The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Businesses should brace for a 100 percent increase in container costs for the summer due to the Russia and Ukraine war.

Michael Hall, managing director of Bahamas Maritime Logistics Service (BMLS), told Tribune Business that supply chain issues outside of The Bahamas are not any better than earlier this year and he sees no letting up for the remainder of the year.

He said: “Obviously, there’s a shortage of containers all around the world and most of those containers are coming from China. So in a lot of the major ports, like in Panama, California and New York City, they have a big issue with getting the containers out and back to their origin ports.

“So with also the warring with Russia and Ukraine that has even compounded the supply chain issue, meaning there’s a lot of imports and exports of containers that are now seized and left at the port and can move because of the war, because a lot of major franchises stopping the imports and exports into Russia.”

As the noose tightens around Russia from Western countries with regard to trade sanctions for their invasion of the Ukraine, a lot of commodities such as fuel, wheat, crude oil and flour, are not making it to other countries.

Mr Hall said: “We haven’t really felt it yet because it is like a tidal wave or like a tsunami, because right now there is a lot of withdrawal and then when the wave comes back then you will start feeling it.

“The wave is probably going to hit us around summertime and around hurricane season then we will probably feel it.”

As a result, Mr Hall said: “The cost of containers in the means of the cost of freight and bunker oil and fuel, is going to be astronomical. We would probably see a rise in anywhere from 80 percent to 100 percent in containers, minimum. Because you have to remember now the container is a commodity itself and when you are now ordering supplies that are now on high demand because you are coming out of a pandemic and people weren’t ordering much so you had a back order because businesses were closing down and you didn’t need those supplies anymore. So now people are trying to find a way to offload those goods. You have a lot of that trying to unknot itself while you have a wave of new orders because the pandemic is over and people are trying to start new businesses and there is just not enough. It is now a supply and demand issue.”

The rising cost of fuel will have a big impact on the shipping community as well, Mr Hall said. “Bunker and fuel prices drive everything and if the container ships and the companies that ship the containers are experiencing high volume fuel prices, with part of that fuel increase not being fully felt yet and will be felt within three months’ time, when that fuel has gone up, it’s going to affect everything and we may have $10 gas per gallon by the summertime.”