Pres Ali calls for urgent investment to tackle high Caribbean shipping costs

…Minister signals action on demurrage fees

President Dr Irfaan Ali and Public Utilities Minister, Deodat Indar have called for urgent investment in Caribbean shipping infrastructure and stronger regional cooperation, warning that high freight costs, reliance on transshipment hubs and weak connectivity undermines the region’s competitiveness.
Speaking at the opening ceremony of the Caribbean Shipping Association’s 56th Annual General Meeting, Conference and Exhibition at the Guyana Marriott Hotel on Monday, President Ali identified high shipping costs, inadequate regional connectivity, uneven port infrastructure, weak inter-Caribbean trade, climate-related disasters and geopolitical instability as key challenges that must be addressed through a coordinated, investment-driven approach to strengthen the region’s shipping industry.
Citing a May 2026 International Monetary Fund (IMF) working paper entitled Mind the Gaps: Caribbean Trade Partners and the Connectivity Constraint, Ali said all Caribbean countries, except Jamaica, incur shipping costs above the global average, undermining their competitiveness.
“This is an IMF study that found that all Caribbean countries, except Jamaica, incur shipping costs above the global average… each of these present a distinct challenge. However, together, they reveal the urgent need for a more coordinated, forward-looking, investment-driven approach to Caribbean shipping. That is why I believe that this meeting can develop an urgent policy document backed by the Caribbean Development Bank (CDB), backed by the IDB (Inter-American Development Bank), backed by IDB Invest, backed by all our funding agencies and available capital,” he said.
He said the report found that limited direct shipping connections, dependence on transshipment hubs, small markets and geographic dispersion contribute to high shipping costs, while weak connectivity increases countries’ reliance on a relatively concentrated group of import suppliers, leaving them more vulnerable to external disruptions.
Ali said Guyana had experienced the negative effects of transshipment, with containers left at ports for periods ranging from nine months to as long as two years, resulting in shipping delays and prolonged project timelines.
“Whilst transshipment is an established feature of global shipping, it can introduce additional handling, longer transit times, uncertainty in scheduling and increased costs. And we have learned this the hard way in Guyana. We had containers sitting in some transshipment ports for a year and a half, two years, nine months. Just imagine, not only the delay in shipping, the delay in projects, project costs, project time. Many projects had lengthy delays because of this problem. For small markets, the economics of shipping can be particularly unforgiving,” he said.
He added that rising freight costs increase the prices of imported food, while higher transportation costs and delays in the delivery of machinery, equipment and industrial inputs increase operating expenses for businesses and undermine their competitiveness.
“Ultimately, high shipping costs become a cost-of-living problem for our people and a competitiveness problem for our businesses. Therefore, we must address this. We must ask ourselves whether we’re doing enough to improve the efficiency of regional shipping networks, consolidate cargo, coordinate schedules and encourage commercially sustainable services between our territories,” Ali said.

Challenges
Meanwhile, Public Utilities Minister Deodat Indar highlighted the challenges facing production centres across the region, noting that the rerouting of shipping routes had contributed to similar difficulties. He also addressed the issue of demurrage charges, which he said the Government would take steps to address.
“Then we are faced with demurrage, something that we all detest. And I hear the murmuring in the room. Demurrage! We detest it. I repeat, we detest it. It is an added cost that should not be there. It is a strain on the consumer, on poor families across economies, including ours. We detest it, and we will act on doing something about it,” Indar said.
Demurrage is a charge imposed when a shipping container remains at a port or terminal beyond the allotted free time.
In April this year, the Government announced plans to intervene in the growing problem of demurrage fees at local ports, where brokers were facing charges of up to US$25,000 per day.
At ports in Guyana, the allotted free time for collecting containers is currently three days. During a consultation with industry stakeholders, brokers highlighted the growing financial burden of demurrage, noting that the steep charges are ultimately passed on to consumers.