CPA posts lowest commodity traffic in 8 years

Total inbound commodities recorded last fiscal year was the lowest traffic reported for CNMI ports in the last eight years, based on records of the Commonwealth Ports Authority.

Saipan Tribune learned that a total of 706,351 revenue tons of various commodities and materials were loaded to the port in Fiscal Year 2000. In FY 2008, that number plunged to 389,338 tons—a hefty drop of 45 percent.

Between that eight-year period, CPA recorded 722,419 tons loaded at its ports in 2001; 673,131 in 2002; 648,250 in 2003; 673,653 in 2004; 642,584 in 2005; 553,269 in 2006; and 462,235 in 2007.

According to Saipan port manager MaryAnn Q. Lizama, one of the major contributing factors in the decline in commodities is the mass extraction of the garment industry.

“There is a huge disparity between last fiscal year and eight years ago…and a major drop in the garment commodity category,” she told Saipan Tribune.

The World Trade Organization liberalized trade and broke down trade barriers in January 2005, opening the United States to tariff-free garment exports from most countries. All of the CNMI’s garment manufacturers elected to leave the CNMI and move their operations to other countries where labor is cheaper.

Records show that the garment industry—and its raw material imports—were at its peak in 2000-2001 when it registered inbound figures of 202,893 revenue tons and 201,826 tons respectively.

In 2002, CPA recorded a significant drop in the garment delivery when only 183,375 revenue tons were received at the Saipan port; 162,389 in FY 2003; 161,800 in FY 2004; and only 123,758 tons in FY 2005.

The severe drop was evident also in the figure posted for garment materials in the succeeding years when it was down from 95,955 revenue tons in FY 2006 to a measly 62,173 tons in FY 2007.

The lowest ever recorded for the garment/material category was last fiscal year when only 21,772 revenue tons were accommodated at the island’s port.

In the 1990s, the CNMI was home to 34 garment factories, generating millions of dollars for the economy.

Early this year, the ports authority enforced a 90-percent increase in all tariff rates to avoid defaulting on its bond obligations.

“CPA floated a bond to give the Saipan dock an extreme makeover and when all was done we had a responsibility to the companies that invested in CPA. The Port of Saipan was barely making its monthly dues, so to avoid going into default the executive director [Efrain F. Camacho] and the board made the decision to implement the increase in tariff fees,” Lizama said.

Since then, she added, the port has been able to consistently pay its monthly financial obligations.

“If CPA did not implement the increases then we would have gone into default and there would have been financial and agency ramifications,” she said, adding that the increase does not necessarily mean CPA is out of the woods but is keeping its hopes up for an economic turnaround.