Renu­ka Singh

Sky-rock­et­ing freight rates will now add to the al­ready high prices of goods ini­tial­ly trig­gered by glob­al sup­ply chain dis­rup­tions.

Freight costs went from US$4,000 for a 40-foot con­tain­er to US$20,000 per con­tain­er and with­out Gov­ern­ment in­ter­ven­tion, it is the con­sumer that will have to bear that cost.

On Wednes­day, Prime Min­is­ter Dr Kei­th Row­ley con­firmed that Trinidad and To­ba­go will be im­pact­ed by the glob­al sup­ply chain dis­rup­tions and clogs and yes­ter­day, mem­bers of the food dis­tri­b­u­tion and busi­ness sec­tor weighed in on the ad­verse im­pact of the bot­tle­necks, say­ing there could be high­er prices and even dif­fi­cul­ty for con­sumers to ac­cess goods.

The di­verse group agreed that left unchecked, spi­ralling freight costs will on­ly add to the al­ready heavy fi­nan­cial bur­den be­ing placed on the con­sumer.

Head of the Food Dis­tri­b­u­tion As­so­ci­a­tion, Ger­ard Cony­ers, said the Guyanese gov­ern­ment waives the in­creased cost of freight and on­ly col­lects rev­enue on the nor­mal and un­in­flat­ed cost to help ease trick­le-down costs to the con­sumer.

That is not be­ing done here.

Both the head of the T&T Cham­ber of In­dus­try and Com­merce Gabriel Faria and Down­town Own­ers and Mer­chants As­so­ci­a­tion head Gre­go­ry Aboud, said that freight costs have gone up some 400 per cent in the last year and nei­ther of them could say why.

Aboud added that al­though emp­ty con­tain­ers were be­ing re­turned, the ship­ping cost was still high.

“The freight rate con­tin­ued to es­ca­late, there is no log­i­cal ex­pla­na­tion and al­so there is no need for any ship­ping line to charge US$20,000 to bring a con­tain­er from the Far East to Trinidad. That is an ex­or­bi­tant rate which is ir­ra­tional. It doesn’t make any sense,” Aboud said.

Aboud said it was cheap­er to fly first-class to Japan than it was cost­ing to bring a con­tain­er on a boat.

“It just does not com­pute,” he said.

Aboud said one of the rea­sons for the high cost could be the slow rate of re­turn be­cause of the clogs at var­i­ous ports around the world.

“There al­so seems to be con­ges­tion in trans-ship­ment points at Kingston and Pana­ma, which is go­ing to af­fect T&T in a more sig­nif­i­cant way than the con­ges­tion in Los An­ge­les,” he said.

“An­oth­er is­sue de­vel­op­ing now that is wor­ri­some for those of us that de­pend on Asia, which all of us do for sup­ply line com­po­nents.What use is there in hav­ing fab­ric to sell and no thread to sew it?”

He said there is al­so a new is­sue with the fu­el sup­ply in Chi­na. Ac­cord­ing to in­ter­na­tion­al re­ports, Chi­na has be­gun ra­tioning diesel be­cause of short­ages.

“So first, there was no space on the boat to put your con­tain­er un­less you have US$20,000 in freight, now to­day what they are say­ing is there is al­so no truck to bring it from the fac­to­ry to the boat be­cause the trucks have no diesel,” he said.

“All of these is­sues af­fect the over­all cost of op­er­a­tions and al­so dis­rupt the sup­ply.”

But de­spite the over­ar­ch­ing is­sues, Aboud is con­fi­dent that T&T will be okay.

“By and large, the T&T busi­ness com­mu­ni­ty is rea­son­ably well-stocked, that is my opin­ion,” he said.

As a re­sult of this, Aboud said there was no need for pan­ic.

“I be­lieve there is enough resid­ual mer­chan­dise in the coun­try, yes there may be some short­ages and maybe there would be some items in scarce sup­ply, but by and large I be­lieve that T&T is rea­son­ably well-stocked,” he said, adding the coun­try should be okay for the next quar­ter.

Faria said sup­ply chain dis­rup­tions are not new and af­fects every­one. He de­scribed the cur­rent sit­u­a­tion as a “dou­ble wham­my.”

“We are see­ing the com­mod­i­ty them­selves go up and we are see­ing the freight go up. Freight has gone up, in some in­stances some 400 per cent,” Faria said.

“I have a hard time ra­tio­nal­is­ing the jus­ti­fi­ca­tion for the in­creas­es.

“All the in­puts that are moved have an in­creased cost.”

Faria said while there have been in­creas­es in the cost of goods lo­cal­ly, it was nowhere near a 400 per cent mark-up.

Cony­ers warned that while con­sumers will be able to ac­cess the usu­al Christ­mas goods, they must un­der­stand that the va­ri­ety would not be avail­able and the prices would be high­er.

He said that COVID-19 had caused shut­downs in the cus­tom­ary sup­ply coun­tries and sup­ply chains have dried up.

“A lot of our food­stuffs comes out of the US, our pack­aged foods and they them­selves are suf­fer­ing,” he said.

