Importers are in line for a reduction in freight costs as officials of the Bridgetown Port Inc. (BPI) press ahead with changing the way port charges are applied.
Chief Executive Officer of the BPI David Jean-Marie gave this indication on Monday, adding that he is scheduled to have discussions with members of the business community to see how savings could be passed on to consumers.
He explained that the BPI was making progress in moving away from the current hybrid system where some port charges are collected locally and others are collected via the shipping agent.
“We have been in discussion with the Florida Shipowners Group, the umbrella body for the shipping lines we trade with out of Florida, to move Barbados to what we call a Free Out port which means that all charges will be collected locally,” said Jean-Marie, explaining that BPI officials met with cruise lines as well as the Group’s operations committee.
“We have looked at it and we have identified the port charges that are within the freight and we expect them to come back to us this week.”
He said that based on the BPI’s calculations, the change should result in “a reduction in the freight by removing the port charges that are in the freight by US$520 per 40-foot container”.
Total freight costs depend on several factors including weight and country of origin of the container and can be as high as thousands of dollars.
“I have spoken to the president of the [Barbados] Chamber of Commerce [and Industry] and they are also in support of this initiative but we would have a conversation to ensure that this reduction in freight…will also redound to a reduction in the cost right down to the Barbadian consumer,” said Jean-Marie.
“Those discussions will be taking place so that by April 1, we will see a reduction in freight costs via the port charges, a slight increase from the Port locally, but an overall benefit of a reduction of costs, which is projected to be anywhere between 8 to 10 per cent of the Port cost.”
Jean-Marie made the disclosures as he responded to questions in the well of the Lower House on Monday as the debate on the Appropriation Bill 2023 got underway with the Ministry of Tourism and officials from related agencies being first in the hot seat.
He also reported that officials were continuing with the expansion of the Bridgetown Port in an effort to accommodate additional business in trans-shipment.
That expansion includes the ongoing extension of the north cargo berth, two new cranes and plans to establish a free trade zone.
“We have the plans already for the buildout of the container freight station and we are in discussion with private sector members who are interested in working with us in developing Barbados as a major hub in the southern Caribbean,” said Jean-Marie.
“We are also renewing our sister port agreements with various ports and also we have draft agreements already submitted for example, with the port of Mombasa [in Kenya]. We are looking to renew the agreements with Suriname as well as Miami and several other ports, the various shipping lines and agents in Barbados.”
The BPI boss also indicated that a decision was taken to transition the management of stevedoring operations to the Port, adding that discussions on the matter were being held with the Shipping Association of Barbados and the shipping lines.
“The workers are all Port workers and are all trained in stevedoring operations and, therefore, it is a natural progression,” he said.
Jean-Marie also noted that officials were hoping that within the next 18 months, the BPI would transition into a holding company.
“This would be what we call the second wave of corporatisation,” he said while recalling that the Port was incorporated in 2003 following its creation in 1979, with the combination of the port department and port contractors.
“We are now moving towards having BPI as a holding company owned by the state, workers and workers’ representatives and the National Insurance Scheme, hopefully. There will be a number of subsidiaries reporting to this company and . . . we will be able to have a democratisation of ownership in the Port. These subsidiaries include a new cruise company, for example,” said Jean-Marie.
He added that the venture will provide an opportunity for Barbadians to invest.
“We have identified nine possible companies for such operations and it will be done by the preparation of business plans and issuing of initial public offerings to give the wider community and any member of the country [an opportunity] to invest in these various entities – the aggregate berth, the shallow draft marina project, the container freight station,” he said.
