AROUND 61% of those in the Philippine transport and logistics industry believe an increase in warehouse rates charged by off-dock container yard/container freight operators is justified 13 years after the Bureau of Customs (BOC) prescribed uniform rates for these operators, a survey shows.
An overwhelming 75% of the 28 industry players who responded to a recent PortCalls survey, however, describe the interim rates contained in a resolution adopted by the Association of Off-dock CY/CFS Operators of the Philippines (ACOP) in November as “too high”.
ACOP adopted the rates pending approval of a new BOC rate schedule. The interim rates are higher than those set by BOC Customs Memorandum Order 24-2001 but generally acknowledged as lower than prevailing industry rates.
The survey was taken during a recent PortCalls-organized forum attended by freight forwarders, cargo consolidators, supply chain managers, customs brokers and off-dock CY/CFS operators at the Hotel H2O in Manila.
Panelists were Deputy Commissioner Agaton Uvero, head of the Bureau of Customs’ Assessment and Operations Coordinating Group, ACOP president Alex Ong, Association of SEIPI Logistics Managers president Malou Ronquillo, Chamber of Customs Brokers Inc. former president Roberta Riga, Philippine International Seafreight Forwarders Association (PISFA) president Mariz Regis and Port Users Confederation vice president Julita Lopez.
The forum was organized by PortCalls at the request of industry players who wanted government to curb high off-dock fees allegedly charged by off-dock operators as well as high forwarders’ charges.
Asked whether they think an off-dock CY/CFS rate increase was justified, 15 of the respondents answered “yes” while 11 objected and two left the question blank.
One respondent insisted that CMO 24-2001 should be followed.
A respondent from the forwarding and logistics industry who favored an increase commented that it “must be reasonable and in accordance with actual mandated functions” of off-dock CY/CFS operators.
He said further: “The BOC should exercise its authority over the (off-dock) CFS operators to protect the interest of the public and avoid duplication of charges.”
At the same time, he said “PSB (Philippine Shippers’ Bureau) should exercise its regulatory authority over PISFA and forwarders to control (their) very high and miscellaneous charges.”
On top of high off-dock rates, there have been reports of overcharging by some freight forwarders to make up for “lost” revenue, partly arising from warehouse operators now unwilling to offer forwarders so-called “rebates” in exchange for exclusive business. (ACOP members face much-reduced collections with their interim rates being lower than prevailing industry charges.)
“While I find the ACOP interim rates to be just right, the thing that bothers me is the malpractice of some consolidators whereby they charge ‘warehouse’ and other charges which are not part of the PSB rates, so they can still come up with a bigger profit,” commented one respondent.
“This, I think, will eventually kill the forwarding business.”
When it came to the question of what was the justified rate of adjustment, an international freight forwarder, replied: “Depending on the cost of each (of the) items…”
He added: “BOC should consider the fact that off-dock rates affect competitiveness of our products for exports, merchandise for local sales and end-users. Indirectly off-dock rates affect our foreign trade competitiveness and ultimately our economy.”
Another respondent, on the query on which off-dock rates he was paying (interim rates vs CMO 24-2001), answered he was “unsure (definitely not ACOP rate), i.e. higher than ACOP rates”.
A respondent from a freight forwarding company, on the other hand, expressly said “BOC CMO 24-2001 is not being followed / complied with by all CFS operators”.
Asked if penalties on overcharging under BOC CMO 24-2001 were sufficient, an international freight forwarder answered “no”, and suggested increasing the penalty for the first offense from P50,000 to P200,000. Another suggested P500,000 for the first offense.
Yet another said current penalties should be “strictly implemented”.
To a question on what they think of ACOP’s interim rates, 18 respondents answered “too high”, while 5 considered them just right and 2 found them too low. There was no reply from the rest.
Image courtesy of joesive47/ FreeDigitalPhotos.net