Inbound, outbound cargo decline

The volume of cargo being shipped into and out of the CNMI by the local garment industry has decreased in the first seven months of fiscal year 2005 as a result of recent factory closures and downsizing.

The Commonwealth Ports Authority reported that inbound garment cargo reached only 74,510 tons from October 2004 to April 2005, a decline of 16 percent as compared to the same period last year.

Outbound garment cargo posted a 9-percent decrease, as it totaled only 9,299 tons in the first seven months of FY 2005.

Three garment factories have ceased operations on Saipan since the Jan. 1 lifting of trade quotas on the textile industry. These companies are Sako Corp., Mariana Fashions Inc., and La Mode (Saipan) Inc.

The decline in garment shipments caused a corresponding decrease in the overall volume of inbound and outbound cargo processed at CNMI seaports.

According to CPA, the total inbound cargo reached only 262,536 tons, down by 6 percent as compared with the first seven months of FY 2004.

Likewise, the total outbound cargo posted a 12-percent reduction after it added up to only 75,371 tons.

Nevertheless, the CPA seaport division generated revenues of $4.05 million in the first seven months of the current fiscal year. The 21-percent growth was mainly due to wharfage revenue from fuel shipments, CPA said.

The seaports also registered a 22-percent increase in net income, which amounted to $2.86 million in the first seven months of the year.

This happened despite an 18-percent increase in operating expenses caused by a $198,788-rise in insurance premiums.

The recent implementation of a 5-percent salary hike for CPA employees also caused a $47,589-increase in personnel costs.

The CPA board and management’s travel costs, however, went down by 88 percent and 27 percent, respectively. The combined travel expenses reached only $8,046 from October 2004 to April 2005, from $18,319 in the same period last year.

CPA said that the growth in the seaports’ net income enabled the ports authority to comply with its bondholder’s bond ration requirement.

The authority also stressed that $1.49 million of the net income would be used for bond payments while $485,333 would go to payments to the Commonwealth Development Authority.

The remaining $886,459 is being reserved for bond liquidity.