UPDATE: Premier agrees with Andrew Fahie
BVI News Staff - Tuesday, February 21st, 2012 at 1:14 PM
Fahie
Premier Dr. D. Orlando Smith has expressed his agreement with a recommendation made in the House of Assembly by First District Representative Andrew Fahie for local shippers to be given an opportunity to compete with major freighters, saying the suggestion is a feasible one.
On the February 20 edition of the NDP Radio program the question about the viability of the suggestion was put to the BVI leader by the show’s host Eileen Parsons.
Parsons told the Premier: “There is talk about our barges going up to Miami to bring down the freight is that something that can happen, can it be done?”
In response Dr. Smith said the idea was a good one: “Of course it can be done. The question is we will have to look at the whole – the cost of fuel and many issues that needs to be looked into and will be looked into.”
The Premier added: “One of the main things here we are discussing is the cost of freight. Businesses have been complaining that the cost of freight is one of the factors that make them uncompetitive with our neighbours next door especially.
“What we did was reduce the cost of freight. There are other measures that I noted at my press conference: one is to have discussion with the present freighters so that we could initiate a better freight cost between the United States. We understand all of the complications and all of the discussions, and one of the other things that we intend to do and have started already is to have discussions with local freighters and people who are involved with the business locally,” the Premier said.
During the February 14 sitting of the House of Assembly while the Customs Management and Duties Act was being debated, Fahie suggested that local companies be given subsidies to be able to compete in the shipping industry.
STORY EARLIER THIS WEEK
Umoja co-host Natalio Wheatley aka Sowande Uhuru said he was pleased to hear the suggestion made by First District Representative Andrew Fahie for local companies to be given subsidies to be able to compete in the shipping industry.
Uhuru said the idea, which was announced during the February 14 sitting of the House of Assembly while the Customs Management and Duties Act was being debated, was a good one.
“It was a very interesting debate and the Opposition came alive and made some very interesting points in that debate,” Uhuru said.
He added: “Andrew Fahie made a good point about freight in terms of freight being the majority of the cost, and one way he suggested we can help to lower the cost of freight is by subsidizing temporarily some of our local companies to go to Miami and provide some competition for Tropical and some of the others down here that have the cost of freight so high. I thought that was a good point that Andrew made.”
During the debate, Fahie suggested what he termed was meaningful investment behind local enterprise.
“Madam Speaker, I put it to the Premier that what we can do as a solution is to let us subsidize some of our local shipping companies here. We have a lot of them. Let’s subsidize them and send them to the mainland. We subsidize smaller than that and let them come back where the freight is a more reasonable price,” the representative stated.
Fahie added: “Let’s put our money where our mouth is and subsidize and send them to the mainland; send them there once a week and one coming down Monday and one coming down Wednesday. Let’s help organize them. And when they come Madam Speaker, then we will be able to hit the prices here a good punch because the freight Madame Speaker, will be down and the freight Madam Speaker will not be much revenue loss from the Government per say…When you have that kind of savings and you spread it across the goods, then you will have a more effective way of bringing down the prices.”
Copyright 2012 BVI News, Alliance News Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.
33 Comments
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Shipping requires a balance of trade. Every facet of the business must be carefully studied. Running a vessel to Miami is one thing but one must remember ports are regulated and some are heavily unionized. Berthing along the Miami River amongst puddle jumpers is not an option.
Southbound cargo and turn time of containers and chassis is also critical for start-up carriers. To make a sound profit, serving multiple ports and/or islands makes sense.
Very well put. Local freighters will need massive subsidies just to compete with Crowley, Tropical and other established carriers. And what about the shoreside service for less than container loads (LCL) where the money really is? Can local companies afford to establish warehousing with cargo consolidation possibilities?
Remember, it was Fahie’s opponent in the last election who first took on issue and brought it to the forefront: http://www.stouttforbvi.com/issues/#consumer
Stoutt’s solutions were more hard hitting and wouldn’t cause us more government debt.
Ah ha. Keep them coming. Whose agenda we on next?
Fahie we bringing you over to the NDP soon ok?
