The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

LOW freight rates over the last five years have not made this market an attractive place for new carriers according to Arawak Port Development Company (APD) chief executive Michael Maura who said that the throughput volume increases expected from the Baha Mar project should entice some new carriers.

“The reality is that it’s not an attractive place for new carriers today at the rates that are being offered. The deals that the importers get today generally for services provided are very good. It would take something like the Baha Mar project that is outside the norm that offers new opportunities I think to get someone to consider it.

“I’m sure there are carriers that are considering it. I’m sure as they poke around they’re going to ask what’s the going rate on a 40-foot container of building materials, what’s the going rate on a  40-foot container of groceries and they are going to  do the math to find out what’s its going to cost us to start a service and what kind of capacity is in the market.

“When we talk about capacity we are talking about whether the ships that are currently servicing this market are full, because if they are not that’s a problem for someone that’s entering that market. It means the carriers already servicing the market have room to drop rates even further, to attract more business and so forth. If the ships that are servicing the Nassau market are leaving freight behind that would be an opportunity for new carriers to enter the market.”

Mr Maura said low freight rates had caused at least two carriers to pull out of the market.

“Seaboard Marine decided that they had had enough in this market, that the rates were so low that they couldn’t cover their overhead and they withdrew.

“Seaboard as a company is very large company, they are a billion dollar plus company and they’re still in business. With Atlantic Caribbean Line (ACL), the rates had gotten so low in this market, in Freeport as well and the cost to do business in the US had risen so much that they closed the entire business down,” said Maura.

  Mr Maura added: “We’re still not out of the woods economically as are many counties still battling this. I think we still have to try and get through some of that and see Baha Mar bring some  of those benefits that we believe they will and at that point I think we might see some of the other carriers showing up but they are calling, asking what are draft is and so forth so I think we are on the radar.”