Shipping fees ‘driving up prices’

Seasonal shipping fees could lead to permanent cost increases for Barbadian consumers and manufacturers.

That warning came recently from the Barbados Manufacturers’ Association (BMA) and the Barbados Consumer Empowerment Network (BCEN).

In a joint statement, the two organisations voiced concern that the growing use of peak season surcharges by shipping lines servicing the Caribbean, while intended to be a temporary, had “effectively become a near-permanent increase in freight costs which have direct consequences for the cost of living in Barbados”.

BCEN said the result was higher prices for everyday essentials, including food, household items, building materials and other goods that Barbadians relied on.

The BMA cautioned that the compounding effect of extended surcharges and subsequent rate increases was eroding the competitiveness of local manufacturers and other businesses.

New Minister of Energy, Business Development and Commerce Kerrie Symmonds said he was unaware of
the issue.

“I will try to drill down to find out what the root cause of this is about,” he said.

The Barbados Port Inc. (BPI) indicated that the peak season surcharge issue was not within its remit, but the purview of the shipping industry.

A shipping industry expert said that shipping lines used the surcharge for various reasons, but primarily because of fluctuating demand and operating costs during peak shipping periods.

The BCEN and the BMA noted that these seasonal fees were traditionally applied for a limited period to account for higher shipping demand during the holiday season and end-of-year inventory restocking.

They observed, however, that recent changes to the duration and application of these charges meant that the surcharge now runs for up to five months in some cases “and is immediately followed by
a general rate increase, creating a continuous cycle of freight cost escalation”.

Crowley, one of the shipping companies on the Barbados route, announced last September that it would be implementing a peak season surcharge “from October 5 through March 1, 2026 . . . applicable to all open tariff and service contract rates” to Barbados and 15 other Caribbean ports.

This applied to shipments using 20-foot and 40-foot containers and other equipment ranging from US$150 to US$600. The peak season surcharge is US$0.30 per cubic foot and US$0.90 per hundredweight.

The BCEN said the extended use of the surcharge placed “sustained pressure on manufacturers and importers, who ultimately have no choice but to pass on these higher costs to consumers”, resulting in higher prices.

BMA executive director Shardae Boyce said: “Many local manufacturers import raw materials and machinery to produce goods right here at home, as every input can’t be sourced locally. Examples are aluminium parts used in the production of various mechanical items manufactured here.

“When shipping carriers impose sudden and unregulated surcharges, it directly increases our production costs. We do not have unlimited room to absorb those increases. Eventually, they impact the final price. We must find a way as a country, hopefully in the upcoming Budget, to creatively reduce cost. Reducing prices and building productive capacity are not competing goals; they are the same goal.”

The two organisations said they were not opposed to legitimate, transparent cost recovery by shippers, but called for “greater transparency, proportionality and accountability in how surcharges and rate increases are structured and applied to Caribbean routes”.

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