Shipping, supply chain squeeze likely

Barbados and its Caribbean neighbours are faced with yet another threat to their supply chain, as new measures from the International Maritime Organisation (IMO) are likely to increase the cost and times for shipping.

This warning comes from chairman of the Port Management Association of the Caribbean (PMAC), Darwin Telemaque, who told the Nation team that despite having one of the more modern ports in the region, Barbados was still “front and centre” of these challenges. He said that despite the measures announced since January 2023, the region was still caught off guard.

The Carbon Intensity Indicator (CII) applies to vessels with a gross tonnage of 5 000 or more and those that engage in international trade. To determine a ship’s efficiency in transporting goods and passengers, the CII considers two critical factors – the amount of CO2 emissions per unit of cargo-carrying capacity (fuel consumption), and the ship’s nautical miles (amount of time spent at sea). 

As a result, freight rates could increase by 15 per cent to 17 per cent to meet the compliance level set by the IMO, Telemaque revealed. Should a fuel change become necessary, the region could see further increase as high as 25 to 27 per cent of current levels, he said.  

“In Barbados you would have some challenges with this measure because your berths are occupied by cruise ships during the cruise ship season and the cargo ships have to wait. It is one of those realities that we all must face; it is not something we can just snap our fingers and change. Barbados has built up a very efficient system so that once a ship comes, they can be rapidly discharged, but if the ships are going to be penalised for waiting, it is going to be a problem.”

He added: “So, Barbados is not immune at all; in fact, it is front and centre. Barbados is in a very southern position, so if ships must slow down it is going to affect the itinerary. If the CII says that you must slow down, could many of the liners go as far down south as they would have liked to? We could only wait and see how they redeploy and make their adjustments.”

The PMAC chairman explained that regional carriers might no longer be able to remove empty containers on a weekly basis. Whereas under normal circumstances, a carrier could return to a port to collect empty containers, carriers are now indicating that this may not be possible going forward, which could result in
port congestion. 

It could also lead to carriers increasing their need to lease shipping containers. Another possibility is that shipping lines may need to lease additional vessels to meet the demands of regional markets.   

“There is one consequence that is already happening which we may not have noticed. Ships are leaving Miami one day earlier, which means that if the vegetables were fresh coming to you on a Monday because they left on Friday, they are now leaving on Thursday and getting to you on the same day. The fruits and vegetables are one day less fresh which is an issue as well,” he said. 

On the way forward, Telemaque said it will come down to lobbying for more time to put measures in place to mitigate these challenges.

“We want the climate to be clean, we want the environment to be saved, but we want our food to get to us less costly. We would like it to get to us in a way that it does not cause as much pain as it currently does. We want the discussion around how we can transition and to give us a little more time to make those adjustments.

“One can argue that we are not very good at sticking to time periods, but the authorities are not willing to roll back or curtail. We need to figure out how to cope,” he said.

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