By Lakhram Bhagirat
Major shipping ports across the United States and the United Kingdom are clogged, threatening to further disrupt the global supply chain and according to the Georgetown Chamber of Commerce and Industry (GCCI) if the situation persists then there may be shortages of certain commodities.
During a telephone interview with the Stabroek News yesterday, GCCI’s Presi-dent Timothy Tucker said that while some businesses are already reporting long shipping delays, the situation has not yet escalated.
“We would be concerned if the delays worldwide continue then there might be shortages because of that (delay). We basically are going to have a fair idea of if there are going to be any (extended) delays and what the supplies would be like by the second week in November,” Tucker explained.
American investment bank, Goldman Sachs estimates that there is more than US$24 billion in goods sitting outside the ports of Los Angeles and Long Beach in the state of California. It also warned that backlogs and elevated shipping costs are expected to last until mid-2022.
Major international publications have also reported the anticipated shortages as a result of the backed up ports. It is reported that the increased demand for consumer products along with the restrictions of COVID-19 and the shortage of port workers and truck drivers are all contributory factors to the backlogs at major international ports.
Tucker related that the GCCI is aware of the issues at the various ports and some of their members have already complained of experiencing delays in receiving their shipments.
“Many of our members have complained about the problems related to the delays on shipping and some persons have complained that there is a delay in accessing some items to even supply the government contracts,” he said.
He added that the GCCI has since written to Finance Minister Dr Ashni Singh seeking some “leeway” for those members who have to honour government contracts. The GCCI President related that the letter was sent off a few weeks ago but no definitive response has been received as yet.
“The Minister did acknowledge the letter and said he will discuss it at Cabinet. So, we are now waiting to see what decision will be taken but all I can say is that some of the government orders are being delayed,” he informed.
Shipping costs
On August 9, President Irfaan Ali ordered that freight charges be reduced to pre-pandemic levels in order to lower taxes on imports, thereby relieving consumers of higher prices that have been passed on due to higher shipping costs. He had said that the Customs Act and the Value Added Tax Act will be amended to reflect the concession, which is effective on all invoices dated August 1 and continues in effect until January 31, 2022.
The President had said that his government recognised the hardships faced by the Guyanese people as well as the steep increase in the shipping costs which moved from an average of US$2,500 to as much as US$15,000 per 20-foot container and from US$3,500 to over US$20,000 per 40-foot container.
“This measure will allow for a saving of $4.8 billion to the consumer and business community over the six- month period, thereby reducing revenue collections by a similar amount of $4.8 billion,” a statement from the Office of the President had explained.
Tucker told Stabroek News that the GCCI has been monitoring the rapid rise in commodity prices across the world.
“It is a stagnation in the system coupled with supplies and demand issues that is driving inflation up and that is why the consumer may think that even though the government is giving us tax breaks on different types of shipping (the prices for commodities are still rising). But it is only a container load and that is an issue we also have.
“The shipping that the government has gone back to pre-pandemic rates is only on container loads and with the price of containers, a lot of people cannot ship containers. They are now shipping loose cargo, they consolidating and of course, that break the government has given does not apply to loose cargo,” Tucker clarified.
He added that most of their members anticipated the delay and began shipping their items, for the holidays.
“We want to also tell the public that you have to be conscious that this is not something that local businessmen are trying to gouge or increase prices unfairly, it’s the effects of a global issue in terms of inflation globally, supply and demand globally and the delay in shipping globally. So we are feeling the effects of a global crisis,” he said.
