HIGH COSTS HAMPER CARIBBEAN SHIPPING INDUSTRY

March 24, 2008

High costs and long port delays are major problems for Caribbean nations. Costs associated with importing a 20-foot container range from $1,860 in Haiti to $756 in St. Kitts and Nevis, according to the World Bank. In Jamaica, the cost is $1,350; in the Dominican Republic, it’s $1,015. By comparison, the costs in Singapore come to $367.

The costs include all the fees associated with completing the procedures to import the goods, from the time the vessel arrives at the port to the shipment’s delivery to the factory warehouse, such as costs for documents, administrative fees for customs clearance and technical control, terminal handling charges and inland transport. They do not include the basic freight rate.

Similarly, import delays due to customs and port procedures range from 53 days in Haiti, 35 in Guyana, 26 in Trinidad and Tobago and 22 in Jamaica to 16 in St. Vincent and the Grenadines and 13 in the Dominican Republic, compared with three days in Singapore.

But it’s port and cargo security that will top the agenda when Caribbean shipping executives gather on May 19-21 in St. Maarten for the Seventh Annual Caribbean Shipping Executives Conference. Representing shipping communities of the English-, Spanish-, Dutch- and French-speaking Caribbean, the executives will be in a sour mood when they meet.

Caribbean ports are under pressure from the U.S. to install state-of-the-art inspection technology and to comply with a U.S. law that requires overseas ports to scan 100 percent of containers shipped to the United States. The region’s port executives complain that while U.S. ports receive significant public funds to assist their security initiatives, Caribbean ports must compete with food, health care, education and debt servicing in national budgets.

They acknowledge that effective port security in the Caribbean, considered the United States’ third border, is essential for hemispheric security. However, forcing the region’s ports to meet the same stringent requirements and standards and purchase technology at the same price as everyone else is unreasonable, they say.

The 100 percent scanning requirement is particularly nettlesome.

“Efforts to line up and scan more than 11 million U.S.-bound containers per year will lead to crippling congestion and will force shippers to spend more money on inventory,” said Stephen Bell, general manager of the Caribbean Shipping Association.