Expect higher prices as shipping fees become ‘permanent burden’ – BMA, BCEN

Barbados may soon face another round of price hikes on everyday goods as temporary shipping surcharges harden into a near-permanent feature of regional freight costs, consumer and manufacturing groups jointly warned on Monday.

 

The Barbados Manufacturers’ Association (BMA) and Barbados Consumer Empowerment Network (BCEN) issued a joint statement, placing the country on alert of the growing use of peak season surcharges (PSS) by shipping lines servicing the Caribbean. They warned that “what was intended to be a temporary, seasonal fee has effectively become a near-permanent increase in freight costs which have direct consequences for the cost of living in Barbados”.

 

“Traditionally, peak season surcharges were applied for a limited period to account for higher shipping demand during the holiday season and end-of-year inventory restocking,” the BMA and BCEN said. “However, recent changes to the duration and application of these charges mean that the surcharge now runs for up to five months in some cases and is immediately followed by a General Rate Increase (GRI), creating a continuous cycle of freight cost escalation.”

 

BCEN said this practice places sustained pressure on manufacturers and importers, who ultimately have no choice but to pass on these higher costs to consumers.

 

“The result is higher prices for everyday essentials, including food, household items, building materials and other goods that Barbadians rely on,” the consumer group said.

 

The manufacturers, on the other hand, cautioned that “the compounding effect of extended surcharges and subsequent rate increases is eroding the competitiveness of local manufacturers and other businesses. BMA members are already operating in a challenging economic environment”.

 

When freight costs rise continuously without a recovery period, it undermines business sustainability, affects employment and weakens national and regional competitiveness, said the manufacturers, warning that they could not absorb indefinite cost increases.

 

BMA Executive Director Shardae Boyce said: “Many local manufacturers import raw materials and machinery to produce goods right here at home, as every input can’t be sourced locally. Examples are aluminium and parts used in the production of various mechanical items manufactured here.”

 

“When shipping carriers impose sudden and unregulated surcharges, it directly increases our production costs. We do not have unlimited room to absorb those increases — eventually they impact the final price.”

 

She continued: “We must find a way as a country — hopefully in the upcoming Budget — to creatively reduce cost. Reducing prices and building productive capacity are not competing goals, they are the same goal. When we empower manufacturers to do business and we empower Barbadians to buy locally made and locally grown products, money stays in the economy, jobs are protected and our country becomes less dependent.”

 

Both BCEN and the BMA stressed that they are not opposed to legitimate, transparent cost recovery by shipping providers.

 

But they called for greater transparency, proportionality and accountability in how surcharges and rate increases are structured and applied to Caribbean shipping routes.

 

As the new Mottley administration prepares to introduce the Budget before the April 1 start of the financial year, the BMA also urged the government to introduce budgetary mechanisms that enable collaboration between government and manufacturers to lower prices on locally produced goods and provide targeted support for manufacturing sectors critical to food security and essential goods manufacturing.

 

BCEN stressed that it is not merely a shipping industry issue but a cost-of-living issue. Every additional dollar in freight charges shows up in the prices Barbadians pay at the till, it said.

 

Both organisations plan to meet with the Fair Trading Commission, government ministries, and the state-run Barbados Port Inc., to seek greater clarity and constructive dialogue on these practices, they said.

 

They also encouraged shipping firms to engage openly with interest groups on how freight pricing structures can be made fairer and more transparent for small island economies.

emmanueljoseph@barbadostoday.bb