Trade disruption costly: CEO

ANY trade disruption to East-West trade has a ripple effect on smaller Pacific Island trades including Papua New Guinea, according to the International Container Services Inc (ICTSI) South Pacific.
Chief executive officer Robert Maxwell said the current supply chain disruptions experienced by businesses was a result of the Coronavirus (Covid-19) breakout in China which strongly impacted the main East-West trading such as the Transpacific, Far East-Europe and Transatlantic trade.
“Basically, this disruption translated into an imbalanced supply and demand (driven by a less service consumption and more goods consumption by companies and individuals during quarantine stage) that brought freight cost up significantly,” Maxwell said.
“Usually, any disruption in these trades has a ripple effect on smaller Pacific Island islands, including PNG.”
He said since its inception, the ICTSI South Pacific commitment was to facilitate international trade in the country by ensuring smooth and efficient flows in and out of PNG terminals.
“Hence, ensure the cost in the overall supply chain does not spike specifically because of our operations.
“In fact, PNG Ports Corporation contracted an independent Australian third party (FTI Consulting) to conduct a study on the PNG supply chain.
The report on such study which was shared with the Lae and Port Moresby chambers of commerce, Customs and other key stakeholders shows that the ICTSI represents only seven per cent of the total cost of a container in the overall PNG supply chain. He also clarified that wharfage was not charged by ICTSI but by PNG Ports to shipping lines which then may or may not pass the charge on to exporters and importers.”