Aw, sweet! Secret base finding time!
Like Jarre said in the signpost, you're looking for a well-hidden secret entrance; something that's not easily accessible.
If you were a smuggler trying to hide your ill-gotten gains, you probably wouldn't want to transport it too far.
For that reason, it's likely to be somewhere on the docks.
Jarre theorised that the smugglers hide things in a warehouse or similar building - that's not the case.
You're looking for a part of the dock that would be difficult to access on foot.
On the far left side of the docks, there's a support beam that doesn't support anything.
As if that wasn't weird on its own, there are inexplicable hooks embedded in the nearby walls.
This has the makings of a secret area; we just need something that will carry us across the gap.
Preferably, it would embed itself in the overhead beam.
A grappling hook!
They'd probably be very sought-after in a seedy place like this, so you'll have to look for anything well-secured.
There's a boat with a tightly-knotted tarp covering it near the bathhouse.
We've had to deal with knots before; you can make short work of this one.
Use your knife on the tarp.
The grappling hook will easily get us across the gap.
Nice, we found the smugglers' storage!
Jarre wanted their kraken-newt carving - it must be around here somewhere.