The Chamber of Industry, Marketing and Food Distribution (MIDA) filed a lawsuit in federal court on Thursday to stop the application of the new tariffs recently approved by the Bureau of Transportation and Other Public Services (NTSP) to protect existing contractual agreements for food transportation and to avoid rising food costs that affect consumers’ pockets.
The lawsuit seeks to have the NTSP regulation and circular letter, which sets out the new installments, declared invalid and unenforceable, as well as the declaration of a standing order preventing the government from issuing sanctions for alleged non-compliance.
“We have taken this urgent legal action, after we have exhausted all avenues, in order to protect the pockets of consumers and stop another excessive increase in the operating costs of the food industry in Puerto Rico,” Lcdo said. Manuel Reyes Alfonso, executive vice president of the organization, in written statements.
He added that NTSP’s actions violate the Promise Act, as the circular letter was not previously sent to the Fiscal Supervision Council for review and approval. Likewise, the rates are in contrast to the approved Fiscal Plan for fiscal year 2020-2021.
According to Reyes, there is misinformation, because it is not about raising rates that already existed, but about imposing a new tariff system on sectors operating under private contracts negotiated on the free market for the benefit of both parties and especially the consumer. Therefore, far from deregulating what has been regulated, as ordered by the Fiscal Plan, the NTSP authority is expanding and dramatically changing the way we do business in our economy. The resulting increase that the government intends to implement is to the detriment of the food industry and therefore consumers, who will be affected by any price increase resulting from the application of the new tariffs.
“When NTSP imposed temporary transport tariffs in December, it did so by ignoring trade relations between independent carriers and grocery stores. No serious analysis has been made of the impact of such a change on our economy. Historically, the Public Service Commission, the predecessor of the NTSP, had respected these relationships, excluding them from its regulatory tariffs, as they were the same as those agreed between two private entities, the driver and the trader. It is absurd and defeats the purpose of private contracts, to claim that we apply tariffs designed for individual trips when thousands of trips are contracted, offering guarantees and certainty to transport companies “, underlined Reyes Alfonso.
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The MIDA spokesman pointed out that the rates included in the new NTSP regulation did not take into account the operation of the food distribution industry. He explained that the food distribution and transport scaffolding is a complex one in which companies contract individually with independent truck owners.
Payments to carriers are also based on the number of boxes or “packages” delivered to retailers. Rates vary depending on the location of the stores to receive the goods and the type of goods to be delivered: dry, fresh, refrigerated or frozen. Other factors, such as the weight and size of the packages, also influence recruitment. Commodity delivery trips involve multiple stops at various shops and municipalities.
He clarified that this contract is usually reviewed annually, so it is also incorrect to claim that rates have not changed in 15 years, but have been adjusted much more efficiently than any regulatory process.
“They created a problem where none existed. The industry has always had a good relationship with its thousands of careers, as evidenced by decades of business relationships. Each part of a negotiation can aspire to more, but this negotiation process ensures efficiency in the supply chain for the benefit of the consumer. These increases would add to those already imposed by the operators of the docks with which the government did not want to intervene, those of electricity and international ones that we do not control. We urge Governor Pierluisi to listen to the food industry, protect consumers from these increases, and allow us to clear up the confusion caused by a small sector that does not represent the entire private transportation industry, “he said.
The appeal filed by MIDA is the second filed by private sector entities in connection with this regulation, the Chamber of Commerce filed another court with the local Court of Appeal at the end of January.