WTO Should Regulate Shipping Lines, Towler Tells
“A 40-foot container of foam out of Asia costs $7853. The same container cost $17,400 this year in March, and in August, $21,700.
Amanufacturing and export company has suggested the intervention of the World Trade Organisation, to regulate freight rates imposed by international shipping lines.
Performance Flotation Development managing director, Mike Towler, made the call at Shangri-La Yanuca Island, where Fiji Commerce and Employers Federation hosted the Top Executive Conference 2022.
He likened international shipping lines to pirates and Vikings, who plundered the coastlines to deposit some of that DNA in local populations.
Mr Towler, a fearless business leader who described himself as an optimist, said the high cost of international shipping freight was owed to the lack of regulations. “We’re able to regulate airlines. “WTO is able to regulate shipping lines for the price gouging that is going on.”
PRICE GOUGING
Mr Towler warned that the end of the manufacturing industry was near if price gouging was not addressed immediately.
“Shipping and the freight they carry is the life blood for small island states like Fiji,” Mr Towler said.
“Without it ,we are doomed. “Without it at reasonable prices, we are also doomed.”
Mr Towler said 80 per cent of the world’s shipping lines were dominated by five major companies, several of whom had origins dating back over 300 years.
“In those days, we didn’t call them shipping lines, they were called pirates,” he said.
“Piracy is in their DNA.
“When there are events like a pandemic, and the world is in a very vulnerable state, the opportunity for that piracy DNA to float back to the surface is rampant.”
One of these shipping lines had its origins much more than 300 years ago, he said.
“I think it was 1000 years ago when they were called Vikings,” Mr Towler said.
“If it is not, it is certainly price gouging of the highest order.”
Mr Towler’s Nabua-based textile factory manufactures lifejackets for export, and related rescue equipment.
He does not mince his words when it comes to the escalating freight rates charged by shipping lines, or issues compounding the textile, clothing and footwear industry.
In 2021, his company paid $4500 for a door-to-door delivery of a 40-foot container of foam, from Brisbane.
In August 2022, Performance Flotation paid over $16,000 for the same, marking an interest of nearly 400 per cent.
“A 40-foot container of foam out of Asia costs $7853,” he said.
The same container cost $17,400 this year in March, and in August, $21,700.
RECESSION
On another note, Mr Towler said Australia and Fiji would not experience a recession, given forecasts of global contraction.
He said Australia and New Zealand would experience a large downturn in domestic demand brought about by their increasing higher interest rates and higher prices for just about everything else, from the basics like food, and other necessities such as insurance.
In turn, it will affect Fiji in both manufacturing and tourism.
“The discretionary spending dollar in those two countries will be in short supply early next year,” Mr Towler said.
“We need to be prepared, tighten our belts, and preserve our available cash for a tough 2023.” Mr Towler was the first vocal and local employer to implement in unwavering fashion, a NO JAB, NO JOB policy at his Suva factory, a move that gained international media attention, and garnered local support.
His steadfast efforts in the business sector has made him a natural trendsetter, as many employers soon adopted the same stance on NO JAB, NO JOB policy in the workforce, at the height of the COVID-19 pandemic.
In more ways than one, Mr Towler has shown himself to be ahead of his time in the business arena. He was among top mentions of 2021 business leaders in SunBiz’s annual choice.
Mr Towler, a Fijian passport holder, was until recently, president of the Textile Clothing and Footwear Council, a role he resigned from citing medical reasons.