BPO deal ‘perhaps most anti-labour abuse of power I have ever seen’ – shipping company boss
The head of a shipping company last night hit out at the Government’s partnership with a US firm to create an international online shopping service.
Kenny Thomson, the president of Mailboxes, said the deal meant that the Bermuda Post Office would support an overseas company in competition with island businesses.
Another retailer added that the scheme also made it easier for people to spend their money abroad.
MPs heard that the service would mean people could buy items from the US, which would be delivered on the island through the BPO.
But Mr Thomson said: “MyUS is a foreign company with zero presence in Bermuda.
“During the last few years, MyUS has advertised aggressively against the local shipping companies – the likes of Mailboxes and ZipX – taking market share from Bermudian businesses and redistributing it offshore.”
The businessman said he had “no issue with competition” because it forced his company to improve its service and lower prices.
But Mr Thomson added: “What we do not support, however, is the notion that the Bermuda Post Office would partner with MyUS, effectively supporting an overseas company to compete with the local shipping companies.
“There are at least five Bermuda-owned freight forwarders with warehouses in the US, any of which could have partnered with the BPO to launch a second shipping avenue into Bermuda, to the benefit of both entities.
“Why was there never a request for proposal?”
The Government was asked yesterday if the project was the subject of a request for proposal or quotation but there was no response by press time.
Mr Thomson pointed out that there was a fee for the mail handler’s licence that allowed island shippers to import packages.
He added: “Despite taxing each local shipping company thousands of dollars per year, the Bermuda Post Office itself admits to the entity losing millions over the years.
“This deficit is paid by the rest of the taxpayers.
“So how can an entity, which already gobbles public funds, be allowed to tax its own competitors then use those resources to go partner with an overseas company and compete against Bermudian jobs?”
Mr Thomson said: “Our country is led by a pro-labour government.
“This is perhaps the most anti-labour abuse of power I have ever seen.
“Walk into Mailboxes or ZipX and you will see nothing but Bermudian employees. On the contrary, try walking into MyUS at all.”
Mr Furbert said in the House of Assembly last year that the BPO’s estimated expenditure for 2020-21 was about $10.5 million.
He added that “combined traditional postal revenues” were just over $4 million.
The online shopping platform is part of the Post Office’s plan to boost income.
It is expected to start next month and could include UK shopping within six months.
Mr Thomson said: “In my opinion, the post office is a dinosaur – a true black hole for Bermuda’s already-suffering taxpayer.
“If they’ve been losing so much money, they should figure out how to reduce their overheads and deliver a letter on time for once.
“Using public funds to hunt the private sector, to the benefit of an American company, is, frankly, ridiculous.”
Kevin Smith, the managing director of IBC Bermuda, which runs the ZipX shipping service, said he agreed with Mr Furbert that changes had to be made at the Post Office to stem its losses.
But he said: “I am certain this isn’t the change needed to aid in the process of eliminating such substantial losses.
“There are two ways to avoid losing millions, increase revenue or cut expenses.
“One must ask if there are any operational inefficiencies that currently exist within the Post Office, and if so, might those inefficiencies have been addressed before our government opted to enter into a partnership with an overseas company?”
Tony Thompson, the chief executive officer at Gibbons Company, said: “What we would love is for the government to be able to work with us to give us some type of leniency as far as … duty … so that way we’re able to be competitive with international retailers.
“But all that seems to be happening is that they continue to make it easier for individuals, for customers to shop online and spend their money abroad as opposed to supporting local retail and the local economy.”
Mr Thompson said retailers that found ways to engage their customers through websites, social media, innovative marketing or “creative” opening hours had exceeded expectations.
He added that Gibbons customers seemed to have a better appreciation for the shop’s stock when restrictions caused by the coronavirus pandemic meant opportunities to buy goods overseas were limited.
Mr Thompson said: “There’s also a comfort of being able to know that if it doesn’t fit, I can return it to the store, which is impossible if you ship it in."
The Bermuda Government and MyUS were contacted for comment but none was received by press time.
• UPDATE: This article has been updated to show comments made by Kevin Smith, of IBC Bermuda, which were mistakenly attributed earlier to Kenny Thomson, of Mailboxes.