A proposed increase in wharf fees at Litzlitz Wharf in Malekula is raising concerns among domestic shipping operators, who warn that higher charges could add to shipping costs and eventually affect consumers.

Andrew Bohn, CEO of Ocean Logistics Limited and Chairman of the Vanuatu Shipping Association, told VBTC News that the increase in wharf fees was putting additional financial pressure on the domestic shipping fleet.

Mr Bohn said the association had received a notice from Malampa Province advising of an increase in fees at Litzlitz Wharf.

“We received a notice from Malampa Province saying that the fees for the wharf at Litzlitz have increased, and the increase is a big increase. I think it is more than 100%, and they have not given any reason.”

Mr Bohn said the higher charges were a concern, particularly where there had not been corresponding investment in basic wharf infrastructure and facilities.

Impact on freight costs

The shipping industry says increased wharf fees can have a direct effect on the cost of transporting goods between islands.

Mr Bohn said shipping companies would not simply absorb significant increases in operating costs, meaning the additional expense could eventually be reflected in freight rates.

“When the fees increase, the shipping company just doesn’t absorb that fee. It doesn’t just come out of the profit; they’re going to add that to the freight rate,” he said.

Higher freight rates could then contribute to increased prices for goods transported to islands, potentially placing additional pressure on consumers.

Call for more discussion

The Vanuatu Shipping Association is calling for greater discussion between shipping operators and authorities over wharf fees, charges and investment in maritime infrastructure.

Mr Bohn said there would be a different justification for higher fees if the additional revenue was being used to improve wharf facilities and services.

“They want to do improvements to the wharf, then that’s a different story. They want to raise revenue to reinvest inside the wharf and provide some service like traffic management or security or light, but as far as I know, the provinces are looking to raise revenue,” he said.

The association says further discussion is needed to understand the reasons behind the increases and how the additional revenue will be used.

A report received by VBTC News from the Malampa provincial administration states that the matter has not yet been decided by the council and the proposed increase has not yet been implemented.