Spike In Haitian Customs Rates Hurt Miami River Shippers
Written by Shearon Roberts on June 12, 2008
By Shearon Roberts
Miami River companies that ship to Haiti hoped to rebound from slow business and revenue losses earlier this year due to port holdups, only to resurface from one problem and sail head on into another.
Customs rates for imports on the island have doubled with the price of goods and transportation costs have spiked because of fuel prices, further aggravating what some of them call the worse downturn for business in decades.
The increase in custom taxes occurred as the Haitian government attempts to regulate its imports and eliminate side deals and impropriety where custom workers on the island got breaks to overlook custom fees on goods coming in. Now that the government has tamped down on the corruption, the true price of custom fees has shot up.
"It was done to make sure the customs duties in Haiti were collected properly and given to the right authorities," said Richard Dubin, vice president of Miami-based Haiti Shipping Lines. "So hopefully the government can spend that money in the country for the right improvements needed."
At a time of economic and social turmoil in Haiti, shipping to the Caribbean nation is a must. And many of these businesses in Miami are a lifeline to Haiti and have developed ties to the island nation. Those ties make it difficult for local shipping companies to simply pack up and do business elsewhere while revenue loss becomes commonplace as the global economy sours, especially on the island.
In 2007, trade revenues with Haiti from Miami totaled $783 million, according to the Jay Malina International Trade Center. Miami’s trade with Haiti ranks 29th among the Americas, the center says.
"The price of everything is going up and so has the value of goods," said Ralph Latortue, consul general for Haiti in Miami. "So the percent you pay to import goods will also go up."
Freight charges have increased over the first half of the year by 30% and custom fees have increased 50%, according to Munir Mourra, a Miami River terminal operator and chair of the Haitian-American Chamber of Commerce of Florida, based in Miami.
"On the island, the price of customs is a percent rate of the price of the goods," Mr. Mourra said. "Due to the fact that there is an increase in the cost of goods in the US, the taxes will increase significantly in proportion to that increase in goods in Haiti."
To assist getting goods into the island for food relief, Mr. Latortue, who works with Miami-Dade County and the Red Cross through an emergency relief committee, has tried to centralize efforts to ship aid to the island. The organization has placed containers at area churches as drop-off points for shipment coming up in the throughout the year. Miami Dade College separately collected about 131 boxes of non-perishable food items through a food drive at the end of May to assist Food for the Poor’s relief efforts on the island.
"We have the logistics in place to make sure that assistance gets to Haiti quickly and into the right hands," said Angel Aloma, executive director of Food For The Poor, based in Coconut Creek, which has warehouses to store goods and a feeding center on the island that serves some 20,000 Haitians daily. "Every shipment of food we send will save lives."
Food for the Poor was able to get its shipment out to Haiti last week, but Mr. Latortue is urging relief groups to pool their efforts to ensure that goods for humanitarian aid get to the victims and aren’t subjected to the ongoing custom and regulation holdups.
"We want to have it centrally organized and have one entity coordinating all this relief effort," Mr. Latortue said. "We’re having a tremendous response from all the communities, and whether it’s through a non-governmental agency or not, at the same time we need to work with the government to make sure it gets in."
On the other hand, business with the island has still taken a hit. Some terminal operators and service industries say it’s the longest period of slow business they have met in years.
"You don’t have as many people trading now and since then, the food prices have gone through the roof, fuel prices have gone through the roof," Mr. Dubin said, "Business has definitely gone down because of those factors."
Two of the three shipping companies that operated out of Miami Trading and Brokers’ terminals have gone out of business or closed down.
"We’ve never been through a crisis like this," said Albert Rodriguez, who has owned and run the terminals for 15 years. "I know there are mortgages to be paid on this river and the revenue just is not there."
Mr. Rodriguez said that slow business for this shipping industry has spread to truck drivers who cannot even afford the cost of fuel to move cargo and that businesses on the river are struggling to find reliable ground transportation as well.
"There are no ships coming, there is no work, everybody’s just sitting around," Mr. Rodriguez said. He said the economy and high gas prices have prompted many of the businesses to close.
Steve Johnson, the owner of Shoreline, owns and runs a fueling company that services the vessels shipping to Haiti. He said that once the new regulations in Haiti were introduced and the taxes increased enormously, he saw a decrease in business from selling roughly 350,000 to 450,000 gallons of fuel a month in October 2007 to 40,000 to 60,000 gallons this past month. Mr. Johnson said that the regulations and higher taxes triggered the decline in trips to Haiti and then the weak economy compounded the problem, raising the price of goods and fuel. He said shipping to Haiti has declined about 80%.
"It paralyzed the shipping industry on the river," Mr. Johnson said. "I’ve been doing this for 20 years on the river and the river business has gone up and down, up and down, but it has never stayed down for this long. I don’t have a crystal ball for when things will get better."
Some businesses owners say they will continue to ship to Haiti even as costs go up, planning to stick it out while factors from all sides threaten to put them out of business. As long as people have a need to ship to the island, Mr. Mourra said, some of the businesses keep doing it.
"Yes, taxation has actually doubled because the price of food has doubled. Yes, freight charges have increased because the price of fuel has gone up," said the Haitian-American Chamber’s Mr. Mourra, president of River Terminal Services. "The sad part is that people must now pay twice what it costs to ship an item whether it’s personal items or food items."