Akash Sama­roo

Se­nior Re­porter

akash.sama­roo@guardian.co.tt

Couri­er com­pa­nies are warn­ing that for­eign ex­change re­stric­tions could lead to un­em­ploy­ment and a longer wait time for on­line pack­ages.

Con­cerns that there could be prob­lems with the sup­ply of for­eign ex­change have in­creased in the past few days af­ter Re­pub­lic Bank Lim­it­ed (RBL) re­duced cred­it card lim­its from US$10,000 to US$5,000 per billing cy­cle.

Web Source Chief Ex­ec­u­tive Of­fi­cer (CEO) Lin­coln Ma­haraj said that will have lit­tle im­pact on the av­er­age con­sumer be­cause they do not usu­al­ly spend vast amounts of mon­ey per month.

“I don’t be­lieve the av­er­age cus­tomer we have works for $7,000 a month. The av­er­age con­sumer al­so does not spend US$1,000 on their card every month for on­line shop­ping. On­line shop­pers to­day are not lux­u­ri­ous shop­pers, and they don’t spend mon­ey like years gone by.

“Peo­ple on­ly buy ne­ces­si­ties now, school sup­plies, a part for their car or some­thing for their house, it’s not like the Bose Sound­bar or four tyres for their car, peo­ple are not do­ing that again,” he ex­plained.

The re­al cus­tomer pain point will come when they have to wait longer for their pack­ages due to low­er de­mand brought on by the spend­ing lim­it, he said. He said small and medi­um-sized busi­ness­es make up 30 per cent of his com­pa­ny’s cus­tomer seg­ment and their stock comes through the com­pa­ny’s sky­box.

“We have peo­ple that fix print­ers, fix cars, cell phone re­pairs, even op­ti­cal shops, so when you cut those lim­its, those com­pa­nies will suf­fer big time. US$5,000 can­not run a busi­ness. If you think you can bring goods in the coun­try with US$5,000, clear it through a ship­ping com­pa­ny, put it in your store, pay rent, and pay staff, you can­not do it,” Ma­haraj said.

He added that with low­er spend­ing pow­er, com­pa­nies can on­ly or­der half the stock they nor­mal­ly do, and when air­lines no­tice a de­crease in freight on their air­craft, they will re­spond ac­cord­ing­ly.

“If all the couri­er com­pa­nies drop their freight, the air­lines will drop their sched­ul­ing of planes to the coun­try and that is go­ing to set us back­ward even more. The small­er Caribbean is­lands, they will see a car­go air­craft prob­a­bly once per week, maybe twice for the peak sea­son,” Ma­haraj ex­plained.

“We are some­what lucky we get car­go air­craft, Amer­i­jet, and Caribbean Air­lines, on an av­er­age of four times per week. Now when you cut freight to your coun­try, the air­line is not go­ing to see the fea­si­bil­i­ty and prof­itabil­i­ty of fly­ing the air­craft as of­ten as they do, be­cause now we couri­er com­pa­nies can­not fill the air­craft be­cause there’s no mon­ey spend­ing to bring in goods.

“So that right there is go­ing to cut the sched­ul­ing of air­craft com­ing to Trinidad and that is not a good thing be­cause the minute those air­craft find vi­able routes to fill their planes, poof! They’re gone!”  

He said the macro-en­vi­ron­men­tal im­pact of the for­eign ex­change lim­it will be ex­pe­ri­enced in the short-to-medi­um term.

The di­rec­tor of eZone, an in­ter­na­tion­al on­line shop­ping and ship­ping com­pa­ny, said for­eign ex­change re­stric­tions are bad for small and medi­um-sized com­pa­nies and their work­ers.

“I know for a fact that many busi­ness­es, medi­um and small, are us­ing cred­it cards to pur­chase items for re­sale, so a lot of dis­trib­u­tors and re­tail­ers, many au­to part deal­ers, air con­di­tion­ing ser­vice com­pa­nies, they use cred­it cards as a way to pay the sup­pli­ers in the for­eign coun­try to get their goods. That is how they ac­cess for­eign cur­ren­cy, by us­ing mul­ti­ple cred­it cards to pay their sup­pli­ers,” said Paul Pan­tin.

He said 50 per cent of his cus­tomers are busi­ness own­ers at­tempt­ing to main­tain their in­ven­to­ry.

“Busi­ness­es who can­not af­ford to bring in goods will not be able to op­er­ate, they will have to let peo­ple go peo­ple, peo­ple who have goods that they bring in to sell to oth­er re­tail out­lets, they’re not go­ing to have goods to sell for Christ­mas.

“So, de­liv­ery dri­vers, ware­house peo­ple, at­ten­dants, re­tail sales­peo­ple, all those peo­ple will be af­fect­ed,” Pan­tin warned.

He said his in­dus­try was of­ten blamed for the drain in US dol­lars. He be­lieves that is un­fair and ar­gues that the cur­rent for­eign ex­change sys­tem is what push­es busi­ness­es away from tra­di­tion­al ship­ping to the sky­box method.

“The way we ac­cess cur­ren­cy in this coun­try is through cred­it cards and that is the bot­tom line, it is more dif­fi­cult to get cur­ren­cy di­rect­ly from the banks oth­er than cred­it cards and that is why peo­ple mi­grat­ed to cred­it cards. So, to put the blame on cred­it cards and on­line shop­ping is wrong. It’s just how busi­ness­es have had to nav­i­gate through­out the years,” Pan­tin said.