Cony­ers said that it is not just the Christ­mas goods af­fect­ed but good across the board.

“You will get it but you will not get it in the quan­ti­ties and it would def­i­nite­ly be more ex­pen­sive and you would not get the range,” he added.

“For the next year, con­sumers should ex­pect that things they usu­al­ly buy every week in the su­per­mar­ket, you might come one week and it wouldn’t be there but it would be there the next week.”

Cony­ers ad­vised con­sumers to have pa­tience and called on the Gov­ern­ment to ex­pand the list of es­sen­tial items.

Chief Ex­ec­u­tive Of­fi­cer of the Amer­i­can Cham­ber of In­dus­try and Com­merce, Ni­rad Tewarie, mean­while said the coun­try is al­ready see­ing the im­pact of those high­er prices.

“While com­pa­nies are tak­ing in­di­vid­ual mea­sures to mit­i­gate the im­pact, we all are al­ready see­ing the im­pact of the in­crease in prices, as cost for land­ed fin­ished goods and in­puts in­crease.

“If ever there were a time to piv­ot and take ad­van­tage of ini­tia­tives led by or­gan­i­sa­tions such as the IDB and the stat­ed strat­e­gy of the US gov­ern­ment to en­cour­age nearshoring, it’s now,” Tewarie said.

He added, “Our Gov­ern­ment should work with the pri­vate sec­tor to ag­gres­sive­ly elim­i­nate the bar­ri­ers to at­tract­ing in­vest­ment as com­pa­nies bring pro­duc­tion and jobs back to this hemi­sphere.

“Fi­nal­ly, the im­por­tance of con­tin­u­ing the re­forms at Cus­toms to re­duce the time tak­en to clear goods can­not be un­der­scored. We ap­pre­ci­ate the work al­ready be­ing done by Cus­toms and look for­ward to ex­pand­ing the trust­ed trad­er or vol­un­tary com­pli­ance pro­gramme un­der­pinned by a ful­ly elec­tron­ic clear­ance sys­tem, as promised by the Min­is­ter of Fi­nance in his bud­get pre­sen­ta­tion.”

Gas sup­pli­ers con­firmed and se­cure

Mean­while, Paria Fu­el Trad­ing Com­pa­ny chair­man New­man George sought to dis­pel any con­cerns about a fu­el short­age based on the sup­ply chain bot­tle­necks.

George said he held a meet­ing yes­ter­day with the sup­pli­ers to get the as­sur­ance that the lo­cal sup­ply of fu­el would not be af­fect­ed.

“So far, we have not been af­fect­ed and we do not fore­see be­ing af­fect­ed based on as­sur­ances from our sup­pli­ers,” he said.

George said T&T’s fu­el sup­pli­ers have the “abil­i­ty and flex­i­bil­i­ty” to get fu­el from var­i­ous sources.

“I has­ten to add that on­ly to­day (yes­ter­day) we met with our sup­pli­ers, who re­con­firmed that our sup­plies are not ex­pect­ed to be af­fect­ed,” George said.

And while that is wel­come news, it may be the on­ly bright spot.

TTMA: ex­porters can’t source ship­ping con­tain­ers

Head of the T&T Man­u­fac­tur­ers’ As­so­ci­a­tion (TTMA) Tri­cia Coos­al said while ex­ports have not been sig­nif­i­cant­ly af­fect­ed, some com­pa­nies have ex­pe­ri­enced dif­fi­cul­ty get­ting con­tain­ers for ex­ports.

“Since man­u­fac­tur­ers re­quire that their goods are ex­port­ed in a time­ly man­ner and there is a short­age of con­tain­ers, some man­u­fac­tur­ers have ex­pe­ri­enced in­creased costs to en­sure that the prod­ucts are ex­port­ed on time for fear of los­ing their cus­tomers,” Coos­al said.

But that is not the on­ly chal­lenge for man­u­fac­tur­ers.

“The in­creased costs per con­tain­er (20 foot or 40 foot) re­quire ad­di­tion­al ac­cess to USD by the lo­cal man­u­fac­tur­ers (since ship­ping lines are re­quir­ing that the charges are paid in USD).

“Fur­ther­more, it re­quires man­u­fac­tur­ers to re­view their in­ven­to­ry man­age­ment process­es, to en­sure that enough raw ma­te­ri­als are al­ways avail­able and that there is enough in­ven­to­ry for ex­port to their cus­tomers.”

She added, “These re­views of their lo­gis­tics is es­pe­cial­ly im­por­tant now, since there tends to be an in­crease in the vol­ume of im­ports (and ex­ports) dur­ing No­vem­ber and De­cem­ber. These dis­rup­tions, cou­pled with the checks and bal­ances by the var­i­ous Gov­ern­ment agen­cies (in­clud­ing Cus­toms and Ex­cise Di­vi­sion), can in­ad­ver­tent­ly in­crease costs (e.g. in­creased port rent and de­mur­rage) to the man­u­fac­tur­er.”

Head of the T&T Ship­ping As­so­ci­a­tion Hay­den Al­leyne yes­ter­day told Guardian Me­dia he was un­avail­able and would speak to the is­sue to­day.