Harbour Centre responds to bulk and breakbulk cargo pile up

0
949
Steel shipments accounted for 55% of the total 2014 volume at Harbour Centre, bulk cargo 35% and general cargo the rest.
Expansion of Harbour Centre would help the terminal lick congestion and enable it to respond to expected volume growth of bulk and breakbulk shipments.
Expansion of Harbour Centre would help the terminal lick congestion and enable it to respond to expected volume growth of bulk and breakbulk shipments.

Harbour Centre Port Terminal, Inc. (HCPTI) has entered a new phase of progressively responding to the volume increase of bulk and breakbulk cargo.  The past two years saw physical improvements at HCPTI complemented by investments in equipment acquisition.

HCPTI vice president for operations James Lomeda, in an interview with PortCalls, said Harbour Centre has been operating at capacity since 2012.  He pointed out that vessels calling the terminal have not only become bigger but volume of cargo has also grown beyond expectations.

HCPTI geared up by constructing an additional cargo storage containment facility; completing its yard pavement project to ensure safety and ease of movement inside the yard; fabricating the bulk conveyor system that will improve bulk cargo discharge to 8,000 metric tons (MT) per day; and embarking on an equipment re-fleeting program that doubled efficiency.

These and more improvements has earned HCPTI certifications for ISO 9001, ISO 14001 and ISO 18001.

Challenges to port capacity

While Harbour Centre’s yard utilization has improved and average waiting time has gone down to 30 days, HCPTI’s Lomeda said there are still berth issues due to the entry of bigger vessels; the pace of arrivals is also faster than before.

Lomeda said the port cannot handle all of the big vessels coming in at the same time because the “terminal will suffer… we don’t have sufficient resources to efficiently handle five big steel vessels simultaneously.” Harbour Centre can accommodate a maximum of seven vessels at a time.

Lomeda said “we need to balance our resources vis-a-vis the types of cargoes we are handling.”

So as not to congest the yard, HCPTI had to control the volume of cargoes being unloaded to match the volume being released, said Geraldine Dy, officer-in-charge of HCPTI marketing. And in order to accommodate growing steel shipments, HCPTI at some point adjusted yard utilization by cargo types.

HCPTI is looking for areas at the Harbour Centre complex or in nearby places to serve as an additional storage area.

One of HCPTI’s strategies to handle current cargo volume is allowing lightening operations in four jetty areas, Dy said. This way, cargoes are unloaded on the ship side, lessening the number of cargoes needed to be discharged on the pier side, thus cutting berth stay.

The provision of jetty areas is, however, just a short-term solution, according to Lomeda.

In addition, the company started giving out cash incentives and free meals to clients, customs brokers or truckers who pull out their cargoes during holidays and weekends. Dy said this had been effective in more than doubling deliveries to 500 from the 200 previously.

Arrival of heavier ships

From October 2014 to February 2015, vessel queue lengthened as bigger vessels came in requiring greater handling. HCPTI said vessels calling Harbour Centre shifted to 40,000 to 50,000 MT and 60,000 to 70,000 MT, from the previous 25,000 to 35,000 MT.

Vessels of about 40,000 MT started calling in 2012. In 2014, the terminal accommodated its biggest vessel to date of about 70,000 MT.
Vessels of about 40,000 MT started calling in 2012. In 2014, the terminal accommodated its biggest vessel to date of about 70,000 MT.

Vessels of about 40,000 MT started calling in 2012. In 2014, the terminal accommodated its biggest vessel to date of about 70,000 MT.

The shift resulted in fewer vessels being accommodated because of the difference in length, longer cargo unloading time, and scarcity of ship-side unloading service providers.

With bigger vessels, there was a need for ship-side unloading since the Manila Ports wharf was not deep enough to accommodate such vessels. But with greater requirement for ship-ship loading came greater need for barges and LCTs, the supply of which was found inadequate. It did not help that jetties for unloading barges and LCTs were also insufficient.

By February 2015 though, port yard utilization gradually returned to normal levels (around 61%), a steel importer requesting anonymity told PortCalls in an email. This is due to a confluence of events: the indefinite lifting of the Manila truck ban in September 2014; the provision by Metropolitan Manila Development Authority (MMDA) of a 24-hour truck lane for certain designated routes; issuance by the Land Transportation and Franchising Board (LTFRB) of provisional authority to trucks with port-related services pending franchise release; and acquisition by HCPTI of forklifts improving equipment uptime.

HCPTI officials said the company bought 10 additional forklifts last year and plans to acquire 16 more this year. Forklifts currently number 45.

The same importer noted that as a result, commodities are now being taken out with more regularity at the port.

Dialogues and tutorial sessions between the Bureau of Customs and the Philippine Iron and Steel Institute (PISI) also helped the customs agency better understand commodity pricing dynamics PISI members have to deal with, the importer said, leading to faster clearance of shipments.

