By  on September 19, 1994

WASHINGTON -- Competition in the southern Florida transportation arena seems to be keeping already steep apparel shipping costs in the Caribbean in check, although there is some concern prices could edge up, according to industry officials.

"You can get a box from Hong Kong to L.A. cheaper than a box from Honduras to Miami," said Robert Rowan, corporate traffic manager, Wrangler Inc., a VF Corp. division. Wrangler has one factory in Costa Rica and two in Honduras where apparel is assembled from U.S.-made-and-cut textiles.

But Rowan and others in the industry note that this imbalance isn't likely to reverse, since the economies of scale seen in the Far East aren't present in the Caribbean, where, for example, small ships a tenth the size of the trans-Pacific fleet are the rule in the harbors of the Caribbean.

Added costs are already appearing on the horizon, but how widespread they will be remains to be seen.

To combat costs due to increased theft at the Guatemala port, the carriers will begin levying a $200-per-container charge, while in Honduras $300 surcharge has been scheduled for costs arising from port congestion. Both surcharges are scheduled to go into effect Jan. 1, 1995. These charges are being instituted by the Latin America Steamship Association, a group of ocean carriers, known as a conference. When shipper groups are defined as a conference, they have antitrust exemption to set rates.

LASA, formed in March, represents the principal ocean carriers sailing from southern Florida's three ports.

"The conference does have an effect on rates. There's no doubt about it," said Thomas G. Travis, of Sandler, Travis & Rosenberg, a Miami attorney specializing in apparel assembly trade.

For future leverage against the conference, some apparel concerns are considering forming their own association to flex their bulk-purchasing power, Travis said.

Apparel shippers, too, can turn to non-conference carriers in search of lower rates, he pointed out.

Nevertheless, officials in the apparel shipping industry claim the base rate, for both conference and independent carriers, for most Caribbean Basin ports remains competitive. They quote a $2,000-per-40-foot-container price as the average one-way fee. What's keeping prices stable in recent years is the increase in volume and competition among ocean, as well as air, carriers, they say.

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