– Four shipping companies not accepting TT dollars from next month
– TTD like “monopoly money” says Shipping Association head
– Fear of hike in prices due to changes
From next month four shipping companies in this country will no longer be accepting TT dollars from customers wishing to import items here, instead, they will only be accepting payment of freight charges in United States dollars.
This has led to concern from some business that it could mean higher prices for consumers and if not more problems for them to import the items they sell.
The four shipping agents are said to King Ocean Services, Tropical Shipping, Crowley Trinidad Limited and Seaboard Marine (Trinidad) Ltd.
“Seaboard Marine wishes to advise our valued customers that effective January 17, 2021, we have adopted a policy requiring all freight charges paid in Trinidad to be done in US dollars,” a release from Seaboard Marine stated.
“The continued difficulty of converting Trinidad & Tobago dollars into U.S. dollars has made adoption of this policy necessary and is applicable on all charges listed on Carrier’s bills of lading. As always, we thank you for your continued support,” it stated.
President of the Shipping Association of T&T (SATT) Garry Dalla Costa said while the entire fraternity has not taken a similar decision he understands the “logic” behind the move taken by the four shipping agents.
SATT has over two dozen shipping agents as members.
“These shipping companies have been collecting freight in T&T dollars, they have been accepting TT dollars and there is one particular company who has just about $50 million in TT sitting in the bank in Trinidad and there is no means of having it converted. So, by and large, they don’t have any real access to the money,” Dalla Costa said.
“Then there’s a second problem using the money. The oil companies in Trinidad if you’re buying fuel off tankers they are not accepting TT dollars, they have to pay in US dollars so this is a situation where the TT dollar basically to them is just monopoly money, you cannot use it,” he said.
Dalla Costa said unless that situation is changed and there is some means of having the TT dollars converted “then really the shipping lines do not have a choice at this time.”
“I plan on having a meeting with the association’s members on it and we will be approaching the minister of finance in the early new year to discuss it,” Dalla Costa said.”
“You cannot operate an operation like this in an ad hoc manner you have to have properly defined regulations in how we do business so I can see going forward unless this is done we are going to have a problem with freight payments in Trinidad,” Dalla Costa warned.
President of the Supermarket Association of T&T Rajiv Diptee said the association as taken by surprise by the announcement and said it will have “massive ramifications.”
“There will be an increased cost of doing business this will affect everyone across the sector, not just the retail sector, but many many organisations that do imports because if this is going to add something to the cost of doing business then that will have a negative effect,” Diptee said.
“We are in communication with the manufacturers and suppliers to really get an idea of how the bottom line will be affected. This is something that took us quite by surprise at a time when we are doing our best to control the cost of doing business which is something we don’t really have control over but which is something which we actively seek in the customers best interest,” Diptee said.
Diptee said this move can have a negative impact going forward.
“Anything on a pre-contractual basis will be held at agreed prices but certainly moving forward this is going to have an impact yet to be measured on how this will affect the average customer and this is something that we are talking to a lot of parties about, a lot of groups, a lot of business entities and trying to get a handle on how this will affect us because this has massive ramifications moving forward for the industry,” Diptee said.
President of Trinidad and Tobago Automotive Dealers Association (TTADA) Visham Babwah said this was another possible nail in the coffin to the industry.
“This is going to have a seriously negative impact on our businesses because of the fact that when we purchase stuff we have to pay in US but we usually pay the freight in TT dollars here so now we will have to find additional US, which is already scarce, to pay the freight amount so it will mean that the allocation that we are getting from the commercial banks to purchase goods will now have to go toward paying freight also,” Babwah said.
Babwah said getting US dollars from commercial banks already has its challenges.
“Getting the allocation is always difficult and the allocation every so often it is being reduced so we are getting a lesser amount from six months ago, and from three months ago, the amount keeps going down,” Babwah said.
“We are going to have to purchase less because the allocation is not going up from the bank,” he said.
Babwah said PriceSmart is one of this country’’s largest importers and users of foreign exchange but that forex is “repatriated.”
“You are giving them the US dollars they are repatriating it, they are bringing whatever goods they are selling in Trinidad and now we have to pay US dollars in freight and in goods. The companies here the agents of these shipping lines should also let the shipping lines know that a certain amount can be collected in TT dollars I don’t know if they have that but they need to understand that it is a problem with our Forex situation and it will run the businesses in serious problems if we have to pay all of these amounts in US dollars,” Babwah said.
Babwah said he expects the situation will result in higher prices and not only for cars but most imported items.
“It will affect prices too because remember then you have a higher demand for the goods because you will be importing less the higher demand for the goods whatever item it may be once demand becomes higher now of course people will raise prices,” Babwah said.
“From our point of view we have been getting the hot end of the stick from the government, the real hot end of the stick in terms of restrictions and now with the shipping lines putting this type of pressure on local businesses it seems very unfair,” he said.
Babwah called for at least 50 per cent of the freight charges being accepted in TT instead of a full change.
Earlier this month PriceSmart announced its forex difficulties.
“Please note that as foreign currency becomes less available, our regular sourcing and merchandising of imported goods may be affected in our clubs,” PriceSmart stated.
“We want to express our commitment on maintaining our business model of providing the highest quality merchandise and service at the lowest cost possible as we work out solutions that can sustain or substitute our imported merchandise offering,” it stated.
“’We understand the value that our selection of items delivers, and we are working diligently to restore any changes to our members’ regular shopping cart,” it stated.