Backlog batters business

Dennis Shipping company, a sea service provider catering largely to the Jamaican diaspora in specific geographic areas in the United States, is pleading with local authorities to strip more than 40 containers that have been sitting at Jamaica’s two ports, some since last year, with emergency hurricane supplies that are no longer of value.

Despite receiving fixed time waivers of free time at the ports during which the containers are expected to be stripped, and before taxes become applicable, the company has paid more than $11 million in fees – a figure company management said was climbing up to last Thursday.

The fees are for containers piled up with others in Kingston and Montego Bay in St James.

A letter dated January 19, and written to Professor Gordon Shirley, president and chief executive officer of the Port Authority of Jamaica, from Dennis Shipping Company’s boss, Dennis Hawthorne, and which was obtained by The Gleaner, sought urgent assistance from Shirley.

“ I am writing to respectfully request your urgent assistance in your capacity as president and CEO of the Port Authority of Jamaica regarding the prolonged delays being experienced in the stripping of our containers. I fully appreciate the exceptional circumstances currently affecting Jamaica’s ports, particularly the significant influx of cargo related to Hurricane Melissa relief efforts. However, the extended stripping times are now severely threatening the continuity and survival of my business ...” Hawthorne wrote in the letter.

“ These delays have resulted in excessive demurrage charges and the loss of business, as customers are unable to receive their shipments within reasonable time frames. To date, I have paid just over J$6.5 million in demurrage charges. While I have received some waiver from the steamship line, I am still faced with outstanding demurrage in excess of J$5.5 million – an amount that continues to increase daily.”

At January 19, the company had 48 containers in Montego Bay awaiting stripping, all accruing demurrage, as well as 30 containers in Kingston in a similar position.

“Despite our best efforts to comply with port requirements and expedite clearance, the compounding costs have reached a level that poses a serious and immediate threat to the viability of my business. If this situation remains unresolved, I regret to say that I may be forced to cease operations entirely,” Hawthorne said.

He expressed understanding of the situation, noting that “... the port is currently constrained by limited physical space. However, I believe that with collaboration, workable interim solutions can be identified to alleviate congestion and accelerate stripping. One such suggestion is the establishment of pop-up, or temporary, stripping sites, in collaboration with the Jamaica Customs Agency, as a short-term measure to ease the backlog ... .”

Hawthorne stressed that his team has been working tirelessly with port managers, CEOs, and other stakeholders for a resolution, “but unfortunately, the matter has now escalated to a point where broader governmental and private-sector intervention and collaboration are required”.

Hawthorne’s general manager, Oshane Wittingham, confirmed the fees already paid, but which continues to climb.

“That has since doubled ... because we’re still paying the demurrage charge, and we have already paid in excess of $11 million. And that still grows because the containers are still sitting there. Once the containers get to Jamaica, whether they are stripped or not, the fees start accruing. You are given a certain free period, depending on the freight line you use, they will give you 10 days free. And the steamliner has been so gracious, in the sense that they have granted some extra free time, and/or discount, but it still doesn’t really negate the fact that the numbers still end up being astronomical, based on the duration of time that the container is sitting there,” he told The Gleaner.

A second charge applies after the container is stripped if not collected quickly.

Wittingham said there was a notification from the Port Authority stating that it was waiving storage charge for shipments sitting on the port between December 1 and January 31.

“So the whole storage charge is what would have been assessed to customers who have their cargo, you know, who would have been subject to storage charges there. But in terms of us, the freight forwarders, there’s no other reprieve to us for that, none, apart from what our freight forwarders, our steamliners have done for us,” Wittingham said.

Adding to Hawthorne’s suggestions about the pop-op sites, he said the Jamaica Defence Force could be used as security personnel, so they can be released quickly.

“I understand the issues around safety and the need to make sure that contraband does not come in. But right now, this formal process has resulted in the chronic situation we now have. But you can still scan the goods and just open them and put them where they need to go. But, you know… ,” he expressed with clear frustration.

Since Hawthorne’s letter, Wittingham said there has been some slight movement at the port of Kingston, but Montego Bay remains almost at a standstill.

It was his understanding that other shipping lines have the same problem.

Efforts to reach another company based in Montego Bay were unsuccessful last week.

An employee at Kingston Freeport Terminal said on Saturday that the shortage of staff for all categories of workers at that level has contributed to the chronic backlog.

Kingston Wharves Limited and Kingston Freeport Terminal are the two trans-shipment terminals operating at the ports and receive containers for each other, according to the source. He said one of the terminals has a smaller storage capacity and that may be part of the problem.

“Chances are they do not have enough people to clear them, not enough resources to deal with it. They are trying to hire people every day because they are short-staffed. They want operators; truck drivers have to double almost every day, and straddle carrier operators. They are doing constant recruitment and continuous training for those,” said the source.

He said Shirley can address the backlog issue, but if the cargo is suspect, Custom Enforcement would be involved.

Kingston Wharves Limited (KWL) said it was working to clear a significant backlog of cargo as customers report long wait times, driven by high volumes post-hurricane and for the Christmas. Efforts to clear the cargo would extend well into February, said KWL.

erica.virtue@gleanerjm.com