The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Bahamian bottled water supplier says sourcing raw materials is the “challenge of the day” sparked by freight charges ballooning by over 400 percent.

Christian Knowles, Aquapure’s senior manager, told Tribune Business that while sales at the company was “going pretty crazy and fairly good,” sourcing raw materials for water was a challenge.

“One of the issues that we’re facing now is just our raw materials have been insane,” he said.

“The stuff that we get from around the world, the lead time has gone from, in some cases, on some of my raw materials, from one to two weeks to 10 to 12 weeks and planning around that and making sure that you have enough stuff to run production has been the challenge of the day.”

There are a lot of items that go into a finished bottle of water for example, plastic resin, boxes, bottle caps, labels and stretch film.

“We manufacture everything. We are a fairly vertically integrated here,” said Mr Knowles.

“Just for an example, our bottles, I blow them in some cases from the resin, the actual plastic, raw material of high density polyethylene resin, and melt them down and I form my bottles and on the smaller packaged bottles and the five gallon, I buy the pre-form, so they already have the mouth and the threads and they just look like test tubes. I then put them through my machine like little balls into various different sizes.”

Further warning of a suspected “cartel of shipping companies” that are unfairly hiking freight rates around the world, putting pressure on businesses, Mr Knowles said: “This time last year a 40 foot container out of China would have cost you between I would say $3,500 and $4,800, depending on which company you went with and if you had to contract them, and so on and so forth. Okay.

“From the same companies shipping out of China, the last report I got from one of my suppliers was $18,000. I had another supplier that I met with just the other day, who said he just got quoted $20,000 for a 40 foot container out of China, just for the container. That is just the freight rate.”

Aquapure joins a list of other companies in the country that have been hit with shipping woes, the construction industry is one of them as containers hauling hardware and lumber have been experiencing challenges for the better half of this year especially if they are routed out of China through Los Angeles, US and then on to the east coast of the US to the Caribbean.

Mr Knowles said prices for bottled water will remain reasonable and are not expected to rise in the short term as a result as he will just have to “eat the cost”.

Mr Knowles also noted, “One of the big problems that we’re seeing is that Chinese companies and Chinese firms and other Asian companies, is that they are paying to get empty containers shipped back to them. So when I need to get my pre-forms out of Turkey, for an example, there’s no equipment available.

“When I want to get my boxes out of the Midwest in the United States, I get my boxes and my caps out of the Midwest, US they not only have no containers available, no equipment available, because they’re all over the place. They also have no truckers available. So that’s why we’re seeing from one to two weeks or two to three week delivery times balloon into 10 to 12 weeks.”

This is going to be a “huge detriment” to our economy Mr Knowles believes. “There is no way that anything like that can be sustainable in any shape or form. These shipping companies are realizing that the market is absorbing these price increases, and when they realise there is market absorption they will not drop the price no matter what happens,” he said.

He added: “Someone with sense in power needs to see what’s going on on the world stage in terms of logistics and, and goods and say stop, you can’t do this anymore.”