Nadaleen Singh

Fhe Point Lisas In­dus­tri­al Port De­vel­op­ment Cor­po­ra­tion (Plipde­co) has hint­ed that it may in­crease the tar­iff it charges port users at a time when man­u­fac­tur­ers are com­plain­ing about the in­creased cost of sea trans­port. Asked to con­firm whether port tar­iffs were ex­pect­ed to in­crease in Sep­tem­ber, Plipde­co said: "The port has been faced with in­creas­ing costs of do­ing busi­ness. De­spite con­tin­u­ing ef­forts at con­tain­ing and re­duc­ing as well as im­prov­ing ef­fi­cien­cy, some in­creas­es are in­evitable over time." Plipde­co was re­spond­ing to ques­tions from the Busi­ness Guardian in the con­text of a com­plaint from the Trinidad and To­ba­go Man­u­fac­tur­ers' As­so­ci­a­tion (TTMA) about a pro­posed 12 per cent in­crease in the ter­mi­nal han­dling charges (THCs) which takes ef­fect in Sep­tem­ber. The port tar­iff is charged by the port, while the THC is col­lect­ed by the ship­ping lines. The man­u­fac­tur­ers said: "The Trinidad and To­ba­go Man­u­fac­tur­ers' As­so­ci­a­tion is call­ing on the var­i­ous ship­ping lines to clar­i­fy the rea­sons for in­creas­es in the THC. "The As­so­ci­a­tion un­der­stands that one line, CMA CGM has no­ti­fied mem­bers of a 12 per cent in­crease in the THC charges from US$169 per con­tain­er to US$189, ef­fec­tive from the Sep­tem­ber 1, 2012.

This is the sec­ond in­crease in six months, and sev­er­al oth­er ship­ping lines have al­so ad­vised that in­creas­es in these charges will be im­ple­ment­ed. "The TTMA notes that these in­creas­es add to cost of in­puts in­to man­u­fac­tur­ing which will af­fect the cost of fin­ished prod­ucts, and this will like­ly be passed on to the con­sumers. "This places our man­u­fac­tur­ers in an un­com­pet­i­tive po­si­tion not on­ly in the lo­cal mar­ket but al­so in the ex­port mar­kets. The fee in­crease will have a neg­a­tive im­pact on im­port­ed goods as well, and will add to the ris­ing cost of do­ing busi­ness in this coun­try." the Au­gust 23rd state­ment said. Plipde­co said: "An in­crease in the port's costs does not jus­ti­fy an in­crease in Ter­mi­nal Han­dling Charges im­posed by the ship­ping lines. Ship­ping lines' rate struc­tures are nor­mal­ly de­signed to cater to fluc­tu­a­tions in their costs." The Ship­ping As­so­ci­a­tion of T&T in a state­ment said: "Ter­mi­nal han­dling charges (THC) are ef­fec­tive­ly charges col­lect­ed by ship­ping lines to re­cov­er from the ship­pers the cost of pay­ing the con­tain­er ter­mi­nals for the load­ing or Un­load­ing of the con­tain­ers and oth­er re­lat­ed costs borne by the ship­ping lines at the port of ship­ment or des­ti­na­tion.

For con­tain­ers shipped on an FOB (Free-On-Board) terms, which spec­i­fies which par­ty (buy­er or sell­er) pays for which ship­ment and load­ing costs, and/or where re­spon­si­bil­i­ty for the goods is trans­ferred. The ship­pers at the ori­gin port of ship­ment are re­spon­si­ble for pay­ing the THC at the port of load­ing. This is de­fined as the Ori­gin THC. The con­signees, or buy­ers of the car­go are re­spon­si­ble for pay­ing the freight rate and the THC (or equiv­a­lent) on the dis­charge port of des­ti­na­tion, known as the des­ti­na­tion charge. This is con­sis­tent with the In­coterms (In­ter­na­tion­al Cham­ber of Ship­ping) de­f­i­n­i­tion. Since 1990, most ship­ping lines have in­tro­duced sep­a­rate charges for the freight rate and THC. They rep­re­sent the ad­di­tion­al in­crease in costs that are as­so­ci­at­ed with the op­er­a­tion of mov­ing con­tain­ers, i.e. they are an­cil­lary to the ser­vice pro­vid­ed by the lines." The Ship­ping As­so­ci­a­tion said in a state­ment. Asked how the THC im­pacts on Plipde­co's rev­enue-base, the port stat­ed: "The Ter­mi­nal Han­dling Charge does not af­fect the port's rev­enue as it is a charge that is passed di­rect­ly to the con­signees by the ship­ping lines." TTMA al­so said in its Au­gust 23, state­ment that: "TTMA notes that will lead to de­cline in de­mand for prod­ucts man­u­fac­tured in Trinidad and To­ba­go, which, in turn, leads to de­clines in pro­duc­tion lev­els. "The As­so­ci­a­tion is ap­peal­ing to the ship­ping lines to reeval­u­ate the de­ci­sion to im­pose this in­crease, in light of the neg­a­tive im­pact it will have on the man­u­fac­tur­ing sec­tor.

The TTMA stands ready to work col­lab­o­ra­tive­ly with all stake­hold­ers in com­ing to a so­lu­tion to this con­cern." An­oth­er charge which busi­ness­men are con­cerned about is the in­crease in the port tar­iff which Busi­ness Guardian un­der­stands is ex­pect­ed to take ef­fect in Sep­tem­ber at the Plipde­co port. Com­ment­ing , Plipde­co said when­ev­er an in­crease is im­ple­ment­ed it can­not be avoid­ed: "The port has been faced with in­creas­ing costs of do­ing busi­ness. De­spite con­tin­u­ing ef­forts at con­tain­ing and re­duc­ing as well as im­prov­ing ef­fi­cien­cy, some cost in­creas­es are in­evitable over time." With the in­clu­sion of the Navis Ter­mi­nal Op­er­at­ing Sys­tem, Plipde­co said there has been a 30 per cent in­crease in pro­duc­tiv­i­ty and "over 90 per cent of the ves­sels han­dled are com­plet­ed with­in their al­lot­ted time win­dows."