By NEIL HARTNELL
TRIBUNE Business Editor
nhartnell@tribunemedia.net
ELEUTHERA’S Chamber of Commerce president is warning that “a lot of people are deciding if they will stay in business” because ever-increasing costs, taxation and regulations mean it “doesn’t make sense any more”.
Thomas Sands, speaking in the wake of Tropical Shipping’s move to increase freight rates to The Bahamas from the US and Canada by largely 11.1 percent across the board, said the impact from such hikes is worsened for Family Islands like Eleuthera because of the additional distance and time involved in shipping goods to them.
With this set to provoke “increased costs across the board”, and gas prices on Eleuthera now over $8 per gallon, he told Tribune Business that the island’s businesses - and others outside Nassau - face a “crazy reality” where all costs are surging and margins are insufficient to absorb them.
As a result, Mr Sands said he is hearing from many in the business and entrepreneurial community that they have reached “a point where they just can’t make it” and are now considering the future of their enterprises and whether they will remain open.
The Eleuthera Chamber chief added that, unlike their New Providence counterparts, Family Island businesses lack the same access to resources for quick repairs and maintenance, forcing them to maintain back-up inventories and systems that further add to their expense base.
And, in the case of shipping, costs are already higher than in the capital because of goods having to undergo an extra journey through being transported to Nassau first, then moved on to their Family Island destination.
Tropical Shipping is among the main ocean freight providers to The Bahamas on routes from Florida, other US and Canadian ports, and it is set to increase its bunker surcharge with effect from November 8, 2026, to compensate for higher global fuel and oil prices.
It is poised for 20 and 40-foot refrigerated containers by $40 and $80 in just under three weeks - from $360 to $400 for the former, and $720 to $800 for the latter. Both represent 11.1 percent rises, but Mr Sands and others say it is far from the only shipping company having made or planning such a move.
“I think the domestic rates have increased. The rates into Nassau and the domestic rates have increased,” Mr Sands told this newspaper. “The end result is increased costs across the board. Gasoline is well over $8 per gallon now. It’s crazy but that’s the reality. What can I say? It’s real. It is real.
“We have no other choice. Everybody has no choice,” he added of increased consumer prices. “I don’t know what to say. The reality is, across the board, all costs are increasing. This thing with the adjustment in how we treat VAT after the removal of the 5 percent [on uncooked food items], that’s a pass-on to expenses. There’s just no other way to explain it to the customers.
“Reality is, it’s here. A lot of people are deciding if they stay in business. Between the change in taxation, increase in costs, increase in regulations, some are giving up. They just can’t see it making any sense. I’m hearing it from a lot of people who have been in business for a lot of years.
“Some of them have moved to the island years ago. It’s got to a point where they just cannot make it; it makes no sense any more. It’s a very difficult environment to work in, and it’s magnified in the Family Islands where we don’t have the resources down the street to support your business and maintain it,” Mr Sands explained.
“You have to have many back-up systems just to operate. It has a material effect. Traffic, although growing into islands like this, is still a lot less than you would have in the city. It’s a tough environment, it’s a tough time, and margins are not large enough to compensate for all the operating costs and regulations.”
Ben Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business that end-consumers are the ones who will “feel the pinch” from spiralling shipping costs and fuel price hikes while adding that expense increases have effectively become a new normal for the private sector since the COVID-19 pandemic.
“It’s not going to affect me very much, but we are seeing that increase, the fuel, from all the shipping companies,” he said. “It’s concerning because the end consumers are going to feel the pinch and it’s going to drive the prices up. We’ve seen it happen for quite a while due to the logistics of fuel increases.
“I’m seeing signs it [the latest fuel hike] could be short-lived but, when the shipping companies increase their rates, it takes much longer… I don’t know they even come back down again. In theory, I’m hoping it will be short-lived. All in a day’s work. We’re seeing other things increase because of fuel prices, such as inland freight.
“It’s always a concern whenever prices increase, but it’s not something that’s being done in a disruptive state, where one group’s getting an advantage over another industry. It’s across the board. Since COVID it’s just like one thing after another. Nothing is a surprise.”
Mr Albury, who is also Bahamas Bus and Truck’s general manager, said of the shipping cost rise: “It didn’t just start. It’s just been creeping and creeping. We got a quote the other day, and I had to e-mail back checking it was not a typo.
“We are doing what we can on our end to keep costs down as much as we can. I’m looking at ways to increase my shipping, having larger shipments and shipping things together.
“We are looking at other shipping methods. Roll on, roll off is more expensive, but we’ve been looking at containerised shipments. We are having shortages of space [on ships], so we are looking at things to combat that. It’s one of those things. You get to work, see this stuff going on, and it’s just like you have to roll with it.
“I’m more concerned with the effect it will have on necessities and a lot of different things consumers are going to need,” Mr Albury added. “That’s what stands out to me. Cars, we get an increase here and there, but they can be absorbed to some degree because we are not an inexpensive product.
“We were just getting back from market shortages. There always seems to be something that, as soon as we get something good going, something comes along to ruin it.”