We just need to baptise you so you don’t bring the ways of Fraser to our party.
The reason FedEx is more expensive is because that is all they do they are not a commercial airline! just freight. and others, on the other hand the cost for incoming freight varies which also cause the freight to be more expensive by the label of contents comodity etc., and the taxes which the Goverment charges the people is high. Another thing is that BVI Goverment control the ports cargo, that should not be they should only be collecting the general declarationts and manifest and not competing with people who can get the business as shippers agent.We suppose to be able to work as a community train the people and let them be their own bosses, when they mess up the agents will look for another agents people need to be responsible.Supporting local freight companies is a great idea but it comes with lots of responsibilties. It songs Good but it need a lot of work.
Fahie trying to save his own behind, sucking up to NDP and the Premier falling for it. Agree with every bill to pass Andrew, don’t mind the other 3 blind mice on your team!
Brilliant! An we’ll fix high airplane fares by buying a plane and flying around in it. We’ll make dam sure the cruise passengers enjoy Tola because we buy cruise ship, bring passengers her, stay full week! People, people… give companies some credit for learning their trade. Nothing is as simple as it seems, and certainly shipping is a fine example. Tropical can cost less because they do it all: trucking, warehouse, freight forwarder, stevedore, shipping line. Little boats like we have go dock to dock, pay everybody come with their hand out to add on to freight costs. Why is it news when government giving out cash with no strings? It should be BIG news when they learn to save, and to spend wisely. Freight is not what is crushing us.
the man obviously doesn’t know what he’s talking about. My personal business relies on all shipping routes here for my goods – after all, I’m only as good as my shippers! Why was he dissing Tropical? They are far the least expensive in the whole of the BVI and actually very organized (if you liaise with the Miami office and NOT the Tortola office). I also have accounts with DHL, FedEx, RushIt, and E-Zone. They are all reasonable (apart from FedEx, but that’s obvious). Fahie needs to get out of politrics and get back in the real world, but I for one, would NOT hire him.
Crowley is less expensive than Tropical.
Subsidize freight??? I thought the government was broke so how are they going to find the money to subsidize a freight company??? And once they start a subsidy – everyone will have their hands back in the cookie jar – it will be worse that petty contracts.
Do these guys thinks before they open their mouth? Andrew and Wheatley must have smoke some high grade just before they made their comments cause they both certainly on cloud 10!
Agree with T2DB statement below!!! We need to use the natural sun and wind to generate power for our homes and businesses. I can’t sustain the energy rape no more.
T2DB is the one hit nail on the head – BVIEC Bills are killing both consumer and businesses. I run a medium size business and electricity accounts for 1.4% of my costs – guess who pays that? The consumer. In developed nations energy cost makes up 0.02% of business expense. It is 7 times higher in the BVI
Shipping represents on average 5% of landed cost of most goods imported into the territory – BVI Port Authority fees and charges represent 15% of freight cost. Tropical has just announced a 20% reduction in freight charges. It is irresponsible of anyone to say that Freight represents the majority of the costs. We import everything we consume, so naturally everything is expensive. Also look at the volume – St Thomas imports 4 times as much as the BVI, so our freight costs will obviously be more. On average our landed costs – after shipping, duty, and clearance fees, are 15% more expensive than St Thomas. When you factor in the high cost of rent, electricity and salaries, goods are retailing 25% to 35% more than in St Thomas
so what r u trying to say? then what’s the solution?
There is no One Solution. There are several small things we can do to alleviate the obvious;
1. Government must eliminate import duty on solar and wind generators and all that are connected to these energy sources – batteries, inverters, chargers, etc…
2. Port Authority should become more efficient and reduce fees and taxes that they impose on goods
3. Government must streamline rules and regulations imposed on businesses, so that in turn businesses can cut back on support staff that now spend hours filling in Government forms, Filling documents and keeping them for 7 years, etc…
4. BVIEC must be better regulated so that there is a limit on what they can charge consumers. BVIEC needs to become more efficient so that they can reduce costs.
