Monday, April 23, 2012

Port clearance time greatly affects business

Business is becoming more costly and difficult in PNG because of the time it takes to clear cargo at the port, according to the Port Moresby Chamber of Commerce and Industry.
Chamber chief executive officer David Conn, a former chairman of the Port Moresby Port Users’ Group, told The National that it was now taking 10 days on average to clear goods, however, there were cases where it had taken four to six weeks.

David Conn…cost of doing business has risen because of longer port clearance times

He estimated that costs of doing business since start of the LNG project had skyrocketed - which was untimately borne by the consumer.
He said that in other countries, it took only two days maximum to clear goods at the port.
“Ten days is a very rough average (to clear goods at the port), but we are very often hearing of cases where it has taken four to six weeks,” Conn said.
“Several companies we approached said their experience is that the clearance time has doubled from two weeks to anything from four weeks or more.
“Last year, it took seven to 12 days; two years ago, it took six to seven days.”
This is a matter which gravely concerns the chamber, as costs associated with the prolonged port clearance, are passed on to consumers.
“As we have said so many times it becomes more and more difficult and costly to do business in PNG,” Conn said.
“The flow-on effect is that it affects the grassroots people most with the cost of food going up massively.
“A high-cost society puts more low- income consumers under increased pressure and this is clearly reflected in Port Moresby in incidences of opportunistic , petty crime and increased social issues such as alcohol abuse , violence in our settlements and general lawlessness and unaccountability among our citizenery and youth .”
“Freight companies are losing time with loaded trucks sitting at the wharf, waiting for storage cheques to be written up and delivered back to the wharf, which must happen after the truck is loaded, but before it can leave the wharf,” he said.
“There is no such thing as pre-clearance for sea cargo anymore with Customs –this creates delays of up to a week just on that.
“PNG Ports, like all state-owned entities, is forced into a cost-recovery mode, but there are serious maintenance issues on Port Moresby main wharf, and if a user-pay logic is to be followed, prices can only skyrocket.
“Surely the government has to kick in somewhere, as these are essential services that keep the cogs of the economy ticking over.
“We note a recent dividend payment to Independent Public Business Corporation by PNG Ports and it should be expected that port costs would drop as under the current Independent Consumer and Competition Commission regulatory contract pricing was based on this not having to happen.
“If PNG Ports can afford to pay a dividend then the regulatory contract requires them to lower the costs to users.
“We have not noticed this happening as yet.”
Conn estimated about 2,500 containers entered Port Moresby port every month, with “a sharp increase is still expected this year”, and ruled out the possibility of government agencies being prepared to meet the onslaught.
“No new customs cashiers, inspectors, no courses for new customs brokers, no new National Agriculture and Quarantine Inspection Authority (NAQIA) inspectors,” he said.
“John Pomoso from Customs, with regards to the issue of serious shortage of customs brokers in town and no new ones coming through, has said they don’t have enough staff to run the courses to bring on new brokers.
Conn was skeptical about an advertisement from PNG Ports giving importers five days free storage.
“It has been five days free storage for the last three years,” he said.
“Nothing new.
“This should be enough but unfortunately for some time now, it takes much longer than that to get the cargo off the wharf.
“After that, they will charged certain rates per day.”

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