Traders and companies in Dubai who import and store their goods, materials and other supplies at the ports said the new rates will have a negative impact on their business, as they need to allot more money to cover the tariff adjustments.
Those who will be badly hit are food traders, who supply goods to major retailers and supermarkets, as well as other companies that import in bulk or huge quantities because they find it difficult to clear their shipments within the free five-day period. The lack of storage facilities in Dubai is also making matters worse.
"I'm losing nine per cent on every trade I do because of this. My profit margin on food has never been more than 4.5 per cent. So this practically wipes off my profit. I've done business here for 34 years, but if I end up paying and losing a lot of money, where is the incentive for me to stay in this business," a spokesperson for Dubai's Foodstuff Trading Group, that represents 2,500 food trade firms, told Gulf News.
The source said about 300 traders in Dubai are facing the same dilemma and are banking on DP World to provide them some relief, such as granting a refund, exemption or reverting to the old rates.
"Earlier, we used to pay Dh1,000 to Dh2,000 for every ten-container consignment. Today, we're paying about Dh20,000 to Dh30,000. Some companies like mine have hundreds of containers, so this will be more difficult because there's no other storage facility available in Dubai," the spokesperson said.
Advance warning
"Also, this kind of notice should have been given to us three months in advance so we could redo our trade or import less. I learned about it only on November 2," he added.
DP World's chief executive Mohammad Sharaf defended the decision, saying that it is intended to decongest their yards, ease the flow of cargo traffic and improve the overall productivity of their terminals.
"This is not a money-making strategy. We're doing it to reduce the congestion at the port. When the rates were still cheaper, our yard was being used as a cheap warehouse. Now, you can see there's no more congestion. The goods are moving much faster. There are no more ships waiting. Overall, this is for the good of Dubai's trade," Sharaf told Gulf News. He would not comment if the new rates will be permanent, but he said they "don't want to take the risk" of restoring the old tariff structure, as it might just encourage traders to store their shipments longer at the ports.
"We want to serve more traders with more boxes, more cargoes moving in and out of Jebel Ali. We can't afford to let cargoes sit in the yard for a long time. Otherwise, it will become a huge warehouse," he added.
He said traders can approach them if they feel the new policy is causing problems. "They can let us know what their issues are so we can help them. Our job is to keep the flow of cargo as smooth as possible. If the problem is on our side, we will fix it, if it's on another authority, we can coordinate with them," said Sharaf.