By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior Bahamian hotelier is urging “government intervention” to prevent soaring food, beverage and other input costs that will result from US plans to impose up to $1.5m port call fees on Chinese-made ships.

Robert Sands, a senior Baha Mar executive and immediate past Bahamas Hotel and Tourism Association (BHTA) president, told Tribune Business that the levy proposed by the US Trade Representative’s Office is “certainly a concern” for the local resort industry given that at least 70-80 percent of its food and beverage needs alone are supplied from the US.

“There’s no question that particular issue will require intervention not only from the private sector but the Government of The Bahamas,” he said in a recent interview, “recognising the fact that the vast majority of our food items come from North America and on ships that are not built in North America.

“It’s certainly a concern, and we are hoping the efforts being done both by private sector stakeholders and the Government of The Bahamas will result in some type of arrangement that is positive for The Bahamas, our friendly neighbour in the US and the whole country.”

While local and global attention has in recent days been consumed by Donald Trump’s decision to shred the long-standing global commerce and trade order via the imposition of tariffs on all goods that the US imports from other countries, and the subsequent economic fall-out and threat of retaliatory tariffs from other nations, the danger posed by the Chinese-made ship fee proposal has not gone away.

Tropical Shipping, one of the major freight carriers serving The Bahamas, and especially the New Providence and Abaco markets, has already warned that the plan could place its very survival and commercial viability at stake given that nine of its vessels - a major portion of its fleet - are Chinese-made. And the US Trade Representative’s Office is due to make a “ruling” on the proposal on April 17 - just over a week away.

The Caribbean Hotel and Tourism Association (CHTA), which includes the BHTA among its 32 members, warned in an April 1, 2025, letter to the US Trade Representative’s Office that the proposed fee scheme would “erode years of progress in trade and travel” to the detriment of the region’s tourism-dependent economies such as The Bahamas.

Revealing that more than one-third of the region’s tourism businesses suffered a loss in 2024, Sanovnik Destang, the CHTA’s president, wrote: “Should the proposed actions being considered be adopted, along with tariffs, without remedies which mitigate their impact, we expect downside consequences for the region and US business interests which rely on a stable and growing tourism industry – both cruise ship and land-based tourism.”

To further its case, the CHTA wrote: “Despite the Caribbean’s tourism growth, the industry is highly vulnerable to threats impacting travel demand and an already comparatively high cost of doing business. Recent industry research reveals that 34 percent of tourism-related businesses report experiencing a net loss in 2024.....

“An unintended consequence of a proposal by the US government to impose high port service fees on all maritime operators, regardless of nationality, of up to $1.5m for each port call in the US made by a Chinese-built ship, and to require that exporters of US goods use US-flagged and US-built vessels for an increasing percentage of their exports would have corresponding negative consequences for US-based shippers and suppliers.

“Combined with the potential imposition of tariffs, this would substantially increase the cost of travel to the Caribbean, reducing demand and eroding years of progress in trade and travel which has been made to the benefit of both the Caribbean and the US.”

Asserting that the proposed port fees “can have a devastating impact” on the Caribbean’s tourism-dependent economies, the CHTA said food and beverages for guests “represent tourism’s highest input costs with an estimated 70 percent to 80 percent coming via maritime shipping from the US”.

It added: “The Caribbean is already one of the highest cost travel destinations in the world. Layering additional input costs through higher costs for imports will negatively impact tourism-dependent revenue and employment in the US and the Caribbean

“Higher operating costs fuelled by five years of inflation are impacting profitability with 34 percent of Caribbean tourism-related businesses reporting operating at a net loss in 2024. Higher costs will contribute to business failures and lower imports to the region....

“Fifty percent of Caribbean-based hotels and tourism-related businesses reported intentions to increase capital expenditures in 2025 with most purchases coming via the United States.” Separate and apart from the Chinese-made ship port fee, the CHTA said Mr Trump’s tariffs will reduce consumers’ disposable income and lower travel demand, leading to “declining profit margins and business closures” in the tourism sector.

Meanwhile, Tim Martin, Tropical Shipping’s president and chief executive, wrote in post-public consultation feedback to the US Trade Representative’s Office that the proposed fee will “cause irrevocable damage to American-owned and controlled shipping carriers” such as itself if implemented in its current form.

“Tropical was asked to ‘walk us through the numbers for the smaller vessels’ in this post-hearing submission,” Mr Martin wrote. “As we explained in our public comment, the average size vessel serving the Caribbean carries 1,100 nominal TEUs (twenty-foot equivalent units or containers).

“In comparison, the average steamship line’s vessels calling on major US ports and operating in global trade routes are approximately 16,000 nominal TEUs. The typical loaded TEUs on the vessels serving the Caribbean are approximately 850 TEUs per vessel.

“The fees per entrance of a vessel to a US port as set out in the proposed action, if applied to vessels of this size, would almost double current freight rates in the region with an average freight increase of approximately $2,500 per 40-foot container,’ Mr Martin reiterated.

“As a comparison, if you applied the proposed $1m fee to a vessel that calls on a single US port directly from China carrying 16,000 nominal TEUs, it would increase the cost per 40-foot container by only $125. Many witnesses highlighted the disproportionate and crippling impact the proposed action would have on smaller or specialty vessels typically operating short sea routes.”

Mr Martin added: “The evidence in the record is overwhelming. Vessels below 55,000 dead weight tons, which is approximately 3,750 TEUs, should be exempted from the Chinese-built service fee imposed on non-Chinese-operated fleets that include Chinese-built vessels.

“This would address the concerns of Tropical and other US-owned and controlled carriers, as well as many other specialty vessel and short sea route operators. The alternative would be catastrophic for these operators, including Tropical, as we heard at the hearing.”