A section of the Port of Kingston in Jamaica (File photo)

J’can business groups petition for reduction in custom duties amid rising freight costs

A section of the Port of Kingston in Jamaica (File photo)

AS global supply challenges, including the rising cost of freight, continue to negatively affect operators in the retail trade, large stakeholder groups have lobbied for Government intervention as they seek to address an issue which is becoming a sore point for businesses.

At least two stakeholder bodies, in separate letters recently written to Minister of Finance Dr Nigel Clarke, sought to obtain a reduction in import and customs duties.

Jamaica’s Minister of Finance and Public Service Dr Nigel Clarke (File photo)

Clive Coke, president of the Customs Brokers and Freight Forwarders Association of Jamaica (CBFFAJ), petitioned the minster to reduce the value on freight used in the calculation of the cost insurance freight (CIF) by as much as 75 per cent, as provisioned in law under Section 19(7) of the Customs Act.

The association reasoned that with activities in global shipping operations not expected to normalise until 2022, rising freight charges per container now averaging US$9000 and estimated to climb to as much as US$13,000 by the end of the year, reasonable action must be taken so as to cushion the blow for concerned parties.

Clive Coke, president, Customs Brokers and Freight Forwarders Association of Jamaica, in a letter asked Jamaica’s minister of finance to reduce the value on freight.

“The CBFFAJ is deeply concerned with how this could shock the local trade, increase inflation and the price of goods and services to consumers,” Coke stated in the letter addressed to the minister.

Since the outbreak of the novel coronavirus pandemic, manufacturers and other players in the retail trade have lamented over growing freight charges per container from Asia, which they said have exponentially increased since the start of this year. Amid the steep rises in freight cost, several manufacturers have had to pass on price increases to their customers, some of which they said were still not enough to absorb fall-offs in the business.

Another letter, signed by powerful stakeholder groups including the Jamaica Manufacturers and Exporters Association (JMEA), the Private Sector Organsiation of Jamaica (PSOJ), the Jamaica Chamber of Commerce (JCC) and MSME Alliance, also expressed similar concerns and lobbied for an adjustment in the way freight charges are now calculated.

The Private Sector Organisation of Jamaica’s in a joint letter with the Jamaica Manufacturers and Exporters Association, Jamaica Chamber of Commerce, and MSME Alliance, lobbied for an adjustment in the way freight charges are now calculated.
(Photo: Chris Lewinson/Jamaica Observer)

“It is, therefore, the recommendation of each private sector group signatory to this letter that the Ministry of Finance temporarily authorises the Jamaica Customs Agency to calculate freight rates with reference to the average rates of the major trade routes reflected in the pre-pandemic period [of] late 2019; and, if this proposal is accepted, for the matter to be reviewed in a reasonable period to see whether the conditions remain suitable to apply this measure,” the letter outlined.

The group, through this recommendation, is of the view that this measure will help to mitigate the impact of these rising costs on manufacturers, traders and the citizens in general.