From left, Riley and Hylton
Tyrone Reid, Staff Reporter
CONGESTION AT Port Bustamante in Kingston has prompted several international shipping lines to reintroduce a surcharge on local importers.
But the move is not going down well with port officials and local shipping interests, represented by the Shipping Association of Jamaica.
The shipping lines, including Hamburg-Sud, Hapag-Lloyd, CSAV and CMA-CGM, which fall under the umbrella body of London-based WITASS, has advised customers of their intention to reintroduce the surcharge because of the hectic situation at the port.
"The lines have continued to monitor the situation in Kingston and have to advise that, as a result of increasing delays and disruption to their schedules, they have decided to reintroduce the Port Congestion Surcharge in Jamaica," read a notification issued to all WITASS customers.
DIVERTING LINES
Graham McAllen, managing director of Hapag-Lloyd (JA) Limited, the leading WITASS line in Jamaica, laments they are being hit hard by the congestion. "We are still suffering, having to divert lines (and) omit (other) port calls in order to make up schedule," he explained.
He revealed that one third of the business bound for Jamaica is now being brought in by feeder ships, while the greater portion is forced to wait. As a result, customers are receiving their goods eight-14 days late when it has to be delivered by a feeder ship from another port, and seven days late whenever the ships have to wait out at sea.
In reaction to the proposed surcharge by WITASS, Trevor Riley, general manager of the Shipping Association of Jamaica said: "We cannot tell private companies not to increase their rates, but don't tell the public that you are increasing it because of us."
He was refuting WITASS' claim that a fee charged by the association had also triggered the proposed surcharge. Riley explained that the cess, which is US$54 per container imported and US$12 per container exported, is used to finance employee benefits such as vacation leave and health insurance. He said that the cess has been reduced five times since 1997 with the last coming in February 2004, when it was reduced by approximately 50 per cent.
Furthermore, Noel Hylton, chairman and chief executive officer of the Port Authority of Jamaica, denies WITASS' claims of disruptions at the port. "There is no disruption," he said, referring The Sunday Gleaner to Transport Minister Robert Pickersgill.
FINANCING HITCH
In a statement issued yesterday, Minister Pickersgill emphasised that the "Port Authority of Jamaica does not support the imposition of the surcharge from WITASS." He explained that the cause of the congestion at the port was due to a hitch in the financing arrangement for the required equipment to handle the increased volumes, which has resulted largely from the commencement of Maersk's shipping line's new service in February.
Mr. Pickersgill anticipates that the preparation of additional wharf space will be completed by the end of this month, with the equipment arriving from Europe a week or so later. "It is estimated that by the end of July, following assembly, installation and commissioning of the equipment, the waiting time should revert to a normal one to two-day period," he reassured the public.
SURCHARGE WITHDRAWN
In the interim, the customer notification issued by WITASS attempted to console importers by stating that the situation at Port Bustamante would "be kept under review and the surcharge will be withdrawn when the port returns to normal working conditions."
One major importer, who requested anonymity, indicated that the importers, exporters, and ultimately the consumers will feel the full brunt of the increases. The importer argued that the port was not ready for the US$210 million five-year deal it signed with Maersk Shipping Line, the world's largest shipping line, in November 2005, which became effective in March this year.
"The port really was not ready for Maersk. The local population will feel the price increases and people will be forced out of the market," remarked the importer.
WITASS surcharge from June 15
$10,000 (US$146) for 20-ft. container.$20,000 (US$292) for 40-ft. container.Increased terminal handling charges from June 1.
US$218 (J$14,388) per container for importers.US$176 (J$11,616) per container for exporter.
