Home » Customs & Trade » Crisis hits hard warehouse operators, SGL importers

MEMBERS of the Customs Bonded Warehouse Operators Confederation (CBWOC) are now handling three to four containers a month from an average of 25 previously, suggesting a deepening economic crisis.

CBWOC president Alfredo Yatco said some member operators are cutting their workforce to save on costs.

Members servicing the manufacturing sector are taking the brunt with expected staff cuts of up to 20%. A less brutal cut of 5% is seen for operators catering to other sectors.

“We are now talking here of how to survive and staff reduction is one of the measures we feel is very important to keep our heads above water,” Yatco told PortCalls.

Warehouses are support facilities for the import and export industries, now on a serious downward trajectory.

“Our warehouses are utilized but not in optimum capacity so we have to have… cost-cutting measures including shifting to other businesses… since there is really a slowdown…,” Yatco explained, noting that some members have even gone into the tourism business.

“We are also undertaking aggressive marketing to replace our big clients, specifically from the manufacturing sector, with smaller ones to survive,” he said.

According to him, small and medium enterprises (SMEs) are somewhat insulated from the effects of the crisis due to their relatively low overheads.

It takes at least three SMEs to replace the warehouse business provided by one big company, Yatco pointed out.

This year, warehouse operators expect negative — or at best flat — growth

In 2008, while the sector posted growth, it was still less than the previous year’s figure, the association said.

Meanwhile, importers accredited under the Super Green Lane (SGL) have cut their workforce by 40-60% since last month and reduced work hours in response to the global economic crisis.

“We are really in for a tough time this year as no one is buying,” SGL association president Jimsy Macawile told PortCalls, adding that import and export shipments continue to decline due to reduced demand worldwide.

November exports slumped 12% while imports fell 31.5% compared to the same month last year due to the steep fall in electronic products.

The association comprises at least 100 firms including electronics giants Sony, Samsung and Panasonic and car manufacturer Ford.

“We can see the percentage of work cuts balloon even further,” Macawile said.

“So far the work cut only involves the manufacturing sector and we expect additional cuts in the future from the sales sector, so far immune from the effects of the crisis,” he added.

The association is banking on the bail-out plan of newly installed US President Barack Obama to arrest the sagging US economy, the country’s number one trading partner.

It hopes for a recovery this year but if the stimulus package does not work, recovery could materialize only after 2010, causing even more company closures and layoffs, the association said.

Last year, SGL members posted a 10% increase in their revenues despite the overall slowdown, thanks to strong demand from the Middle East offsetting those from the US and Europe.

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