The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas-based logistics and supply chain management firm yesterday said it is “opening up the eyes” of local firms to major freight and transportation savings, having reduced a “major hotel’s” costs by 23 per cent.

Henry Johns, vice-president of New Level Logistics, said many Bahamas-based importers were “slowly but surely” starting to see how they were being exploited, and paying more than necessary, for moving freight through the US to the Bahamas.

He added that “the true gateway” to the Bahamas was not through south Florida, but Georgia - Atlanta and the port of Savannah - plus Jacksonville in northern Florida.

Disclosing that New Level, which is based on Moseley Lane, had increased its staff complement to 12 by adding four persons with the opening of its Atlanta office and warehouse two months ago, Mr Johns said his company’s education of Bahamian importers was slowly beginning to pay off.

Apart from managing the hotel’s supply chain, he said New Level was also doing work for two Bahamian utility companies. One wanted his firm to manage its supply chain on a 30-day trial basis, while the other was “interested in how they save money.

“They have been allowing vendors to manage the transportation aspect for them, and have been paying high, exorbitant prices for transportation,” Mr Johns added.

New Level was also working with a “major contractor” with multiple projects across New Providence, requiring cranes and heavy equipment.

“We have opened up the eyes of these importers, explaining the cost drivers of freight moving into Florida,” Mr Johns told Tribune Business.

He explained that trucking and transportation firms in the US typically charged higher rates - sometimes twice the norm - for moving freight into Florida, as it was seen as a congested transport area with no goods/freight coming back from the Bahamas.

“Trucking companies increase their tariff rates for moving into Florida,” Mr Johns added. “We have the hotel a spreadsheet to show what was happening, and they’re saving was 23 per cent as a result of moving their freight through a balanced lane.

“We believe the true gateway to the Bahamas and the Caribbean is not through south Florida but Atlanta, and Savannah and Jacksonville, which are much cheaper.

“That’s the reason why we are starting to see a pattern of change. Most importers feel the southernmost part of the US is most cost effective, and slowly but surely they realise it is the most high-priced lane to do business.

“Most importers do not look beyond Florida. We are stuck in the Florida mindset.”

Another issue, Mr Johns said, was how US vendors supplying Bahamian companies included freight/transportation costs in the sales terms and price.

He urged local importers to avoid ‘terms of sale’ that used FOB, CIF and CFR, and instead encouraged them to switch to Ex-works - a system that requires vendors to provide quotes only when they are at the shipping dock. This strips out the transportation costs.

“Bahamian importers sometimes relinquish control because they don’t have a relationship with a US transportation entity,” Mr Johns told Tribune Business.

“They allow the vendor to ship for the, and are hit with ‘prepay and add’. Vendors will add a higher margin for transportation costs to their invoice.”

Arguing that the merchandise costs was now “inflated”, Mr Johns said that when it came to clearing goods at Customs in the Bahamas, companies here were effectively “hit with a surcharge a second time” as the heightened freight costs were incorporated into the duty calculation.

Apart from benefiting Bahamian consumers via reduced prices from supply chain savings, Mr Johns said this would also help improve the global competitiveness of local firms.

“Bahamian companies do not have to have an account with a US transportation company to move their goods,” he added. “They now have control where they never had it before.”

Mr Johns also disclosed that New Level was working on developing a new ‘peer to peer’ website, Bahamas-Logistics-Procurement-Decision-Makers.

This, he said, would provide “interaction among Bahamian professionals” when it came to resolving common logistics/supply chain issues and problems, and “provide customer ‘best in class’ transportation quotes for those requesting”.