Manufacturers’ council weighs in on freight issue

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INVESTMENTS decisions by PNG Ports Limited and stevedoring companies indirectly contribute to the high freight charges by domestic shipping companies, according to the PNG Manufacturers’ Council.
Chief executive Chey Scovell was responding to concerns raised by the Independent Consumer and Competition Commission on the high cost of shipping freight locally.
“We note that the costs for domestic shipping are high as is with most things in PNG where we pay too much for,” he said.
“However, with specific regards to shipping, we are mindful that our domestic shippers have to service routes that are not necessarily profitable.
“The international shippers or vessels are able to cherry-pick on places that are very busy.”
Scovell said the council conducted an analysis several years which found that there was a lack of productivity and efficiency in stevedoring companies due to poor infrastructure at the ports.
“Many of stevedoring companies have not made the right investments in portside infrastructure such as cranes, forklifts and storage facilities,” he said.
“Our analysis revealed that there were some reasons for those high costs that were not necessarily the fault of the shipping companies.
“It has to do with the fact the PNG Ports haven’t made the right investments in making sure that we have class port loading infrastructure.”
Scovell said landowner companies given the monopoly on terminal services “have not made the right investments to make sure that our ports are effective, efficient and productive”.
“It can’t just be a witch-hunt on the people who run the ships as there are other parties involved,” he said.
“PNG Ports also started to hit everybody up with storage fees saying that this would lead to efficiencies.
“About 70 per cent or more of their revenue comes from their storage fees and they have collected plenty of money but they have not increased efficiencies.”