The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

USING Freeport Container Port’s strategic location to receive cargo from global suppliers seeking to avoid any additional fees at US Ports would provide an opportunity to finally help the island reach its shipping potential, according to Dillon Knowles, Grand Bahama’s Chamber of Commerce president.

Speaking to Tribune Business, Mr Knowles said while there will be some short term impact to the Bahamas and the wider Caribbean if the US proposed up to $1m Chinese-made vessel port fee is passed it provides an opportunity for Freeport to take on a role that it was “designed” to fill.

“Obviously, there are some short-term challenges that The Bahamas and the other jurisdictions in the region would face in terms of trying to resolve how to overcome this fee in an immediate sense. But on a longer term, Freeport was designed exactly for this,” said Mr Knowles.

“We’ve always had a plan to develop a business centre where goods could come in from the East, break in Freeport, duty free and tax free, and then be shipped to destinations in the Americas directly, whether that is the US, North Canada, South Central or the Caribbean. This would fall right in line with that concept that has never really taken off for a number of reasons. I see it as an opportunity and we just need to figure out how to make it happen.”

Mr Knowles said the proposed US fees and tariffs may result in stronger regional trade as we will have to find solutions to combat rising costs.

He noted that while the US has been our preferred trading partner due to lower costs and easier shipping routes than purchasing directly from international suppliers if the cost of shipping results in having to explore new trading partners it must be done swiftly to avoid a further increase to the cost of living.

“I assume that this is going to be a challenge for everybody. Not just the Bahamas, but a lot of the Caribbean as well. Everybody’s struggling at the moment, and any additional cost is just going to exacerbate the problem. And we’ll have to find we’ll have to find ways. I think this may push the Caribbean to be a little closer in terms of its trade,” said Mr Knowles.

“The reason why we generally all purchase from the US is because their purchasing volumes, ensure that they get lower prices than we could get directly from the producers. Also, the logistics between the Bahamas and the US has always been very reasonable compared to logistics of getting directly from the original producers.

“But if the logistics is going to tip the scale and make it more economical for us to go elsewhere, then that’s something that we’re going to have to turn on a dime and make happen, because we can’t afford this increase in cost and cost of living that’s going to be driven by these tariffs.”

This week, Myles Culmer, managing director of advisory services for BDO Bahamas, told Tribune Business via a brief e-mail that the container port’s strategic location allows it receive cargo from global suppliers that could then be shipped on to other Bahamian islands and the wider region. And this, in turn, would enable freight carriers with Chinese-made vessel fleets to avoid the proposed port fee by keeping them out of the US.

Speaking after it emerged that the US Trade Representative’s Office is proposing fees that would massively increase shipping costs from US ports by “thousands of dollars” per container, given that most of the carriers serving The Bahamas and Caribbean have fleets dominated by Chinese-made vessels, he added that if implemented this could help Freeport finally fulfill its potential as the “gateway to the Americas’.

Mr Culmer, who once served as a receiver for the Grand Bahama Port Authority (GBPA), told this newspaper: “Freeport should step up and fill the void with the Container Port and really become the gateway to the Americas. All ships can call on Freeport from Europe etc and escape the tariffs on US-bound cargo... This can be an opportunity for the resurgence of Freeport.”

His comments came as Bahamian businesses and consumers braced for further supply chain disruption and inflation/cost of living pressures as a result of the US proposal, although it is encountering strong headwinds and resistance from US exporters, shipping companies and port operators due to the major financial damage it also threatens to inflict on their financial well-being.