Pago Pago, AMERICAN SAMOA — The American Samoa Chamber of Commerce believes that it’s “highly likely that a return to border closures will exacerbate” even further the current impact on economic issues, such as shipping delays, supply shortages, and surging fuel and shipping costs.

The Chamber’s analysis document was included in a Nov. 11th letter from Chamber’s chairwoman, Luisa Kuaea to COVID-19 Task Force chairman, Lt. Gov. Talauega Eleasalo Ale, who was informed that the Governor’s Chief of Staff sent out last month an urgent email to all directors, CEOs, and key leaders requesting data on the potential impacts of a border closure.

Responses were to include healthcare, economic, environmental, social, and security considerations. She said this data was used to inform Fono members of the dire impacts an extended border closure and restricted travel would have on the territory.

Samoa News notes that several lawmakers had called to return to the closure of commercial flights between Honolulu and Pago Pago after the first-imported COVID-19 positive case was confirmed in September — when this route reopened on a limited basis.

Kuaea provided to Talauega, who is also the Governor’s Authorized Representative, the private sector’s perspective on border closing, through the Chamber’s “Border Closure Impact Analysis” document, which acknowledged the need to have closed the borders initially given the territory’s limited medical facilities and providers and vulnerable populations.

“However, the extended border closures and strict travel restrictions did have significant economic impacts in the territory and throughout the Pacific,” it says adding that, it’s “highly likely that a return to border closures will exacerbate these impacts even further”.

SHIPPING DELAYS

And among them is “shipping delays”, with the Chamber pointing out that congestion at the nation’s busiest ports has increased as the COVID-19 pandemic continues. This congestion is partly due to the labor shortage - i.e. port workers to offload vessels and truck drivers to deliver goods.

According to the Chamber, analysts project this port congestion will drag on well into 2022 while other experts have posited that relief won’t arrive until Chinese New Year 2023.

The Chamber also says that one of its’ board members flew to Los Angeles to connect with overseas port officials, reassess timelines, and design solutions to some of these shipping delays.

 American Samoa “has yet to experience the full ripple effect of these delays. Closing the borders again would exacerbate this situation further,” the Chamber states. “Ships will be unable to port in American Samoa, or, may opt not to port in American Samoa due to quarantine requirements.”

Additionally, travel restrictions will prevent the in-person negotiations that were needed to work out current shipping delays.

SUPPLY SHORTAGES

According to the Chamber, the pandemic and its travel restrictions have also caused supply chain disruptions across multiple industries, with toilet paper, cleaning supplies, water, and meat running short in the territory.

“We also witnessed an unprecedented shortage in lumber, cement, and other construction materials,” the analysis document said. “All of these shortages have led to significant price increases.”

It points out that China is a major exporter and supplier of goods for distributors and retailers on the island. Additionally, China has been challenged with many delays due to power outages and a dwindling supply of coal. Furthermore, distributors and retailers in American Samoa have had their ability to order goods restricted due to raw material shortages - PET & Aluminum.

“The timelines for delivery are now indefinite,” the Chamber said.

FUEL & SHIPPING COSTS

The Chamber’s analysis points to surging fuel and shipping cost, saying that last year, the demand for crude oil dropped precipitously during the pandemic. In response, oil producers decreased their production levels. The demand this year has increased far more quickly than production rates.

With less crude oil in storage, the price per barrel has surged, making it more expensive to make gasoline — whose prices have risen from 88 cents to $3.13 a gallon this past summer, which was a 40 percent increase.

“Gas prices have risen since then. This translates into increased costs for transportation via land, air, and sea,” the Chamber said. “Coincidentally, port congestion and a shortage of shipping containers have pushed up shipping costs.”

 “We are seeing triple rates in shipping for American Samoa and other Pacific Islands, and these increased costs are ultimately passed on to consumers,” it says.

AIRLINE FRUSTRATIONS

According to the analysis, border closures, which were extended month to month, since March of last year, “strained relations” with Hawaiian Airlines and that the suspension of flights and loss in revenue was in the millions.

“But, the constant movement of the goal posts in terms of when flights would restart, and that impact on planning, resources, and manpower, may have been the most frustrating for Hawaiian Airlines,” it says.

“Closing borders again is likely to cause further damage to an already strained relationship,” the Chamber says.

Samoa News will report later this week on the rest of the analysis from the Chamber.