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Operations | Supply Chain: Jamaica's Landscape

A 2013 study commissioned by the Inter-American Development Bank (IDB) and executed by EAC Consulting in association with Martin Associates sheds light on Jamaica’s logistics performance, benchmarking it against regional peers and global best practices. The findings underscore critical weaknesses in infrastructure, customs processes, and supply chain efficiency that affect national competitiveness.

Key Challenges in Jamaica’s Supply Chain

  1. High Logistics Costs
    One of the study's most striking findings is the disproportionate cost of inventory in Jamaica:

    The inventory carrying cost for Jamaica is 35% of the GDP, which is significantly higher than the US at only 15% of the GDP.

    This highlights inefficiencies in warehousing, customs clearance, and transport reliability, placing significant cost burdens on businesses.

  2. Customs and Border Inefficiencies
    Jamaica has one of the region's highest rates of physical inspections (50% of shipments), with 35% of those undergoing multiple inspections. These delays contribute to clearance times that average five days, compared to one day in countries with minimal inspection.

  3. Infrastructure Deficiencies
    Road and rail infrastructure lag behind, and logistics hubs are underdeveloped. This constrains movement from ports to inland destinations, with lead times for imports taking up to 14 days—double the regional average.

  4. Sectoral Productivity Decline
    The report highlights a significant fall in productivity across most sectors. The table below (Exhibit 1) shows value added per employee in constant 2007 dollars, comparing 2002 and 2010:

    Economic Sector 2002 (J$000) 2010 (J$000) % Change
    Agriculture, Forestry & Fishing 224 197 -12.24%
    Mining & Quarrying 7,556 4,079 -46.01%
    Manufacturing 1,048 839 -19.91%
    Electricity & Water Supply 3,466 3,660 +5.59%
    Construction 589 607 +3.06%
    Wholesale & Retail Trade 767 601 -21.68%
    Transport, Storage & Communication 1,215 1,095 -9.88%
    Finance, Insurance, Real Estate, Renting, etc. 2,422 2,078 -14.20%
    Total 727 663 -8.77%

    This decline in productivity mirrors Jamaica's deteriorating logistics performance, as measured by the World Bank’s Logistics Performance Index (LPI).

Domestic Agriculture Performance

Exhibit 8 of the report provides insights into domestic crop production for 2010, further emphasizing logistics challenges:

Crop Type Quantity (Tonnes)
Condiments & Vegetables 156,591
Fruits 123,005
Root Crops 129,950
Cereals 2,772
Plantains & Bananas 26,689

Despite the volume, inefficient transport and storage limit market reach and post-harvest value, affecting economic returns for farmers.

Conclusion

Jamaica's logistics sector faces systemic challenges, from high inventory costs to infrastructure gaps and burdensome customs procedures. To enhance competitiveness, the report recommends targeted investment in trade facilitation, logistics hubs, and customs modernization, supported by robust national data systems. Without these reforms, logistics inefficiencies will continue to hinder Jamaica’s economic growth.

Appendix

From Farming to Logistics

Everything Fresh Limited, listed on the Jamaica Stock Exchange (JSE: EFRESH), has its roots in Jamaica’s agricultural sector. Founded in 1996 by Courtney Pullen, the company began by sourcing and distributing local farm produce directly to supermarkets. Over the years, it has maintained a strong relationship with Jamaican farmers, helping to bring their products to market and supporting the local agriculture industry.

The company has expressed a continued commitment to strengthening local agriculture. One example of this is its partnership with Crafton Holdings to distribute products such as liquid eggs, which reinforces its role in connecting Jamaican agricultural output to consumers through its distribution network. In 2019, Everything Fresh also acquired Meat Experts Limited, a meat processing company based in Bog Walk, St. Catherine. This acquisition gave the company direct access to a facility that includes a modern abattoir, processing equipment, and cold storage. It enabled Everything Fresh to broaden its operations to include locally sourced meat and further develop its engagement with livestock and produce farmers.

Logistics and Distribution Network

Everything Fresh has built a logistics infrastructure tailored to the handling and distribution of perishable goods. The company operates warehousing facilities, cold storage systems, and a fleet of refrigerated trucks that allow for the safe and efficient transportation of farm produce and other fresh goods. This logistics setup supports timely deliveries to a variety of clients, including hotels, supermarkets, and food service companies across Jamaica.

A core feature of the company’s logistics approach is its emphasis on freshness. Everything Fresh uses a fast inventory turnover model, regularly importing and distributing products to minimize storage time and maximize product quality. This system ensures that farm produce remains fresh when it reaches the end consumer, which is critical in maintaining customer trust and satisfaction. Through its integrated supply chain and continued investment in logistics, the company plays a key role in bridging Jamaican farmers and local retail markets.

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