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All this has come in the wake of a decision of Tropical Shipping to increase its rates to Caribbean destinations, such as St. Kitts & Nevis.
According to recent reports, including a press statement from Government in St. Kitts and Nevis, “Tropical Shipping has announced plans to implement a general rate increase for shipments between the continental U.S., Canada, the United States Virgin Islands, Tortola, Virgin Gorda, Dominican Republic, Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Nevis, St. Barth’s, St. Kitts, St. Lucia, St. Maarten, St. Vincent and Trinidad.”
The new hikes in the rates are due to come into effect in less than a month’s time. There will be an amount of $125 per 20-foot equipment and $250 per 40-foot equipment, with other hikes for vehicles and break-bulk cargo, Tropical Shipping said in a statement on the weekend.
The release said the new rates will take effect on 16th September, 2012 and will apply to all open tariff and service contract rates for dry and refrigerated cargo.
Last year, when Tropical appointed its new president, Mike Pellicci, becoming only the 4th person to hold such office in the 48 year old company, he promised that his focus will be on the customers. He said, among his priorities was to provide superior customer experience as well as to optimize system-wide service reliability and asset utilization, as part of Tropical’s total supply chain. However, if these new shipping rates are to lead to higher fees for importers, as they will, it is certain that local business operators will be forced to pass on the increased costs to their customers, who are already protesting the high cost of living in St. Kitts and Nevis.
However, though many companies have had a tendency to follow the lead action of their competitors and also increase their prices/rates, the other major shipping company that services the islands of St. Kitts and Nevis, Crowley Shipping, has given its assurance that they will nothike their rates. Crowley has confirmed that their customers could look forward to having the current rates remain in place, while they continue to provide a high level of customer satisfaction, whether it is related to bulk container loads or less than container loads.
It should be noted however, that sometime in 2011, Tropical Shipping was reported to be up for sale and searching for a new buyer, but some entities that were initially interested, are said to have indicated that the price was beyond reach. It was speculated by some in the shipping industry, that Tropical appeared to have made a strategic move to increase their volume, at what some described as, “at all cost”.
A report showing figures from the most recent quarter indicated that their volume has gone from 35,000 units to 40,000, but their revenue and profit have suffered. This some say, has been perhaps their worst financial showing in years in this market. The idea some believe, is that the company may be of the view that it is better to sell a company with great volume than one with no or low volume.
The theory being speculated is that now that the company has managed to increase its volume of imports to the 40,000 mark, which is almost identical to the figures of 2009, they are now focusing on increasing what shippers call the GRI, (General Rate Increase). Most local importers are wondering however, how they would be affected and the possible implications for the ordinary end users…the public.
Tropical Shipping in St. Kitts is handled by Delisle Walwyn while Crowley Shipping has Hobson Enterprises as their local agent.