Shipping surcharge causes stir

Reports shipping companies will levy a port congestion surcharge on cargo coming into George Town have merchants concerned about the increasing costs of goods.

Word also circulated that the surcharge had been retracted, but conformation of that retraction was not received by press time from several interested entities, including the Caymanian Compass.

A press release on Seaboard Marine’s website indicates that a surcharge of $500 for 20-foot containers and $1,000 for 40-foot containers will take effect 20 February.

The reports said Tropical Shipping, whose agents are Thompson Shipping in Cayman, also indicated it would implement the same surcharge.

The reason stated in Seaboard’s press release for the increase is the delay in berthing in George Town, and the resulting increase in operational costs for the shipping companies.

The release said the surcharge would be retracted ’45 days after conditions at the George Town port allow all carriers to resume their normal operations.’

Woody Foster, managing director of Foster’s Food Fair said he had heard the surcharge was not going to be implemented, but that he had received no official confirmation of the retraction.

The possibility of the extra charge worries Mr. Foster.

‘It would probably cost us a million dollars,’ he said. ‘We couldn’t absorb that cost. We’d have to raise our prices.’

Chamber of Commerce CEO Wil Pineau said he was aware of the surcharge.

‘Some of our members have called expressing their concerns,’ he said. ‘We discussed this issue at our Chamber council meeting just this week.’

Mr. Pineau acknowledged that if the surcharge is implemented, local consumer prices will likely rise.

‘It would increase the cost of (importing) items,’ he said. ‘Someone has to pay for it.’

Robert Foster of Seaboard Marine in Cayman said the charge would not be implemented.

‘The decision to impose the surcharge was made in December based on the situation here in October, November and December,’ he said.

‘Since that time, the Port Authority has taken steps to get back on track, and its systems and operations are improving.

‘Based on that, the VPs of the two shipping companies (Seaboard and Tropical) both said they would hold off from imposing the surcharge,’ Mr. Foster said.

Mr. Foster made it clear the decision had nothing to do with him. ‘I am certainly not in favour of the surcharge, and I would strongly oppose such a measure if it is not withdrawn,’ he said.

Clouding the issue of the possible surcharge is the lack of formal notification that the surcharge will not be implemented.

‘We haven’t officially heard that yet,’ said the Mr. Pineau.

In addition, the press release remains posted on Seaboard’s website.

Several attempts to contact Thompson Shipping about the situation were unsuccessful.

Although things have improved at the port, Seaboard’s Robert Foster said they could get much better, and he singled out one way of improving things even more.

‘The public plays an important role in the process,’ he said. ‘They need to start taking the cargo and returning the containers in a timely manner.’

Mr. Pineau agreed. ‘The most important thing is for people to pick up their goods as promptly as possible,’ he said.

Foster’s Food Fair has seen a big difference since the Port Authority initiated new procedures to ease the port congestion in January, Woody Foster said.

‘The fact that we can now take our shipments straight off the dock to our store without going through the Cargo Distribution is of great benefit to us.’

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