CMA CGM owns up to Kingston terminal troubles

CMA CGM owns up to Kingston terminal troubles

The Kingston Container Terminal is a key Caribbean transshipment hub.

French liner giant CMA CGM sits on both sides of the fence at the Kingston Freeport Container Terminal (KFTL) transshipment hub in Jamaica, where it has controlled the concession for the port facility since July 2016, and at the same time, it is a client, making KFTL a pivotal crossroads for CMA CGM’s cargo operations in the Americas.

As previously reported by Fairplay, a sister product of JOC.com within IHS Markit, KFLT, which is in the midst of a major expansion, suffered significant operational disruptions following a transition from a Cosmos terminal operating system (TOS) to a Navis TOS on August 5. On October 10, sources at the Caribbean Shipping Association (CSA) conference in Barbados confirmed that cargo operations at KFTL were still impaired.

Bruno Gutton, CMA CGM’s vice president of regional operations for the Caribbean and Latin America, was a participant on a CSA conference panel. During the panel Q&A, Fairplay asked Gutton for his insider perspective on what happened at KFTL, why it happened, and when it will be resolved. For an executive of a large private corporation, his response in a public forum was unusually frank.

“I am a customer [of KFTL], so I suffer — a lot — like all of you guys,” he told a crowd comprising regional shipping executives. “I won’t get into the damning details, but I have to say, I am never afraid of the truth.

“So, let’s face it, this change of TOS, for many reasons, was a fiasco,” he said. “Let’s be frank. We launched this too early. I don’t know why. We were not prepared. We were too rushed, we didn’t train, the change the management was not optimal by far, and that’s why we failed. And now we are trying to catch the rabbit.

“Normally, when you change a TOS, what you do is run the old one and the new one in parallel. You train your guys, and then, once you are ready, you turn the tap on for the new one and turn the tap off for the old one. It is my understanding that we didn’t do it like this,” said Gutton.

“It has already been 10 weeks [since the operational problems at KFTL began]. How long will this take? Most of you have probably heard from my good friend Olivier [Tretout, CEO of KFTL] that it’s going to be OK within two weeks. I am hammering him like you are all hammering him, telling him to not tell me it’s going to be all right tomorrow if it’s going to be all right in two weeks, because I’ve got customers screaming at me every day.

“So, my understanding is that within two weeks, we should be back to normal. The productivity is really stepping up as we speak, and the head office [of CMA CGM] has sent strong support. We’re hiring like there’s no tomorrow. I know you have all suffered, and we have suffered, but don’t think we’re just sitting here with our bum on our hands.

“We are working on the double to fix this, because this is damaging,” admitted Gutton. “This is not what Kingston is, and this is not what it will be. This is a great transhipment hub and we are spending hundreds of millions of dollars to make it one of the most pristine hubs in the region – and that will happen. This accident is very unfortunate, but we’re not shying from our responsibility. We’re going to fix it. We are fixing it. And it won’t be just back to normal, it will be better than normal. So just bear with us. We’re getting there.”

While Gutton’s comments focused on the TOS transition woes, numerous sources at the CSA conference told Fairplay that they believe the terminal faced other problems stemming from a growing divide between KFTL’s French management and local Jamaican interests.

Following Gutton’s response to Fairplay, Caribbean Maritime University President Fritz Pinnock countered from the audience: “I don’t see two weeks as a realistic time to fix the problem; it will not be fixed in two weeks. I think the failure [related to operational problems at KFTL] is on the people side, because the integration with the local community has not been very strong to date. It is not about technology, it’s about change management. The people factor must be fixed.”

In response to Pinnock, Gutton said: “I am not the CEO of KFTL, so I cannot comment on the integration in the community, but if that is really the case, it will have to be addressed very quickly.”

Contact Greg Miller and follow him on Twitter: @GMJournalist.

A version of this story originally appeared on Fairplay, a sister product of JOC.com within IHS Markit.