Interview: Ashley Taylor
What impact did foreign exchange (forex) variations have on Trinidad and Tobago’s export market?
ASHLEY TAYLOR: These variations mainly stem from the challenge of foreign currency availability, which was largely brought about by the downturn in international oil prices. The issue was then exacerbated by T&T’s falling hydrocarbons production. As a result, the lack of forex reduced the ability of manufacturers to import raw materials, which in turn affected their ability to manufacture goods for subsequent export.
A partial solution to the problem is imminent, with the coming implementation of a currency adjustment factor for shipping lines. This is intended to mitigate forex risks and address the additional challenges that companies encounter when bringing money back to their territories. Importers and exporters that are unable to pay for goods in US dollars are now able to pay in T&T dollars with an additional 5% fee. These changes are relatively new, but they could have a significant impact on the competitiveness of exports.
How are shipping operators preparing for the International Maritime Organisation (IMO) 2020 rules?
TAYLOR: There are three common ways of preparing for the IMO 2020 sulphur cap. A number of vessels will be temporarily taken out of service to install “scrubbers” – devices that absorb some of the pollutants. The downside is that while this technology addresses the IMO’s air pollution requirements, the chemical by-product of this process could be harmful. Most vessels dispose of this water-based solution on the high seas, and this could become a major concern for the sustainability of marine life if it is not adequately addressed.
Alternative measures include retrofitting vessels to make them more fuel efficient. Newer vessels are now equipped with extremely efficient diesel engines. The third way is to simply pay the higher price for low sulphur fuel, which currently appears to be the most popular solution. All of these options will inevitably have an impact on operation costs moving forwards. However, it remains to be seen how much of the brunt of these costs will be passed on to the customer.
To what extent have advances in digitalisation alleviated verified gross mass issues?
TAYLOR: Balancing weight and ballast on-board a vessel is a critical safety issue on the high seas. Digitalisation is crucial not only in terms of addressing this issue, but also in terms of facilitating decision making and planning for shipping lines and their weights. If a single container is supposed to weigh 30 tonnes and the courier measures it as 29 tonnes, the resulting difference is insignificant. However, if every container on a large shipping vessel has a one-tonne inaccuracy, there could be over 300 tonnes of weight difference. Whereas in the past this would be a manual process, today trucks with containers arrive at the facility and the weight is automatically calculated and updated into the system.
In what ways can the local shipping industry leverage opportunities in Guyana?
TAYLOR: Opportunities in this country are currently constrained in terms of the use of supply vessels. As a result of Guyana’s location and its underdeveloped ports and siltation system, larger vessels have some difficulty in accessing the coastline. As production at oil wells comes on-line, there will be an increase in larger vessels docking at T&T to discharge before smaller supply vessels take equipment across to Guyana.
Although Guyanese operations are still rudimentary, there has been an uptick in the number of vessels passing through T&T. Furthermore, increasing economic growth and a rising demand for manufactured goods among residents and businesses in Guyana provides further opportunities for T&T. Our country already has a well-established manufacturing sector, while Guyana’s sector is still in its early stages. T&T will, therefore, be able to service Guyana’s needs as its economy expands.
Read More from OBG
