Second shipping firm in fee rise
Thursday, 23 February 2012 | 00:00
A second shipping company yesterday announced fee increases to offset the costs associated with its move to the new Arawak Cay port, with retailers telling Tribune Business any freight cost rises would ultimately be passed on to consumers, raising the spectre of increased inflation.
Atlantic Caribbean Lines (ACL) yesterday announced a new surcharge for Nassau freight movements, saying rthis was "necessary to cover the increased costs to the carrier associated with moving from a private terminal to Arawak Cay".
ACL said effective from March 31, 2012, the 'Port Surcharge' will be $200 for a 20 foot container, $350 for a 40 foot container, and $400 for 45-foot and larger containers."
According to ACL, less than container load shipments will also increase on March 31, within the tiered rates associated with palletised cargo shipments. The tier from 0-5 cubic feet will increase from $25 to $30; over 5 to 20 cubic feet will go from $55 to $60; over 20 to 50 cubic feet will rise from $120 to $130; and over 50 to 112 cubic feet will increase from $140 to $160.
"These new rates reflect the change in the vessel call from Union Wharf to Arawak Cay, and the added expense of trucking the cargo to the warehouse for deconsolidation and pick up by the customer," ACL said.
It added: "Atlantic Caribbean Lines supports the redevelopment of Bay Street and looks forward with anticipation to the move from Bay Street to Arawak Cay." ACL thus follows Crowley, which recently announced that due to increased operating costs associated with the March 1 tariff implementation and Arawak Port move, it would apply a new charge to open tariff and contract shipments for both northbound and southbound cargo.
Rupert Roberts, owner of the Super Value food store chain, told Tribune Business that any increases by the shipping companies would ultimately impact retailers, with costs passed on to consumers.
"If the shipping companies go up on their fees, that increases our landed costs and we would have to go up on our prices," Mr Roberts said.
Phil Lightbourne, owner of the Gladstone Road-based food retailer/wholesaler, Phil's Food Services, told Tribune Business: "If the shipping companies go up on their fees that affects us big time, and it is passed on to the consumer. They are the ones who pay the price."
Mike Maura, chief executive of the Arawak Cay Port Development Company (APD), in a recent interview with Tribune Business, said the port's new tariff structure was not "unreasonable", describing it as "fair".
Mr Maura said each carrier serving Nassau has different arrangements with their terminal operators. One shipping executive told Tribune Business: "Everyone has been paying different fees. For some it's going to cause more problems than others, because everyone was on a different platform."
Douglas Cowper, Nassau port manager at Tropical Shipping, one of the largest containerised cargo carriers in the Caribbean region and the Bahamas, declined to comment yesterday when asked whether the company would also be increasing its fees in the near future. An executive at Betty K Shipping said the company was not increasing its fees.
While the Progressive Liberal Party (PLP) remains opposed to the $83 million port location, tax attorney and Elizabeth MP, Ryan Pinder, told Tribune Business he was not only concerned with the impact the port's tariff structure would have, but also the minimum 10 per cent internal rate of return (IRR) that APD is guaranteed.
Mr Pinder told Tribune Business: "The costs of goods to the consumer is going to rise. Another thing you have to consider is that you have a guaranteed rate of return of 10 per cent. There's also a risk that if the port, for whatever reason, isn't run efficiently, then even with that guaranteed return the cost of that inefficient operation is also going to be passed to the merchant and then the consumer.
"It's good for the investors, but what does that means for the consumers? There are a number of items in the port deal that ultimately may cause the cost of goods to go up."
Source: Tribune Business