5. Last but not least, we as a people must lower our expectations and learn to live within our means.
I think what Proof is saying is that the maths just doesn’t work. If only 5% of landed cost is freight, let’s say the subsidies are hugely successful (and they might not be, but let’s just say), and they reduce that to 4%. That means goods are then only 1% cheaper! The Govt can do the same job a lot more simply by just cutting duty on imported goods by 1%. But that would not line the pockets of the local shipping companies.
If Government should subsidize anything its the damn light bill that’s killing people. Subsidize the fuel surcharge for a few months and people can use that savings to buy food in the supermarkets. Everyone benefits, even businesses as they too had to put prices up to take the higher BVIEC bills into consideration.
That’s an easy fix! I remember the time when we never paid a surcharge and even when it was first introduced, it was like 1/4 of the bill. Now it’s half or more of the bill. That’s our problem not no damn shipping from miami. Get energy costs down and everybody will be happy. That’s much easier than this pie in the sky nonsense. Did anyone stop to think on added regulations for leaving BVI going direct to Florida?
Anyway, I’m sure if the Government can reduce the light bills EVERYBODY, consumers and businesses will jump in the streets for an entire week! It’s MURDER! BVIEC bill is not one you can pick and choose! It MUST be paid and it’s killing people!
Subsidise out of what? The health, sewage, police or education system?
Where was this 4yrs ago? This is the guys’ 4th month in office. How do you know they don’t have additional plans to deal with these very issues? If they did nothing they would be chastised. Now they’ve started the process, they’re being chastised even more. If I were the NDP, honestly, I would resign and have them call a bielection so that VIP could take back over teh country with Ralph as leader and Fraser as deputy. I swear to god that’s what some people in this country deserve!!!!!
Wheatley. I thought you had more sense than that. But I realise that you and Khoy Smith and them are Socialist anyway. You and Khow them always want the Government to subsidize something. Fahie should be ashame to suggest something like that and Wheatley, you should be ashamed to repeat int.
so why wasn’t Fahie suggesting something like this from the time he was elected into Office….or rather the last 4 years ago???/ Where have u been??? Its good now to show up and comment when somen is trying to go good, but your last 4 years was outright in the gutter….
I agree subsides will ot work but put more profit into the businesses pockets. However once that happens who deternmines when and how much we save in the supermarkets?wasn’t this the same young man who spoke about imposing a sales Tax…Oh My Oh MY!!!! dont you know young man the that in hardtimes you are bringing opression to your people??? by now the populance would have been at the HOA with rope, lighted torches and fork picks hell bent on stringing somebody up!
Fahie needs to be hit over the head. WHen he was a part of Cabinet what did he put forward to ease the burden on we the people? All of a sudden he’s Malcolm X and Martin Luther King all in one? Schuups!
HAHAHAHA. I do not support violence but had to laugh
what’s really interesting is that the majority – if not all – legislators are businessowners. talk about conflict of interest so why do we expect them to follow thru on their word or accurately hitting the RIGHT NAIL on the head which is consumer protection legislation. for years these businessowners (in the guise of politicians) have promised over and over, passing legislation to have some control over price increases and have yet to do so, even in an economic crisis. take them serious, not!
The title of this article is “Andre Fahie hits the nail on the head”. Since when did BVI News stop reporting on the news, and starting deciding who is right and who is wrong in House of Assembly debates?
I agree. The headline was opinionated and has been fixed. Initially the intent was to attribute the headline to Mr. Wheatley.
This is the man who wants to subsidize drag racing. Get real
talk talk talk and more talk…. typical caribbean
Why do we always put the cart before the horse in the BVI???!!! Sure, give a subsidy for shipping and there is no consumer protection or price control in place. Business owners get a break but the end user gets shafted as usual. Fahie throws out this idea but have no figures to support his statement.
We could subsidise all we want, these tiefing businessowners wont budge. Legislation needs to be drawn up in which govt has muscle to flex the prices of goods and services in line with subsidies
That is right. Subsidies will just mean more profits for businesses. Not cheaper goods for ordinary people. It is pure crazy talk.
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