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Dock manager suggests bigger containers could slow rising food prices

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Photo by Glenn TuckerEconomy of scale: The Bermuda Islander off loads containers at the Dock in Hamilton in this file picture. It has been suggested that rising food prices in Bermuda could be slowed by allowing double-sized containers to be used.

Spiralling food costs could be slowed down by doubling the size of Bermuda’s importing containers, according to Hamilton dock manager Peter Aldrich.Mr Aldrich, CEO of Stevedoring Services, believes switching from 20ft to 40ft containers may reduce importing costs which are ultimately passed onto the consumer.He said that could be the only option left to keep food prices in check, as businesses have already done everything else possible to keep their own costs to a minimum.The Royal Gazette’s The Cost of Living series has shown how the price of staple items such as potatoes, bread and rice have risen by more than 50 percent in a decade.“We must look outside the box for a game changer to contain the cost of our most important import, food,” Mr Aldrich told this newspaper.“There should be a greater economy of scale in importing one 40ft container as opposed to two 20ft containers and there could be significant savings depending on the goods and where they are shipped from.”Mr Aldrich said he’s raising the issue to promote discussion on the subject, adding: “We feel obliged to bring it to everyone’s attention that there’s a possibility to be explored here.“While I am not advocating a wholesale change for Bermuda to the 40-feet container, I am saying that this could be the game changer that Bermuda needs to contain the cost of food.“Ironically, the 20ft container is the proverbial box that we must think outside of.”The shipping lines supplying Bermuda with food have been hit hard by the economic crisis, said Mr Aldrich, with cargo volumes declining by ten percent per year for the past three years.Their margins have been further reduced by soaring ship fuel prices, on top of rising costs of consolidating cargo in the US and moving the container to the pier for shipping.“All of these costs are beyond the control of the importer,” said Mr Aldrich.“We must look beyond the costs that we cannot control before the goods even get to Bermuda, but look to components in the supply chain that we can change.“In order to contain the costs of shipping food we must look beyond the traditional methods that we are already using. We cannot control the cost of shipping, but we can control the unit of transport.”He said there has been no major change in the method of shipping cargo since the 20ft shipping container was introduced in Bermuda in 1969.“The 20ft container was the standard in shipping for many years but has been overtaken internationally by the 40-feet shipping container,” he said.“The 40ft container is now the primary shipping container in circulation worldwide. In most international jurisdictions the cost to move a 20ft container is the same as moving a 40ft container.”He conceded Hamilton’s port, and Bermuda’s roads and warehouses, may not be ideally suited for 40ft containers, but added: “In the interest of containing the cost of food I am sure that on a limited basis the use of 40ft containers would be beneficial. It deserves serious consideration.“In the long term, moving away from the 20ft container to the 40ft will be the only way to contain the cost of goods entering the Island.“It is the only component left to change in management of our supply chain. This could only be achieved by moving the port, but that is a story for another day.”The Cost of Living series has shown how rising food, electricity and fuel bills, compounded by job losses and wage cuts, are leaving increasing numbers of people struggling to cope.Mr Aldrich warned of grim consequences for businesses if a solution is not found.“Like many, I have been following with interest the recent stories on the increase in the cost of food and the negative effects on our community,” Mr Aldrich said.“Like many local businesses we have seen the cost of doing business increase, while revenue continues to decrease. Unchecked, this is a scenario with only one ending.“Businesses are in a catch 22 position: how to survive in a shrinking market with limited resources and a decreasing customer base, without increasing the cost to our remaining customers. It is a seemingly an impossible equation.“I am sure that most businesses have already cut all the fat out of their operations and have no other choice but to start reducing their headcount in order to extend their survival.”