DAIC Pursues Solutions Brought About by the Global Shipping Issues
The Dominica Association of Industry and Commerce (DAIC) explored the impact of the global shipping issues in Dominica’s private sector on the first episode of its Taking Care of Business Show hosted on Tuesday, February 8th, 2022. Hosted by DAIC Executive Director, Lizra Fabien, panelists International Trade Expert – Andrew Satney, General Manager of Do It Center – Evadney Esprit, Manager of Vees Shipping – Vernesta Newton, and Broker of AC Shillingford and Co. Ltd. – Javeed Joseph provided insights into how this global issue impacts Dominica’s private sector and consumers alike. Solutions to mitigate this issue we’re also explored.
Panelists shared that the shipping industry has been significantly impacted by COVID-19 which exacerbated the challenges experienced by businesses and customers globally. These challenges include production delays in China, limited ships to transport goods in a timely manner, shortage of truckers in the US to transport goods, reduction of human resource capacity within labor force globally, especially in the manufacturing and logistics sectors, heightened freight, and auctioning of containers, among others.
Businesses in Dominica have experienced an increase in prices of goods up to 300 percent. Freight has also increased significantly with an average price of a 40ft container from China increasing from $4,000 EC to over $20,000 EC. This has resulted in a reduced purchasing power of businesses and customers alike due to the domino effect of global issues. Businesses have confirmed their absorption of the increase in prices at times to reduce the burden on consumers.
This situation has encouraged businesses to enhance their communication with stakeholders, especially their customers. Businesses have also increased their strategic thinking to pursue optimal procurement solutions as purchasing just-in-time inventory management is not conducive in this environment.
Panelists confirmed that there are several actions that businesses have taken to reduce the cost of products in consideration of the impact on their consumers. Businesses have increased container load shipments and advanced orders to ensure regular supply of products based on the needs of customers. Businesses have also sought to maintain prices or reduce the rate of increase, cognizant of the fact that consumer income has remained flat.
There is no clear indication when prices will return to normal as the challenges brought about by COVID persists. It would require an all-of-society approach as we seek to alleviate the supply chain and global logistics issues brought about by the pandemic.
Short and medium-term solutions to these challenges could include: policy changes to import duty, smarter shipping by businesses and consumers, enhanced communication by businesses to their consumers, among others.
The DAIC is committed to collaborating with key stakeholders in the public and private sector to implement solutions for enhanced purchasing power of consumers, sustainability of the business sector and advancement of Dominica’s economic development in this critical time. Meanwhile, DAIC encourages the private sector to implement procurement practices that will minimize the cost of containerized imports to ensure savings to customers and maintain adequate communication with customers in this critical time with global shipping challenges.
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