PISI and the Philippine Steel Rolling Mills Association had also elevated their concerns to the Cabinet Port Congestion Working Group, chaired by Cabinet Secretary Jose Rene Almendras. The associations likewise participated in consultation fora convened by the Philippine Ports Authority, Philippine Chamber of Commerce and Industry, and Federation of Philippine Industries.

Increased cargo volume

HCPTI officials said that early last year, volume of steel imports increased and vessels carrying steel imports became bigger. And when steel imports increased, imports of other products used in relation to steel, such as cement, also increased.

This was compounded when the daytime truck ban was imposed by the city government of Manila in February, pushing the port’s utilization even further.

Steel shipments accounted for 55% of the total 2014 volume at Harbour Centre, bulk cargo 35% and general cargo the rest.
Steel shipments accounted for 55% of the total 2014 volume at Harbour Centre, bulk cargo 35% and general cargo the rest.

Congestion at Harbour Centre grew serious starting April 2014, the steel importer said. By that time, the Manila truck ban had been in full force for two months.

Up until March last year, the importer said vessel berthing time was around eight to 12 days but this increased to 18 to 24 days from April to September. From October 2014 to February 2015, vessel waiting time had shot up to as high as 70 days.

Contributing to the problem, the source said, were the scarcity of trucks due to the Manila truck ban; increased penalty for colorum (unfranchised) vehicles and non-confirmation year policy (where effectivity of the franchise depended on the year of make of the truck) of the LTFRB; and the MMDA’s limited number of designated road lanes for trucks.

With the Manila truck ban, the operating window for trucks plying the roads of Manila was reduced by 47%, and trucks were limited to using just the designated lane, the steel importer pointed out.

To deliver construction materials outside of designated routes, trucks had to secure a permit from the Manila Traffic and Parking Bureau, a task the importer described as a “futile attempt.”

He said the previous delivery schedule of five to six times a week was reduced to two to three per week. Moreover, the number of available trucks further dropped because of the anti-colorum campaign of the government and its drive to phase out old trucks, with about 90% of operating trucks being second-hand and more than 15 years old.

While some steel importers explored the use of Subic and Batangas ports, the source said, they found the logistics costs high and port-handling facilities for bulk and breakbulk shipments there lacking.

Most steel importers’ plants are in Metro Manila. HCPTI’s Dy noted some steel plants are situated in Bulacan — far from Batangas which has a breakbulk terminal – and nearer Manila than Subic port. This has meant that despite the capacity issues most steel importers still preferred to ship through Harbour Centre.

Another contributing factor, the importer said, was the intensified anti-smuggling drive by the BOC that led to increased diligence by the agency’s Import Assessment Service (IAS) in verifying valuations. This has meant that IAS took seven to 15 business days to give clearance versus two to three days previously. (The clearance time as of this writing is five to seven days; the fastest could be four to five days.)

The importer also complained about “inadequate material handling equipment at the port”, noting “the uptime of forklifts was low due to breakdowns, brought about by improper preventive maintenance.” This has contributed to slower vessel unloading, lower wharf utilization and increased vessel waiting time. The yard is also constantly full since trucks could not be loaded fast enough.

Projects in the pipeline

This year, HCPTI has more projects designed to further mitigate congestion and increase productivity, including completing yard pavement, now 80% done.

Since the complex is a reclaimed area, HCPTI is continuously rehabilitating the yard’s sheet piles to maintain stability and structural integrity of the yard.

Regular dredging is conducted to prevent siltation since the area is located near river systems.

Lomeda said HCPTI’s Operations Division is focusing on hitting an internal productivity target of 1,000 to 1,500 tons per gang per shift from the current 400 tons to 500 tons.

The terminal’s Unified Port Operation Realtime Technology or U-PORT is a big help in pushing efficiency, according to Lomeda. The mobile application introduced in 2013 allows Harbour Centre customers to check cargo status in real time, apply for berth (for shipping lines), view invoices, and receive company and product updates. Lomeda noted U-PORT eliminated frequent calls by customers since they could get answers to their inquiries through the app.

Moving forward, HCPTI said it remains committed to providing an efficient and responsive gateway to bulk and breakbulk cargo and is ready to meet challenges of economic growth.

Government expects demand for bulk and breakbulk cargo to keep growing. In particular demand for iron and steel will be bolstered by “ongoing reconstruction and rehabilitation of disaster-affected areas and retrofitting works for disaster-resilient infrastructure,” said National Economic and Development Authority deputy director general Rolando G. Tungpalan at the recent 2015 Southeast Asian Iron and Steel Institute Conference and Exhibition. – Text and photos by Roumina Pablo