Trade Board opening up auto pre-inspection to multiple service providers
The Trade Board Limited will be opening up pre-owned vehicle inspections to multiple players when the current contract for the Japanese service provider expires in January.
The agency has already began recruitment with ads requesting bids from local and international service providers, saying it needs inspectors for pre-owned vehicles in eight countries. Operators in Jamaica’s used car market are not allowed to apply.
The applicants must already have facilities in place for the inspection and passing of vehicles headed to Jamaica. Their track record must also include at least 30,000 annual inspections, on average, over the past three years.
The contract currently held by Auto Terminal Japan Limited comes to an end on January 31, 2024.
“We are going back to the market,” said the Trade Board, which is responsible for the issuing of import permits for vehicles.
“The current provider is most welcome to enter a bid for the contract and will be given an equal opportunity to provide the services,” the agency said.
All autos in Jamaica are imported. In the pre-owned segment, the volumes range above 30,000 per year, most of which emanate from Japan. Other main markets are United States, Canada, the United Kingdom and Singapore, the Trade Board told the Financial Gleaner.
Adopting a more competitive pre-shipment inspection regime would allow for greater transparency and wider geographic coverage, said the agency, which is seeking inspectors on three continents.
The move has been met with approval from the Jamaica Used Car Dealers Association, JUCDA, which had been a vocal critic of the pre-inspection regime at its advent five years ago.
“One inspector has caused a lot of delays. They were overwhelmed with inspections not done properly. To give one example: snow tires should not be fixed to the vehicles and they were,” said JUCDA President Lynvalle Hamilton.
“We should get to the point where we have multiple pre-inspection facilities. It would allow us options and reduce delays,” he said.
On average, car dealers face delays of three to four months for shipment of their orders. “Because of that, vehicles were more expensive because suppliers factor the delays, incurring storage,” Hamilton said. “There was one approved pre-inspector because the main market is Japan, [but] we also import from the United States, Dubai, Australia and other countries. These other countries don’t have the delays associated with Japan.”
Pre-inspection was first introduced by the Government of Jamaica in 2018 in order to tamp down on bad actors in the used car market and the frequent complaints of vehicle tampering, including odometers to reflect lower mileages, and other irregularities, such as the misstated age of vehicles.
The new system falls under the revised Motor Vehicle Import Policy, which was adopted in April 2014. It entails the physical inspection of goods being carried out in the country of export prior to shipping, so as to establish the exact nature of the goods. For motor vehicles, it seeks to ascertain the history of the vehicle, including accident and major repairs; conformity to age limit via the true model year; roadworthiness; radioactive/microbial contamination; and odometer reading.
Last year, the value of all motor vehicle imports was $64.19 billion, up from $56.88 billion in 2021, Statin data shows. The data does not disaggregate used and new vehicles.
However, the Trade Board said applications for used car imports are on the decline. There were 31,145 applications last year, down from 33,705 in 2021.
Currently, the Trade Board, which is the provider of permits for all merchandise imports and exports, has pre-inspection providers in Japan, the United States, United Kingdom and Singapore. There is none in Canada.
“Based on the volume of imports from Canada, it is important that measures are in place to protect consumers and our local agriculture sector,” said the Trade Board through its communications unit.
“As such, the Trade Board Limited is seeking qualified ISO 17020-accredited companies that can provide pre-shipment inspection, and sanitisation and quarantine services for used motor vehicles imported into Jamaica from Japan, the United States of America, the United Kingdom, Singapore, United Arab Emirates, Canada, China and Thailand.”
To qualify, applicants must have at least five years’ experience in pre-inspection, have no connections to used car dealers in Jamaica, and cannot be a supplier or have business relationships with suppliers or exporters of used motor vehicles in Jamaica” the board stated.
The proposed cost of the service to vehicle importers is also required.
On its website, the Trade Board said pre-shipment inspections are currently only required for vehicles coming from the US, UK, Japan, Singapore and UAE. The fees range from US$230 to US$310 per motor vehicle. It also names the current inspectors as Auto Terminal Japan for the mandatory markets; and American Auto Checks for motor vehicles and heavy-duty equipment imported from the US only.