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Puerto Rico Shipping Association

‘We will continue to fight this unjust tariff...’

By Hernán Ayala-Rubio 
President, Puerto Rico Shipping Association

Puerto Rico

As I write this article in mid November 2012 we have just finished exercising our democratic right to elect a Governor and legislative members of the House and Senate of the Commonwealth of Puerto Rico. By the time this article is published, the elected Governor, Alejandro García Padilla and the members of both House and Senate chambers will have taken possession of their respective offices, starting the first year of a four -year term in office with great challenges to come.

Puerto Rico is confronting fiscal and economic woes similar to the rest of the world: almost no growth in GNP and a national debt that increases day by day.  

Puerto Rico’s national shipping association is confronted with an economic atmosphere that does not motivate investors and companies to make new investments. On top of all this, we are trying to avoid cost increases in different areas of the supply chain.

Implementation

The implementation of the 100% Scanning Regulation (started October 2011) has gone through 13 months of inspections and charges with no real results. Not all containers are being inspected, but they certainly have been charged the tariff of $69 per container unit. In addition, all vessels carrying breakbulk, bulk, oil and molasses are being charged but cannot be inspected. Cement carriers are paying US$ 100,000 per vessel.

The Puerto Rico Shipping Association (PRSA), together with the Food Distributors Association, is still in court with a hearing expected in February 2013. In addition to this legal recourse, the Federal Maritime Commission is investigating the regulation tariff. We will continue to fight this unjust tariff and hopefully prevail for the benefit of our customers and the citizens of Puerto Rico. This will continue to be our main priority.

Pilot tariff

We are also negotiating increases in the pilot tariff proposal and negotiating the Container Union Contracts with the Locals ILA. This will probably last until the first quarter of 2013. Together with the election of a new government, we will have a new Puerto Rico Port Authority Executive Director. The person appointed will have to lead the agency through the Private Public Partnership signed by the past administration for the Luis Muñoz Marin International Airport. This provides a challenge for the Port Authority to readjust its structure so as to guarantee its fiscal integrity while running the basic operations of the port.

Port infrastructure

Numerous areas of the port infrastructure have to be attended to, including marine and cruise terminals, bollards, fenders, pier reconstruction, aprons and, most important, the opening of the San Juan Dry Dock, which is long overdue. We already implemented a new Port Dockage Tariff in 2010 that must contribute to the maintenance of all those areas. We must make sure that the collections for improvement and maintenance of such areas are used in accordance with the tariff.

Our Association should not be quick to criticise the actions of the past, but has to be expeditious and diligent in offering assistance to the new Port Director through advice and expertise. We need to empower our Association members into working together for the benefit of the whole and that means forgetting partisan politics and rolling up our sleeves to help in improving the economic and fiscal condition of Puerto Rico.