Study dampens transshipment plan for CNMI ports

A financial study on the maritime division of the Commonwealth Ports Authority has warned against the use of seaport facilities in the CNMI for transshipment of fish because it will not become a huge source of revenue for the agency.

At the same time, the study conducted by Booz Allen & Hamilton revealed that Saipan Seaport cannot be a mainline transshipment hub similar to Kingston or Freeport. Based on the six factors that would ensure the success of trans-shipment hubs, namely, high loading/unloading productivity, proximity to origins or destinations, low cost labor, deep water, ability to match trade lanes, the study gave Saipan Seaport a very low rating.

Although the primary fishing waters are far south of the CNMI’s 200 mile economic zone, the study conducted by Booz Allen & Hamilton showed there may be some opportunity to transship fresh or frozen tuna in the CNMI, taking advantage of the short distance that would allow the immediate airlifting to the Japanese market.

According to the study, an aggressive program may handle 150 boat loads of 15-20 tons per month, bringing less than $3,500 in wharfage revenue to the seaport every month.

With the exception of garment exports, at least 83 percent of the cargo handled at the port of Saipan is imported. This include finished petroleum products such as diesel fuel, jet fuel and unleaded fuel represent the largest single commodity handled at the port.

The study noted that manufactured garments moved in containers are the only significant exports of the CNMI. In 1997, the garment industry’s total revenue amounted to $800 million.

Saipan has a very imbalanced container trade, reflecting its position as primarily a consumer of goods while imports which come from various sources. Exports are primarily trans-shipped via Guam to the U.S. at a significant premium.

Records in fiscal year 1998 showed that containers bound for Saipan is nearly three times as many than originating from the CNMI. While inbound cargo comes from a variety of locations to supply local consumption, tourists and garment production, the vast majority of exports, mainly finished garments, are trans-shipped to the U.S. via Guam.

As a result of inefficiencies and lack of scale, cost of carriers is high specifically those coming to Saipan. For example, Sealand’s ocean freight rate for grocery items to Saipan from the U.S. West Coast is over 30 percent higher than those bound for Guam.