ATI
executive: New security measures may call for port
security charges
PORT and terminal operators worldwide
may have to charge extra for the implementation of
new security measures, in particular the International
Ship and Port Facility Security (ISPS) Code which
takes effect July 1.
At the recently concluded 2nd BIMP-EAGA
Conference and Exhibit at the Peninsula Manila, Asian
Terminals Inc. (ATI) chairman and president Richard
D. Barclay said port and terminal operators are being
compelled to look for means to recover costs resulting
from increased security measures. "The question is:
'who pays?' Is it the [private] operator or the government?
There must be some means for us to
recoup our costs. This is entirely different from
making profits," he pointed out. A solution could
be the imposition of port security charges separate
from cargo-handling charges, he added.
Barclay noted that in some countries,
costs arising from the implementation of various security
measures are absorbed by the government and not the
private sector. But in the last few months, government
has "passed the task (of ensuring compliance) to terminal
operators," he said.
In the Philippines, he said terminal
operators are being asked to provide facilities, including
expensive x-ray machines for containers. "The ISPS
does not require these x-ray machines. It is the Bureau
of Customs that requires them, also as part of security
measures," he explained.
The ISPS Code requires port facilities
to conduct a security audit; develop a security plan;
seek approval of the security plan by the respective
national authority; appoint security officers; provide
training; and implement the security plan. Barclay
said that aside from additional costs, the implementation
of improved port security measures is affecting the
productivity and efficiency of terminal operations.
"These security measures may have
a negative impact on port productivity and efficiency.
The additional capital and operating costs are significant
and may vary from port to port," he said.
Barclay stressed terminal operators
are not alone in shouldering costs resulting from
implementation of the ISPS Code. Shipping lines, he
said, are also spending about $30,000 per vessel or
$1.5 billion for the entire industry (fleet of 50,000
vessels) to achieve full compliance to the ISPS Code.
- Maritess R. Mesias
(ATI) pursued programmed investments
for port modernization and capacity building in 2003
while remaining prudent on account of marginal growth
in Philippine import and export volumes.
The company saw a 39% drop in net
income of P389.50 million from P640.67 million the
previous year.
Full-year revenues from ports and
non-ports businesses remained steady at P3.58 billion
in 2003 from P3.52 billion in 2002. Coming from its
2002 growth of 25%, ATI expanded port facilities at
the South Harbor, acquired cargo handling equipment
for the Port of Batangas, and invested in training
and equipment in preparation for the compliance to
the International Ship and Port Facility Security
(ISPS) Code.
Investments to further improve international
container and general stevedoring operations were
implemented during the year. Two stages of the expansion
of the main container yard at the South Harbor were
completed. Also at the main container yard, the company
established the Designated Examination Area (DEA),
a fixed and secure terminal facility where the Bureau
of Customs can conduct more efficient inspection of
cargoes.
The new DEA facilitates shorter turnaround
of containers from storage to exit from the terminal
and increased levels of security and safety of port
users and cargoes inside the 20-hectare container
storage facility. During the year, the company also
completed the construction of a new off-dock customs
bonded warehouse for the Bureau of Customs.
Equipped with modern security equipment
and two elevated ramps, the new warehouse will not
only provide improved security of cargoes but will
also reduce the activities associated with handling
security cargoes in the port, thereby considerably
enhancing the safety of personnel in South Harbor.
New cargo handling equipment were also deployed for
2003, leading to improvements in productivity and
safety.
Old 40-ton trailers in use at the
South Harbor Container Terminal were replaced with
new 55-ton capacity units. A new box spreader and
trailers were also acquired for the General Stevedoring
Terminal. South Harbor continued to be the major driver
of the business, handling a 7% growth in container
volume from 614,309 TEUs in 2002 to 656,625 TEUs last
year.
The improvement is above government's
projection of a 6.5% growth. Port of Batangas exclusive
operator ATI Batangas Inc., an ATI subsidiary, meanwhile,
acquired a P150-million mobile quay container crane
during the year. It is the first container crane and
support equipment deployed for the international container
and general stevedoring operations in the Port of
Batangas.
ATI Batangas Inc. handled 13,122
TEUs in 2003, a 33% rise fuelled by import and export
volume growth generated from the industries that have
started to relocate to the Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon)
region.
With these investments towards the
long-term growth for the company, additions to cost
of port facilities and equipment increased P408.00
million in 2003 compared to the P82.84 million incurred
in 2002.
Federal Express Corp. (FedEx) is
relocating its Asia hub operations from Subic to Clark
beginning 2007 at an investment amounting to $450
million.
Clark International Airport Corp.
president Adelberto Yap said the choice of FedEx is
already a done deal. "In fact, I'm scheduled to go
to Memphis for the signing of the 25-year agreement
with FedEx on April 11," he noted.
The courier company is reserving 50
hectares for its future operation in Clark, he added.
Guangzhou loses out FedEx was earlier choosing between
Clark and Guangzhou, China for the site of its Asian
hub. It is currently operating in Subic under a contract
with the Subic Bay Metropolitan Authority which will
end in 2007.
Yap said FedEx has two more years
to operate in Subic but will start construction of
its facilities in Clark as early as next year for
a smooth transition. "FedEx has to leave Subic because
they could no longer expand there since Subic is primarily
for port terminals," he noted.
Subic became FedEx's Asia Pacific
hub in September 1995, connecting 19 key cities in
Asia. The hub services US WestCoast from Penang, Singapore,
Kuala Lumpur, Manila and East Timor. Yap also said
FedEx favored the Philippines over China mainly because
freight forwarders prefer to do business with the
Philippine government.
"They prefer our cheap and skilled
labor," he said, noting how the Americans approve
of the work culture of the Filipinos, especially their
ability to communicate properly.
The existing two runways in Clark
was also a factor in the FedEx choice.
THE proliferation of used clothing,
known locally as ukay-ukay, has caught the attention
of the Bureau of Customs (BOC).
The bureau recently implemented through
Memorandum Circular No. 7-2004 the 100% examination
of shipments processed under informal entry to minimize,
if not fully abate, the illegal importation of used
clothing. When not covered by the appropriate authority
from the Department of Social Welfare and Development
(DSWD) and the Department of Finance, the bureau said
used clothing imports will be deemed commercial imports.
"These goods will, therefore, be subjected to 'ipso
facto' forfeiture in contravention to Republic Act
4653," the BOC noted.
Ukay-ukay consists of used clothing
in machine-packed bale; used clothing in bale, inside
balikbayan boxes and the like; and balikbayan boxes
which have been declared to contain personal effects
but found to contain only used clothing and nothing
else.
The BOC noted forfeited used clothing
will be turned over to the DSWD upon approval of the
commissioner.
