Susan Gordon, Business Reporter

Michael Bernard, president of the Shipping Association of Jamaica (left) and Edward Chin-Mook, president of the Small Business Association of Jamaica (right). File

A new arrangement designed to curtail theft of shipping containers on the ports imposes an insurance fee on importers, but while the charge is relatively minor, small companies say its an additional expense and, therefore, bad for business.

Container theft is said to represent for the stevedoring industry millions in annual losses, last reported at about $13 million annually.

The new security arrangement requires importers to pay US$2 (J$142) per container on a bill of lading, applied per round-trip movement of container and chassis.

The fee covers the cost of premiums on a new insurance policy, under which shipping interests are covered for containers that go missing or suffer damage.

Charges will add up

But Small Business Association of Jamaica president, Edward Chin-Mook, fears the charge could add up, depending on container movements.

He is also concerned that with the nature of costs, the fee would eventually be set higher, creating new expenses for small companies, eventually forcing them to sell their products and services at higher prices.

"While I understand and sympathise with the challenges of the shipping industry, the imposition of another charge to fix the problem is not the solution which the Small Business Association of Jamaica would endorse at this time," Chin-Mook said in a letter issued to the media.

"Jamaica seems to be a feeding tree. The big companies will not be affected by it. They will not have to pay it with their logistics," he added, speaking later to Sunday Business.

But Shipping Association of Jamaica (SAJ) president, Michael Bernard, who told Sunday Business that the security programme was necessary to reduce the losses incurred from shipping lines for their missing containers, said the US$2 cost would remain fixed.

Defending the move, Bernard said it was an attempt to bring some order to the system.

"It's not something we wanted to do, but the pressures are coming from the shipping lines who say they don't want to suffer any more losses," Bernard said.

Under the agreement, truckers are liable for any damage or loss of equipment once hauled from the port.

A memorandum of agreement was signed to the effect between the SAJ and the Port Trailer Haulage Association January 30.

Truckers who do not sign the new agreement will not, as of Monday, March 3, be allowed to haul equipment on behalf of SAJ members nor the shipping lines they represent.

Keeping up the act

The new super post-Panamax cranes tower majestically over the Port of Kingston. - File

Bernard said the agreement was in keeping with the US Maritime Security Act and the International Ship and Port Security Code of 2004.

About two years ago, the industry had estimated losses linked to missing containers in Kingston and St. Andrew at more than J$25 million over a two-year period.

Most of these were stolen from consignees or exporters after the containers were cleared from the ports of Kingston.

Then, the president had said that the shipping lines would possibly ask consignees to find their way to the wharf to collect their goods, if the situation escalated. But the insurance policy appears to be the solution the SAJ has settled on.

Bernard said the fee was priced at US$2 because: "That's the price the importers gave on the volume of the boxes moving through the port."

susan.gordon@gleanerjm.com