meaningful return as economies pick up and trade revenues rise.”

(RR)