Thu | Aug 13, 2020

Port headache - Fee hikes, jams hit cargo as fears mount of Christmas crunch

Published:Tuesday | October 22, 2019 | 12:21 AMAndré Williams and Christopher Serju/Gleaner Writers

There are fresh jitters and deepening anxiety about “increasing inefficiencies” at the Port of Kingston that have caused a logjam in cargo movement and an uptick in storage fees that has rattled stakeholders amid heightened concerns as the Christmas season approaches.

Traffic into Jamaica’s ports may also be slowing in the wake of a smouldering trade war between Washington and Beijing that has had seismic reverberations across the globe, a senior port official has acknowledged.

The global downturn has reportedly led to a scaling down of operations at the wharf by at least one international container shipping line, CMA/CGM. That action has triggered a shift in traffic at berths 10 and 11, The Gleaner has learnt.

Richard Pandohie, president of the Jamaica Manufacturers and Exporters’ Association, has cast the local trans-shipment problems at the port as symptomatic of systemic disintegration and disorder, factors that have hobbled the throughput of cargo within the last four to six weeks. As traders look to cash in on the holiday shopping season, there is anxiety that conditions could worsen.

“Separate from the fact that there is a trade war that possibly is impacting the level of shipment to Jamaica, we are generally concerned about the ports – the costs and what we are seeing as increasing inefficiencies there,” he told The Gleaner, adding that the business lobby was planning to have talks with port officials.

Pandohie remarked that users of the port had been victim to sudden hikes in fees that were imperilling traders and placing local manufacturers at a competitive disadvantage with states in CARIFORUM, members of the Caribbean Community, plus the Dominican Republic.

“We have noticed increases in fees and service charges. They are being imposed, but no discussions are being held. Things are just happening, increasingly putting us at a disadvantage,” he said.

Pandohie also revealed that it was taking manufacturers longer to clear containers, thus incurring fees.

“It has been wide-scale complacency the last four to six weeks for most of the exporters and manufacturers. We are concerned about the ports,” said Pandohie, who is also CEO of the Seprod Group of Companies.

“We are trying to reach out to have dialogue with them – both the Port Authority of Jamaica (PAJ) and the operators of the ports – to find out what is happening, because something seems to have changed, and because there have been no discussions, no dialogue, we are at a loss and very concerned,” Pandohie said.

But Kimberley Stiff, assistant vice-president of marketing communications at the PAJ, while acknowledging a decline in cargo volumes globally, sought to downplay the dip in fortunes as a blip in trade that she hoped would recover soon.

“The terminal operator has indicated that they are optimising the use of their assets on an ongoing basis to maximise efficiencies, and no prolonged closure of any quays or parts of the business is expected. It is a fact that the lingering trade war has led to a downturn in global business,” said Stiff in response to queries from this newspaper.

“This has influenced the volume of cargo being shipped internationally, which, in turn, has affected shipping lines and indirectly trans-shipment terminals. The downturn in trans-shipment volumes is, however, expected to be a temporary phenomenon as business confidence in long-term growth of global economies remains strong.”

The PAJ said CMA/CGM has also increased the volumes of cargo trans-shipped through Kingston.

“The temporary reduction in volumes being experienced results from a decline in the volume of other shipping lines using the terminal as a hub, impacted by the global decline in trade volumes. Competition is strong among trans-shipment terminals in the Caribbean. The investments made by KFTL are focused on improving its competitiveness relative to the competing regional ports,” Stiff said.

However, Stiff said she did not anticipate increased Christmas cargo to throw off operations, particularly at Gordon Cay, where investments in equipment, facilities and systems were concentrated.

“The availability of equipment for processing of cargo is high, and the operating efficiencies are good and improving. It is not expected that there will be a shortage of equipment to efficiently and effectively process the domestic cargo which will be handled by the terminal during the upcoming Christmas season,” she said.

A 2017 year-end financial review of the Port Authority and its subsidiaries showed earnings of total revenue of $14.59 billion, a reduction of $5.12 billion (25.9 per cent) compared to the $19.71 billion at March 31, 2016.