Updated: September 2019
Shipping is a derived demand and as such, development activity and consumer spending, among other factors, will determine the level of import/export activity. According to TTBizLink figures, year on year (March 2018 versus March 2019) declared vessel calls stood at 310 against 353. However, according to the TT Marine Pilots, vessel calls over the same period was down 6.8%.
With respect to the two major commercial ports, Point Lisas and Port of Port of Spain (PPOS), Point Lisas experienced an 8% increase in TEU container imports for the first quarter of 2019 versus 2018; an 8% decrease in export TEUs, notwithstanding total container vessel calls remaining flat. For PPOS, TEU container imports remained flat, with a 22% decline in export TEUs. Container vessel calls increased by 10%.
The foregoing statistics do not however tell the whole story, at least not in the context of domestic consumption. Agents report that compared to 2018, there has been a further decline in actual cargo imported. When asked why this was not reflected in container vessel calls, they responded that Less than Container Load (LCL) cargo has made up for some of the shortfall in Full Container Load (FCL) cargo so the decrease will not necessarily be reflected in vessel calls.
According to shipping agents, demand is expected to remain flat for the rest of 2019 into 2020. Overall, both agents and ports are cautiously optimistic about the forecast.
There are opportunities in the downstream and midstream segments but given the closure of Petrotrin and recent developments with BPTT, the situation is volatile, and the ability to monetise these chances are highly dependent on Government’s dexterity in negotiating, and the speed with which initiatives are acted upon versus merely planned.
Evolution of the Sector
Over the course of 2018 into 2019, the Government of the Republic of Trinidad and Tobago (GORTT) undertook several initiatives to support development of the maritime industry.
A Maritime Sector Advisory Committee was launched with the primary focus of workforce development through education.
A committee for the Development of Comprehensive National Maritime Policy and Strategy (CNMPS) was also constituted. To date, this committee has presided over the development of the Terms of Reference for the Consultancy to establish the CNMPS.
It is hoped that this development will finally provide the impetus for focus and investment in viable maritime growth opportunities such as transshipment, at least one first-class international standard port (situated strategically), and serious consideration of the Sullivan Island Project – a multifaceted project which has all the potential to catapult Trinidad and Tobago’s drydocking business to first world status, and give a much-needed boost to the sector.
A committee was also constituted to develop the Terms of Reference for a consultancy for the development of a National Transport Plan – of which maritime is a significant component.
The Standing Committee on Maritime Development remains in place but to date, its impact is yet to be felt. Further, unlike similar entities in regional countries like Jamaica and Panama, reports on the progress of the committee are not readily available. Given the level of representation on this committee – ministers and private sector representatives – expectations were high for the outcomes of this committee’s deliberations.
The Shipping Association of Trinidad and Tobago (SATT) has and continues to play a significant contributing role in all these committees.
Work towards the implementation of the Trinidad and Tobago Revenue Authority (TTRA) accelerated in 2018 and continues into 2019.
While the SATT has also been working collaboratively with the head of the TTRA Implementation Unit, we remain cautiously optimistic about this entity’s ability to transform the Customs and Excise Division, bringing about the much-needed reforms to support trade facilitation and improve the country’s “Doing Business” profile. We believe a much higher degree of Government mandate and Opposition support is required to make the promise of the TTRA a reality.
Work on TTBizLink – our Single Electronic Window (SEW) – has increased the level of efficiency with respect to vessel arrival and departure declarations. However, the impact would be greater if two major agencies, Customs and Immigration, were participants. Reportedly, legislative changes are needed to support their participation. This is but one example where legislative change has not kept pace with technological changes.
MAJOR CHALLENGES FOR 2018 – 2019
- Sourcing US dollars. This remains an issue, even though it is now systematic and as such hardly spoken about. While the focus remains on providing manufacturers with foreign currency, the reality is that agents are equally important as shipping lines and must be paid in US dollars. In short, funds have to be repatriated in US for freight, and this is relied upon to pay crew, most of whom are foreign nationals.
- Customs Administration continues to wreak havoc on business. In many respects, the negative impact has become even more pronounced. The division continues to operate without Standard Operating Procedures (SOPs), and this presents customs officers with the broad latitude to conveniently interpret the law at will, arbitrarily introducing new requirements/procedures accompanied by new fees; generally, in the guise of overtime. This tendency has become even more pervasive ahead of the implementation of the TTRA. While the further rollout of TTBizLink provided opportunities to reduce bureaucracy (and redundancy), and therefore improve trade facilitation, Customs has not subscribed. As a major regulator, this has implications for efficiency. Additionally, the agency continues to resist the changes which ICT brings. For every improvement brought about or implied by Customs’ automation through the rollout of ASYCUDA, highly questionable new requirements were introduced, thereby eroding any gains from automation. Of particular concern was the sudden implementation of new fees and additional administrative hassle for routine transactions. Even though Trinidad and Tobago has assented to the WTO Trade Facilitation Agreement, many of the Articles contained therein are Customs focused, and the pace of implementation is woefully slow, with resistance to change remaining high.
- Continuing decline in traditional forms of shipping business without significant new opportunities being progressed or operationalised.
OUTLOOK FOR 2019 – 2020
A: With prospects for meaningful diversification seemingly slim, we are hoping that recommendations for growth and development/investment in viable subsectors of the industry arising from the consultancy for CNMPS, and National Transport Plan (maritime segment) are actioned. With the news of the Toco Port development project, it is hoped that proper evaluation constitutes part of the aforementioned planning and development mechanisms.
B: There is cautious optimism about the Shipping Bill finally being passed; so, the removal of a significant piece of antiquated legislation, the Droghers Act, can be facilitated. The Act significantly restricts international vessels from efficiently moving cargo between ports in Trinidad and moving cargo between Trinidad and Tobago and is one of the reasons why we continue to have a heavily subsidised ferry for cargo operations between Trinidad and Tobago. Without this legislation, far more cargo could be moved by commercial ocean carriers, versus by road and heavily subsidised ferry.
C: The Standing Committee on Maritime Development is to play a more effective and proactive role in advancing economic diversification through the maritime industry.
GOALS OF THE SATT
A: To work diligently towards an increased awareness and focus on the commercial opportunities in the maritime industry;
B:To contribute to significant capacity building in the maritime industry, through lobbying or advocacy, through deeper collaboration with existing public and private sector stakeholders, and through new strategic partnerships
C: To remain a firm advocate for significantly improved governance over the maritime industry, and to continue meaningfully participation in the development of sound and comprehensive maritime policy and strategyView Companies Related to Travel, Ports, Shipping and Courier Services - Who's Who