... effective June 15, 2006.

2006, June 2: Reports out of Jamaica from various sources are that the Kingston Container Terminal is congested, with all berths occupied and ships waiting for days to discharge cargo.

Congestion in Kingston has prompted the shipping lines which transit the Atlantic to and from Jamaica, The Association of West India Trans-Atlantic Steam Ship Lines (WITASS) to reintroduce a congestion surcharge.

The WITASS Lines, including Hamburg-Sud, Hapag-Lloyd, CSAV and CMA-CGM, has advised customers of their intention to reintroduce the surcharge because of the hectic situation at the port.

A statement on the WITASS website dated May 11, 2006, read:

Congestion Surcharge Jamaica

The Member Lines of WITASS refer customers to their press notice of 25th February 2005, confirming the cancellation to the Congestion Surcharge in Jamaica.

The Lines have continued to monitor the situation in Kingston and have to advise that, as a result of increasing delays and disruption to their schedules resulting in extra costs to them, they have decided to reintroduce the Congestion Surcharge in Jamaica with effect from 15th June 2006 at the following levels:

Euro denominated rates: Euro 121 / 242 per 20'/40'

US $ denominated rates: US$ 146 / 292 per 20'/40'

The port situation will be kept under review and the surcharge will be withdrawn when the port returns to normal working conditions.

A notice issued to WITASS customers in Jamaica said: "The lines have continued to monitor the situation in Kingston and have to advise that, as a result of increasing delays and disruption to their schedules, they have decided to reintroduce the Port Congestion Surcharge in Jamaica."

According to Jamaican newspapers, Graham McAllen, Managing Director of Hapag-Lloyd (JA) Limited, the leading WITASS line in Jamaica, said they are seriously affected by the congestion and have had to divert ships and omit other port calls in order to make up the schedule. He was reported as saying that one third of the business bound for Jamaica was now being brought in by feeder ships, while the greater portion was forced to wait. As a result, customers were reportedly receiving their goods eight to 14 days late.

However, according to the Gleaner newspaper, Noel Hylton, chairman and chief executive officer of the Port Authority of Jamaica, denies WITASS' claims of disruptions at the port. He was supported by the Minister of Government who has responsibility for the port.

"The present level of congestion in Kingston should not cause the lines to impose a surcharge," Minister Bobby Pickersgill stated in a news release.

The Hapag-Lloyd representative (Mr. McAllen) reportedly responded: "That's their opinion! We are incurring a cost because of the congestion and we have to have that recompensed."

Previously, on April 26, 2006 WITASS posted the following on their website:

Terminal Handling Charges – Jamaica

The Member Lines of WITASS give notice to the trade that Terminal Handling Charges in Jamaica will increase to the following levels:

Import: US$218 per container

Export: US$176 per container

with effect from vessels commencing to load after 1st June 2006.

These increases are necessary to offset the ongoing disbursements that Lines incur in Kingston due to CESS charges.

Trevor Riley, General Manager of the Shipping Association of Jamaica explained that the cess (a fee charged by the Association), which is US$54 per container imported and US$12 per container exported, is used to finance employee benefits such as vacation leave and health insurance. He was reported as saying that the cess had been reduced five times since 1997, the last time in February 2004, when it was reduced by approximately 50 per cent.

Meanwhile, it was being argued in shipping circles in Jamaica that the state of congestion which triggered action by WITASS to impose the congestion surcharge came about because the port of Kingston was not ready for the five-year deal (valued at US$210 million ) it signed with Maersk Shipping Line in November 2005. This arrangement became effective in March this year.

Minister Pickersgill reportedly conceded that the waiting time for vessels had increased to an average of three to four days since the signing of the Maersk deal.