Hurting the bottom line: Delays from dock strike have impact on business
As the strike in Costa Rica’s Caribbean port city of Limón stretched into its tenth day, importers and exporters are struggling to meet their obligations to customers, according to several sources consulted by The Tico Times. Despite the port remaining open, the ongoing strike has created an administrative backlog that has delayed some shipments by as much as 72 hours.
The National Police expelled striking longshoremen from the docks in Limón and Moín on the evening of Oct. 22. The docks reopened Oct. 23 with contract labor, but businesses have complained that understaffed facilities have caused expensive delays at the port. Police have remained on site to ensure the docks’ continued operation. The government’s latest offer to the dockworkers union was rejected Friday morning as a court ruled the strike illegal.
“The government’s position is that the docks are open again but they’re not at 100 percent,” said Katherinna Chávez, executive director of CRECEX, an organization that represents importers and exporters. Importers have contracts that demand goods be delivered on time or face steep fines.
“When you don’t make a delivery on time you need to pay the buyer a fine for every day you’re late,” Chávez said. The CRECEX director said the fines are often significant enough to eliminate a business’ profits for a given deal.
Chávez said that the $1 billion APM Terminals project in Moín was “urgent” for the businesses she represents. She said that poor port infrastructure is an ongoing threat to Costa Rica’s competitiveness and the health of the importing sector of the economy.
The country’s ports have been ranked among the worst in Latin America and 115th out of 144 worldwide, according to the latest survey from the World Economic Forum. The docks in Limón handle roughly 80 percent of Costa Rica’s foreign trade every year.
The Tico Times reached out several times to the Atlantic Port Authority, JAPDEVA, for comment but did not receive a response by deadline.
Randall Serrano, general manager of Veromatic, a company that imports equipment for hotels and restaurants, told The Tico Times that when the ports were operating at full capacity, a delivery could dock, unload and clear customs in time to reach San José the same day. One shipment this week that arrived on Monday did not reach the capital until Thursday, Serrano said.
The general manager said that he received letters from the trucking company that delivers his products saying the delays were out of their hands. Serrano has been forced to ask for exceptions from his customers to try to avoid fines.
“We’re waiting for another shipment next Monday, we’ll have to see what happens next week,” Serrano said.
Leaders from the dockworkers union, SINTRAJAP, rejected the government’s $760 million proposal Friday morning, pushing the strike into it’s second week. Ronaldo Blear, SINTRAJAP’s general secretary, told TV’s Channel 7 News that the ruling would not intimidate the strikers, and that they would appeal it on Monday.
President Luis Guillermo Solís said he is satisfied with the court’s ruling. Solís has maintained since the beginning of the dispute with SINTRAJAP that the strike is unjustified, and breaking a government concession contract with APM – one of the most experienced port builders and operators in the world – would send a bad message to foreign companies considering doing business with Costa Rica.
UCCAEP, a chamber that represents 40 major businesses here, released a statement Friday saying it is pleased with the court’s ruling and applauded President Solís’ resolve to not renegotiate the concession with APM Terminals.
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