Developing a new leg of the economy to supplement military and tourism is long overdue, according to government officials and business leaders who endorsed the creation of the transshipment industry on Guam.
“The proposed transshipment industry and establishment of a manufacturing hub has merit and has been long talked about but has not been fully vetted as a potential revenue source and viable source for employment not only for our island residents but for all of the region," Catherine Castro, president of the Guam Chamber of Commerce, said in her written testimony in support of Bill 2-36, which was publicly heard Thursday.
Introduced by Vice Speaker Muña Barnes, Bill 2-36 proposes to create a roadmap to develop a transshipment industry on Guam as a means to expeditiously jump-start Guam's economy.
The bill, co-sponsored by Sens. Jose Terlaje and V. Anthony Ada, was introduced on the first day of the 36th Guam Legislature.
Castro said the creation of a task force would provide the opportunity for "further exploration and research in the area of transshipment as well as the development of a new manufacturing hub network which, by tapping into local and regional supplier networks could create and generate a new industry and financial resource for Guam and the region."
Karl Pangelinan, director of business development and marketing at APL Shipping Line, said Bill 2-36 would set out to accomplish Guam's oft-repeated plan to diversify the local economy.
"They say you can’t teach location. It’s the very reason we benefit from the two leading industries on island thus far. The same strength comes into play when initiating a transshipment industry for Guam," said Pangelinan, former director of the Guam Economic Development Authority.
He added that with the development of a transshipment industry, there is a possibility to lower the cost of living on Guam.
“Being in the industry, I see first-hand just how the economics of the price of shipping a container from anywhere into Guam. The vessels arrive heavy and leave light," Pangelinan said.
He noted that transshipment opens up the potential for a manufacturing industry on Guam, leading to much-needed exports.
Muna-Barnes said the bill was inspired by recommendations from two studies, Covid-19 and It’s Impact on Shipping and Port Sector in Asia and the Pacific which was done by the United Nations Economic and Social Commission for Asia and the Pacific as well as the Impact of Covid-19 on Logistics which was done by the International Finance Corporation, a member of the World Bank Group.
Additionally, when presenting this initiative to both the Trump and Biden Administrations, they asked for specific action items to facilitate this initiative.
Both studies highlighted the need to develop a regional approach toward improving logistics within the Blue Continent.
“While both government and industry stakeholders, backed by reports from global organizations expressed their unanimous, unequivocal support and excitement to create this new industry for Guam which would finally close the loop on discussions that have been ongoing for the last few decades, I hope my colleagues realize the return on investment with this proposal” Muña Barnes said.
The Covid-19 pandemic has disrupted global trade and ultimately cut off many Asia Pacific nations from any contact with the outside world. As a result, many countries in the region were unable to access essential commodities, critical healthcare supplies and any type of economic activity.
The studies propose to look at alternate shipping hubs within the region to prevent any future disruptions and identified short-term and long-term solutions.
“The timing is right, the opportunity is now!” said former first lady Joanne Camacho, who is now GEDA's deputy administrator.
While the bill did not identify a funding requirement, Camacho said GEDA the agency can “share resources, human capital, financial and otherwise” and also “work with colleagues on the task force to seek additional funding from federal partners."
Carl T.C. Gutierrez, president of Guam Visitors Bureau, described the bill as “intriguing and forward-looking."
The former governor said the creation of a Transshipment Task Force would help the island accomplish its economic diversification goals by establishing Guam as a manufacturing and transshipment hub.
"Congruently, Bill No. 2-36 encourages the U.S. to make better use of the Jose D. Leon Guerrero Commercial Port and A.B. Won Pat International Airport to help protect the Maritime Transportation System (MTS) from vulnerabilities exposed during the worst throes of the COVID-19 pandemic. And this makes perfect sense," Gutierrez said. "Guam’s only commercial seaport is a designated U.S. Strategic Port. Our only commercial airport operates the closest U.S. aviation terminal to Southeast Asia.”
Rory Respicio, general manager of the Port Authority of Guam, said the bill "could not have come at a better time for us as leaders of this island to set the foundation needed to implement the initiatives that would diversify our island’s economy and expand job opportunities for our people.”