Fee hikes by largest marine cargo firm may drive up consumer prices, hinder access to goods
By The Star Staff
The marine support services and stevedoring terminal operator Luis Ayala Colón Sucrs Inc., the leading maritime cargo shipping agent in Puerto Rico, has raised its fees for cargo handling effective March 1, a move that could hike prices and hinder access to products on the island, experts say.
The decision comes at a time when U.S. President Joe Biden and key Democratic leaders in Congress have expressed support for the Jones Act, which local economists and businesses have blamed for the high cost of living in Puerto Rico, as it restricts the ships that can bring goods to the island to U.S.-flagged vessels. Congress recently passed the National Defense Authorization Act, which contains language that significantly restricts the president’s ability to waive the law. It also comes as other sectors of the transportation industry are raising costs to consumers and adding charges. For instance, JetBlue airline is eliminating allowing people to check one piece of luggage for free starting in July.
“Maritime transportation in Puerto Rico is controlled by oligopolies,” noted economist José Caraballo Cueto via Twitter. “That is the cause of our high cost of living and it is not going to be resolved by raising the minimum wage.”
Luis Ayala Colón signed an agreement with Puerto Rico Terminals to create the joint venture Puerto Nuevo Terminals (PNT), which raised concerns from the U.S. Justice Department because it appeared to be a merger of two maritime companies to operate a marine terminal and provide container stevedoring, terminal and related services in the Port of San Juan. The Federal Maritime Commission reiterated that it did not authorize a merger, but officials worry about the lack of competition because Puerto Nuevo Terminals, according to a source, hires Luis Ayala Colón for stevedoring services.
Carlos C. Sánchez Ortiz, president of the International Longshoremen’s Association (ILA) Local 1740, said the union has warned for years about the concentration of power in a few companies without government supervision.
“This corporate framework involves risks that must be avoided at all costs, since they will inescapably increase the costs of all consumer goods, services and even border on risk to national security,” he said.
A sample of this, Sánchez Ortiz said, are the documents that the company published at the end of January to advertise numerous increases in the costs of loading and unloading merchandise at the docks.
“These costs will be passed on to the consumer,” he said.
According to a Luis Ayala Colón document, effective March 1, 2021 there will be new terminal tariff at the company’s San Juan Terminal facility for all consignees, shippers and owners receiving and delivering equipment for all lines. The company is raising its terminal maintenance fee to $25 per full unit from the current $15 per full unit, a hike of almost 65%.
It also raised a Terminal Security Fee to $17.50 per full unit from $10 per full unit, along with additional charges. For instance, it imposed a gate charge not covered by the stevedoring/terminal contract of $45 per gate move, a mount & discharge picks per unit charge of $35, an inspection of containers charge of $90 per inspection, and sold unit handling charges of $160.
To keep the terminal on overtime from 4-6 p.m. Monday to Friday, there will be a $400 charge per hour. On Saturdays and holidays, the charge could be $1,600 per hour.
A source close to the process told the STAR that truckers met recently with members of the ILA, the union that represents dock workers, because of concerns about the higher fees, more specifically the $45 charge per gate move for truckers who do not rent chassis because they have their own.
Luis Ayala Colón represents or handles cargo for Shell, Petrobras fuel company, and Gas Natural. It has about 1,095 workers.
Sánchez Ortiz also raised concerns about the impact on dock workers because, he said, the cooperative that created Puerto Nuevo Terminal establishes the framework that would allow Luis Ayala Colón to ignore the collective bargaining agreement. The document says, in its Article 4.2 that PNT, as a result of discussions and agreements with Luis Ayala Colón itself, may “[d]irectly or through contractors, hire labor, including unionized personnel, for their operations.”
The source said that while Luis Ayala Colón is raising fees, it is not giving any benefits to workers.
An immediate reaction from Luis Ayala Colón could not be obtained by press time.