Trinidad and Tobago Business Overview
Transport Snapshot: Trinidad and Tobago

As an export oriented economy and the largest exporter in the Caribbean, transport is essential to Trinidad and Tobago’s economy. The sector initially evolved to meet the growing demands of the burgeoning energy sector, but has since become one the fastest growing industries and is consistently singled as a strategic investment area by most of the nation’s promotion agencies.

 

DATE: 3/7/2017

 

Trinidad has long operated as an air passenger and cargo hub, but new public and private sector initiatives aim to increase the country’s logistics capacity. As of 2016, the transport industry employs over 40,000 people and contributes 6 percent of the national GDP. 

 

The commercial and civil aviation sectors have shown some strong activity over the past decade. The country’s two main airports, Piarco International in Trinidad and ANR Robinson International in Tobago, have both been subject to expansions and reforms. Established in 2006, the national carrier Caribbean Airlines, merged with rival Air Jamaica to become the leading regional airline. However, increased competition has led to a negative performance and a reduced fleet as of 2015.  

 

Most interest in the transport sector has gone towards the maritime industry, which has been selected as one of two strategic investment sectors by InvesTT, with focus on the commercial maritime and leisure marine areas. Interest in the sector is not new. In 2005, the Maritime Industry Development Committee was formed to implement plans to propel the industry further, but private and public initiatives are picking up pace. This is doubly important after the successful expansion of the Panama Canal in June 2016, as the twin-island republic is 2,200 kilometres east and in a prime transhipment zone between continents making it an ideal location to absorb part of the increased activity. And while the expansion will significantly increase maritime traffic in the region, current transhipment already makes up 40 percent of all commercial maritime business in Trinidad and Tobago, according to the Ministry of Trade and Industry.

 

Ranked third for port capacity in the English-speaking Caribbean, Trinidad and Tobago has nine total ports and five harbours. Two commercial ports for dry and general cargo are in Trinidad at Point Lisas and Port of Spain, while Tobago is connected through the harbour port of Scarborough. Established in 2006, the Port of Port of Spain (PPOS) is the largest in the country and belongs to the Port Authority of Trinidad and Tobago. As of 2016, PPOS has had a negative financial performance as a result of a lack of capital investment. There have also been talks about relocating the port in order to open up the current facilities for real estate development.  The Port of Point Lisas (PPL) on the other hand, has seen a consistently improved performance and a strong growth in traffic. However, it is currently operating at full capacity and reforms may be needed if profits are to increase. As it stands, both PPOS and PPL have a combined annual output of just under 600,000 twenty-foot equivalent units or TEUs of cargo capacity.

 

Trinidad and Tobago offers a number of advantages and opportunities that make it an ideal maritime transport hub. First of all, the country boasts low operational costs. Trinidad and Tobago offers some of the lowest cost locations for utilities within the Caribbean and Latin American region.  It also has an advantage in terms of existing infrastructure and maritime clusters. The country has well developed maritime clusters, with over 13 marinas and a wide range of essential goods and services that are readily available and accessible. Finally, Trinidad’s fortuitous geographic location below the Caribbean’s hurricane belt, makes it an ideal location for safe transhipment and docking of international cargo ships.

 

Three subsectors in the industry have been selected for their potential: port operations, ship repair and dry docking, and marine services. The two major commercial cargo ports, PPOS and PPL, are well developed and have the facilities to handle liquid, dry bulk and liquefied natural gas (LNG). As for dry docking, repairs and other services, the deep water harbour of the Gulf of Paria is ideal, while also being home to a host of commercial marine operations such as off-shore bulk transhipment, bunkering and cold stacking. 

 

One of the key priorities in transport is to increase international competitiveness, despite already having the second most developed road system in the Caribbean. To this regard, the Government of Trinidad and Tobago has had a number of transport infrastructure goals for the near future, including a plan to improve national roads to ease congestions – a recurrent problem that impacts the efficiency of logistics in an export oriented economy.

 

However, as a result of ongoing austerity measures, the government has had to halt some major initiatives including a multibillion dollar mass transit project. Before major investments take place, a few legislative changes may have to be put in place. For example, it was suggested in September 2016 that foreign yacht repair services become VAT exempt for yacht owners in order to boost the leisure maritime sector.