Ashford W. Meikle, Staff Reporter
NOEL HYLTON - FILE
PORT AUTHORITY of Jamaica boss, Noel Hylton, threatened on Wednesday to increase charges to shipping lines using Kingston's transshipment port if they maintain port handling charges levied on Jamaican importers.
Hylton told manufacturers they would raise the costs to the lines - Hapag-Lloyd, CMA-CGM and Hamburg-Sud - by the same amount of their terminal fees and hand cash back to importers.
"We have said to the shipping lines that we do not support the terminal handling charge and I think I made the suggestion that you should resist paying the terminal handling charge," Hylton told members of the Jamaica Manufacturers Association (JMA) at their annual general meeting. "I am going to speak to the shipping lines again, and if they continue to make that terminal charge I will increase their charge in the port and I will refund that charge to you," Hylton said.
It remained unclear yesterday whether the three big lines, which are part of the West India Trans-Atlantic Steam Ships Line (WITASS) conference, would back down in the face of Hylton's threat, given the claim by officials they were engaged in normal business practices. Graham McAllen, the managing director of the Jamaica operations of Hapag-Lloyd, said that the charge was 'nothing new' and had always existed. "The only thing that has changed is that it has been increased," said McAllen.
The terminal charges grew out of a cess that the Shipping Association of Jamaica (SAJ), which provides stevedoring and other wharfage services, levied on shipping lines for employee benefits and other costs. That levy is US$54 per container imported and US$12 for those exported.
But, according to Hylton, this cess has been falling in recent years, given increasing productivity at the ports. Hylton told the manufacturers that this fall should be enjoyed by consumers.
But the WITASS conference, unlike other shipping services, has refused to reduce its costs. Instead, its lines recently increased the terminal handling charge by 33 per cent, to US$218 per container - a decision which Hylton branded as "immoral". The handling charge has been built into the overall freight charges, making the delivery of goods impossible unless it is paid.
But while Hylton, whose facility is among the fastest growing transshipment ports in the region, threatened a claw-back on the handling charge, he told importers that there was nothing he could do about a congestion charge imposed by lines, although he was unconvinced about its merit.
In mid-June WITASS implemented the congestion charge of US$146 per 20 ft container and US$292 for a 40 ft box, saying that increasing delays at the Kingston transshipment port, managed for the PAJ by APM Terminals, disrupted schedules and increased costs. A similar charge had been in place from 2004, but was cancelled in February 2005.
"We have no control over whether a shipping line wishes to charge a congestion charge or not," Hylton said. "The fees that they have put in are for three months and we are saying that the length of time that you wait does not merit a congestion charge." Added the Port Authority of Jamaica chairman, "A congestion charge is for a port like Los Angeles where your shipping lines wait three, four weeks. In Jamaica the longest shipping line waits is four days."
Importers say that in recent weeks congestion at the transshipment has resulted in ships diverting to Panama and Colombia, causing, in some cases, manufacturers to shut down operating lines. However, Hylton claimed that there was no serious problem at the port at this time, but expected that there would be period bubbles, given the shortage of freighters to carry cargo and the heavy volumes handled by a port like Kingston. Kingston handles about 160 ships and about 120,000 containers monthly. Such congestion would ease when new ships come on line.
