More expensive days ahead

Consumers will ultimately bear the brunt of the decrease in volume of outbound cargo resulting from the current situation of the local garment industry, according to the Commonwealth Ports Authority.

CPA executive director Carlos Salas noted that the 4-percent drop in total cargo processed at the Port of Saipan was caused mainly by the decreased volume of outbound cargo.

“The dwindling volume of outbound cargo will have a major impact on the cost of goods being brought into the CNMI,” he said.

He explained that previously, garment companies shipping their products to the United States paid for the vessels’ return trip to the mainland. Without the garment cargo, shipping companies would be forced to structure their fee so they could recover the cost of the return trip.

“Ultimately, that added cost will be passed on to the consumers,” Salas said.

CPA data showed that the total cargo processed at the Port of Saipan reached 240,562 tons only during the first five months of fiscal year 2005, a 4-percent decrease compared with the same period last year.

The volume of inbound cargo decreased by 2 percent or 4,699 tons, while that of outbound cargo dropped by 8 percent or 4,765 tons.

Statistics also indicated that almost 80 percent of the 9,465-ton difference in the total cargo volume was registered from January to February 2005.

The total cargo volume dipped by almost 2,000 tons from October to December 2004, compared with the same period in 2003. The combined volume of inbound and outbound cargo, however, further decreased during the two months that followed, sliding by almost 7,500 tons.

Beginning Jan. 1, 2005, the World Trade Organization lifted quota restrictions that limited garment exports from foreign countries.

In an earlier interview, Salas said imports and exports by the local garment industry make up about half of the total cargo being processed at the Saipan seaport.

He noted that the drop in the cargo volume is partly a result of the current garment industry situation. He added, however, that it may be premature to determine the extent that the pullout of garment companies is affecting CPA.

“Definitely, we will see a decrease in revenues, with the ongoing movement of garment manufacturers to other places like China. But right now, it’s kind of too early to tell exactly how much of the decrease in cargo is representing garment cargo,” Salas said.