The Tribune

• APD chief ‘optimistic’ catch-up fully by end-June

• TEU volumes up 9% year-on-year in second half

• Used vehicles make up 90% of auto shipments

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau’s main commercial port has “closed significantly on making up the shortfall” with container volumes just 3 percent off pre-COVID volumes for the 2021 second half.

Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, told Tribune Business in a recent interview that the BISX-listed operator was “reasonably optimistic” it will return to 2019’s twenty-foot equivalent unit (TEU) throughput levels before its 2022 financial year closes at end-June.

Having experienced “a relatively busy” Christmas as merchants raced to beat the global supply chain crisis and stock up on inventory, he added that the Nassau Container Port’s cargo volumes continue to signal a rebounding economy as the post-COVID re-opening continues despite the recent case surge produced by the Omicron variant.

Disclosing that TEU volumes for the last six months of the 2021 calendar year were 9 percent ahead of prior year comparatives, Mr Bethell also confirmed that cargo throughput for the November-December run-up to Christmas was “pretty much flat” against expectations with performance within 50 containers of the projected amount.

However, the Nassau Container Port chief said cargo content indicated Bahamian consumers have yet to rebound from COVID-induced lay-offs and prolonged furloughs. Recalling a recently-arrived shipment of automobiles, he said some 90 percent were used cars with the latest models making up a very small minority.

Some auto dealers will likely attribute that to their inability to obtain 100 percent of the orders they place with manufacturers, but Mr Bethell voiced optimism that the growing cargo volume trend will hold provided tourism continues to rebound and there are no increased COVID restrictions in 2022.

“We’re almost there,” he told this newspaper when comparing 2021 cargo volumes to 2019. “Revenue is relatively flat, but there’s some project cargo related to the [Nassau Cruise] port that is adding on to revenue which may not be reflected with the TEU volumes.

“We’re still under by about 3 percent on TEUs compared to pre-COVID, but we’ve certainly closed a big gap compared to initially. When we look from July 1 to December 31, 2021, the first six months of the financial year, versus the same six months in 2020, we see that our volumes are tracking ahead of last year.

“Our volumes are up by about 9 percent when we look at the period July 1, 2021, to December 31, 2021, versus July 1, 2020, to December 31, 2020. Even though both of those are periods impacted by COVID-19, the gap has closed significantly on us making up the shortfall on volumes.”

Comparing the 2021 calendar year’s second half with the same period in 2019, which was just before the pandemic struck, Mr Bethell conceded that “we’re still not quite there” when it comes to TEU volume comparisons.

“We’re down by 3 percent for the first six months,” he added. “We’ve certainly closed the gap on pre-COVID volumes, and we certainly feel we can fully close that before the end of this financial year given that we’ve seen in the last quarter, October to end-December, the volumes year-over-year and against pre-COVID have increased.’

The Nassau Container Port chief added that the BISX-listed operator was “reasonably optimistic” that it will return to pre-COVID TEU and overall cargo volumes before end-June “if things continue the way they are, notwithstanding the increase in prices and change in VAT”.

Given that more than 90 percent of New Providence’s seaborne physical imports come through the Nassau Container Port, its cargo volumes provide a reasonable read on the Bahamian economy’s buoyancy or lack thereof - especially when it comes to the construction sector, consumer spending and hotel industry activity.

“It’s been a relatively busy time with a lot of imports trying to get in in time for Christmas,” Mr Bethell added. “It was certainly busier than last year, and we have seen some upticks in our volumes, which is also a good indicator that sectors of the economy which have been relatively slow are seeing an uptick also.

“The Christmas volumes really start to trickle in from October to November. If we were to run the filter reports for October to December, our volumes were slightly under-budget by 2 percent because a lot of things started to come in later in November. That is on the volumes.

“When we look at the volumes for November to December, we’re pretty much flat against Budget - 50 TEUs less than or more than. We call that flat. There’s nothing significant about that. We think it’s very positive. All indications are that Christmas volumes are better than they were last year.”

However, Mr Bethell conceded that the Bahamian economy still has some distance to travel before it fully rebounds. Noting that used cars made up 90 percent of a recent vehicle shipment, he added: “I would suspect that is primarily because lending requirements make it more difficult on new cars and persons are opting for used vehicles as opposed to brand new.

“Many persons may not be able to qualify due to having been laid-off during COVID, or certain members of the household laid-off, so you find a higher percentage of people are opting for used cars as opposed to new cars.”

While construction activity, and associated building materials imports, typically slow down or halt over the Christmas period, Mr Bethell said that was “offset” this year as work on the new US embassy and Nassau Cruise Port continued over the festive period.

“The thing we have to watch is the increasing cost of living despite VAT having gone down to 10 percent,” he added. “I think we’re well on our way in a positive direction unless something drastic happens, and up until this point I’ve not seen anything that suggests that.”