The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Florida-based air cargo companies are threatening to boycott the Bahamas over the new Customs fees and fines set to be introduced tomorrow, with this newspaper told: “It’s D-Day time.”

Tribune Business has obtained correspondence which warns air cargo/freight companies to “be prepared to withhold your services” if it becomes necessary to force the Government to repeal changes that accompany the 2016-2017 Budget.

The letter, addressed to ‘all carriers to the Bahamas’, and copied to the many local couriers and import brokers they serve, warns that the potential liabilities from the new Customs penalties “are more than any reward our airlines can make”.

Arguing that these sanctions could be imposed for infractions over which air cargo companies “have no control”, the letter says the sector “cannot be held hostage by Bahamas Customs”.

Then, suggesting a potential boycott of this nation as a last-ditch response if all else fails, it adds: “The Bahamas needs us as much as we need them.”

The documents seen by Tribune Business illustrate how the shipping/cargo/logistics industry has been thrown into turmoil by the Budget amendments, which again have appear to have been introduced without any warning or consultation with Bahamian or international businesses.

Commerce in this nation is heavily reliant on international transportation to facilitate the smooth movement of goods and services, and any withdrawal or reduction in air cargo services is yet another threat to the Bahamas’ ease of doing business and a functioning economy.

In common with the ocean shipping industry, the cargo airlines are especially concerned about the changes to regulation 147 in the Customs Management (Amendment) Regulations.

This requires all cargo planes to submit their C7 general declaration forms to Customs, detailing all freight items they are bringing in, to Customs one hour before touching down in the Bahamas.

While this will incur a $75 processing fee, any C7s submitted less than an hour before arriving in the Bahamas will be subjected to a $2,500 charge.

Air cargo operators will also be subjected to a $5,000 per item fine for every “prohibited or restricted good” found on board. A fine equivalent to 25 per cent of the value will also be incurred for every item not declared prior to landing in Nassau.

Tribune Business understands that some of the Florida-based air cargo operators were meeting with the Customs Department yesterday in a last-ditch bid to have the new fines and fees amended or delayed.

However, the document sent to all air cargo carriers warned simply: “We are being assessed fees for stuff we have no control over.”

It said the increased fines meant it was impossible for operators to submit their C7 form to Bahamas Customs until they had their final cargo manifest - something that depended on “when your client or customer gets his invoices together”.

The letter added that despite cargo manifests being filled out by clients, it was the air cargo operators that would pay the fines for incorrect listings or the inclusion of ‘prohibited/restricted’ goods.

“The manifest is filled out by your client, but you pay for his actions,” the letter seen by Tribune Business said. “You do not say what is put on your aircraft; your client does.

“If he chooses to move something on the restricted list, then we will pay the $5,000 per item fee prior to getting our [outbound] general declaration.

“We don’t control what goes on our aircraft; our client does, but the fees are assigned to the carrier, you and I.”

The letter also confirmed that the new regulations threatened to undermine the business model for air cargo operators, especially those hired for specific charters, who relied on quick turnaround times after landing in the Bahamas.

“A side effect, which is just as crippling as the financial, is that the general declaration will not be stamped until the cargo has been inspected,” the letter said.

“This is deadly, as there are times Customs takes three to four hours to clear our flight. My aircraft are scheduled with a 30 minute turn time to meet the requirements of our other clients.”

The letter continued: “We, the carriers, cannot be held hostage by the Bahamian Customs to pay fees we have no control over.

“As 135 airlines, we cannot make it in south Florida without serving the Bahamas, but these liabilities are more than any reward our airlines can make.

“It takes only one client to put a box (content one gross) of restricted items on your flight, and you are out of business ($5,000 per item (times) 144 = $720,000).”

Calling on the industry to stand together, it urged air cargo operators to “advise your clients we will not accept this liability to carry their cargo, and for them to advise the Comptroller of Customs of the seriousness of the loss of their trade.

“Contact every person you know who is providing a carrier service to the Bahamas, and advise them of these liabilities. Contact the Customs inspectors you know and tell them you cannot operate under these regulations.”

Finally, it warned: “Be prepared to withhold our services if required to repeal this amendment.

“The Bahamas needs us as much as we need them.”

Executives in the Bahamian courier/import industry, speaking on condition of anonymity, told Tribune Business that the Customs fines threatened to undermine the “same day shipping” model many of them employed. Not to mention their finances, if the cargo companies they chartered passed the fines on to them.

“They really are doing some crazy stuff, and putting it basically on small people bringing stuff in,” one said. “The Act really says that the fine goes to them [the cargo companies], not the client.”

The executive confirmed they were aware that air cargo companies were “threatening” to boycott the Bahamas, and added: “Being an urgent shipper, we fly at certain times. Now, it’s going to be impossible for people to do same day shipping.

“Anyone dropping stuff off, we’ll have to make the closing the night before, except for perishables. I hope they’re not going to roll this out on July 1. It’s affecting everybody.”

Another courier, speaking on condition of anonymity, told Tribune Business: “Those Customs amendments are a serious concern, a pretty serious concern for us. There is no doubt about that, and I know that the shipping companies are concerned as well.

“We haven’t gotten together as yet on this, but there is some stuff floating around that we know comes into effect July 1. Once they say it, that’s it. You can’t fight it; you just have to find ways to work round it.”