Business leaders warn of far-reaching economic impact from port congestion fees

The government has moved  to mitigate the impact of new import and export fees at the Bridgetown Port, set to be imposed by a major shipping line in two weeks’ time. The fees, intended to offset costs of congestion and cargo delivery delays, could lead to higher prices for consumer goods across the island.

The Florida Shipping Lines announced its intention to impose additional charges on both full container loads (FCL) and less than full container loads (LCL).

The new fees are scheduled to take effect on February 24 for FCL shipments and March 2 for LCL shipments.

Kerry Symmonds, senior minister coordinating the productive sectors, said key officials are formulating a plan to address the challenges at the port and this will inform discussion with FSL.

Symmonds told Barbados TODAY: “The matter has come to our attention and on Friday the Government convened a full stakeholders meeting to examine the extent of the problem at the port, its causes and to determine best possible reforms and solutions. The stakeholders will report back within a few days and we will be better placed to have discussions with the Florida shipping lines.”

Leading industry players warned Barbadians to brace for a hike in the price of consumer goods if the shipping line imposes the fees.

The Barbados Manufacturers Association (BMA), the Barbados Chamber of Commerce and Industry (BCCI) and the Barbados Consumer Empowerment Network (BCEN) all cautioned that the two-tier congestion surcharge scheduled to come into effect later this month will permeate the entire local supply chain, including consumers’ pockets.

The BMA said in a statement on Monday that it was informed that the surcharge is being introduced to offset costs incurred due to berth congestion and operational delays at the Bridgetown Port.

“The Barbados Manufacturers’ Association (BMA) is expressing concern over the introduction of the new congestion surcharge scheduled to be applied by Florida Shipping Lines due to the congestion at the Bridgetown Port on imports and exports, which could have far-reaching implications for the cost of manufacturing and trade in Barbados,” the statement read.

“The BMA acknowledges that the Bridgetown Port has been facing challenges in recent months, particularly with the timely clearance and movement of containers due to storage constraints, in addition to no cargo days. While the association understands the logistical hurdles, it is concerned that the introduction of the surcharge by the shipping lines could further burden local manufacturers and traders.”

It also highlighted the potential impact on consumers and the competitiveness of Barbados.

“If manufacturers are required to pay additional congestion fees on imported raw materials, the cost of production could rise. This increase may ultimately be passed on to consumers, making locally produced goods more expensive. The added financial pressure could also affect the competitiveness of Barbadian products,  both domestically and internationally,” the association warned.

“For exporters, additional congestion fees could increase the cost of shipping goods out of Barbados, potentially making it more expensive for local businesses to compete in regional and global markets. This could have implications for the overall economy, particularly in sectors that rely heavily on exports.”

BMA president Rakeesh Bernard also called for dialogue and solutions.

Bernard said the BMA wants key stakeholders, including port authorities, government agencies, and shipping lines, to engage in discussions to find solutions that balance the need for efficient port operations with the economic realities faced by manufacturers and traders.

He gave an assurance that the association remained committed to working collaboratively to ensure that any policy changes do not place undue financial strain on businesses and consumers alike.

Chamber president James Clarke also expressed concern over the far-reaching implications of the added cost of doing business which could trickle down to householders.

“The biggest concern would be that any additional charges will multiply throughout the whole system,” Clarke told Barbados TODAY on Monday.

But he said the business sector body has been collaborating with the port and customs towards a meaningful solution to the “complex” operational issues at the Port.

“The chamber has been working with the port on measures to help increase the transit of cargo through the port. It’s not just us…the port, as well as customs, and government by extension. So, everybody is trying to work on getting the efficiency at the port,” he declared.

BCEN also echoed the concerns of the Chamber and manufacturers, focusing on the plight of consumers.

“This surcharge is likely to be passed on to consumers, exacerbating the already high cost of living and placing an additional financial burden on households,” said BCEN Executive Director Maureen Holder.

“While we recognise the logistical challenges faced by shipping companies, including the complexities related to port congestion, BCEN expresses serious concern over the potential impact of these additional charges on Barbadian consumers and businesses.”

She, too, argued that the surcharge is likely to be passed down the supply chain, resulting in higher prices for goods and services.

BCEN also urged the relevant authorities and stakeholders to address the root causes of port congestion through improved operational efficiency, infrastructure development, and better management practices.

“BCEN strongly advocates.” Holder added, “for proactive engagement between the government, the Barbados Port Authority, and shipping companies, to address the root causes of port congestion. We stand ready to collaborate with all stakeholders to mitigate the effects of this surcharge and to support initiatives aimed at improving port operations.”

The port announced a 7.5 per cent reduction in port-related container charges which went into effect on 1 February last year.

The reduced fees apply to each twenty-foot equivalent unit (TEU) for three categories of imported and exported cargo.

For a 20-foot dry container, it now costs $1 377.08; a refrigerated one is being charged $1 434.68 and a loaded export container attracts a charge of $583.66.

The previous port charges that went into force in April 2023 were $1 488.73 (dry), $1 551 (refrigerated) and $630.98 (loaded export).

Port officials did not immediately respond to a request for comment.

 emmanueljoseph@barbadostoday.bb