*RP air cargo traffic slows down 5.46% in first half

*Accredited domestic shipping firms sink 13%

*Nine more airlines get CAB nod to impose fuel surcharge

*ICTSI opens dangerous cargo facility at the MICT

*MIAA to float $100M bonds for Clark Airport development

*Shipco inaugurates Makati office

*ATI sees growth in Q2 net income

*PPA opens new passenger terminal in Cagayan de Oro

*Import bill surges due to oil price hike

*American Eagle Outfitters, Blue Star Imports name APL Logistics Ocean Consolidator of the Year

RP air cargo traffic slows down 5.46% in first half

TOTAL air cargo and mail traffic to and from the Philippines declined in the first six months of the year to 137,841,327 kilograms (kg) from 145,808,835 kg recorded a year ago, according to latest data from the Civil Aeronautics Board (CAB).

The 5.46% reduction in the volume of air traffic is attributed by most airlines to what International Air Transportation Association director general and chief executive officer Giovanni Bisignani referred to as the "fifth horseman" - the price of oil.

In the last few months, the price of fuel in the world market has steadily increased, adding up to $1 billion per month to airlines' costs.

First-semester cargo and mail exports reached 80,493,039 kg, and total imports, 4,188,248 kg.

The country's flag carrier Philippine Airlines (PAL), even with the absence of its May and June figures, managed to retain the top spot with 15,417,437 kg. This translated to a 19.47% volume reduction compared with last year's 25,828,227 kg.

The airline's inbound cargoes totaled 10,174,701 kg while outbound hit 10,624,318 kg. PAL and Cebu Pacific were among the first airlines to be granted approval for the imposition of a fuel surcharge.

During the period in review, PAL's import shipments totaled 10,174,701 kg, while its outbound reached 10,624,318 kg.

United Parcel Services (UPS) took second place after transporting a total of 15,417,437 kg, up 7.98% compared with 14,278,675 kg carried during the same period last year.

The courier company saw its outbound shipments decline 20% to 7,697,297 kg from last year's 9,632,873 kg. Inbound increased a whopping 66% to 7,720,140 kg from 4,645,802 kg.

Hong Kong-based carrier Cathay Pacific landed in third sport with total shipments increasing 8.82% to 14,436,673 kg from 13,266,441 kg. Inbound shipments went up 15% to 7,876,463 kg from 6,800,727 kg while outbound rose 1.46% to 6,560,210 kg from 6,465,714 kg.

In fourth place was Singapore Airlines, which carried 11,577,904 kg during the period. This was 32.71% higher compared with 8,724,257 kg last year. Inbound and outbound cargoes totaled 5,953,391 kg and 5,624,513 kg, respectively.

Despite an 11.3% decline in total shipments, Korean Air ranked fifth with 8,862,309 kg from 9,991,360 kg. The airline carried 3,367,535 kg imports and 5,494,774 kg exports.

Thai Airways switched places with Eva Air for the sixth place, with 7,259,216 kg, up 2.68% from 7,069,793 kg. The carrier's imports and exports were at 3,012,029 kg and 4,247,157 kg, respectively.

Eva Air carried a total of 6,772,992 kg, up 11.15% from 6,093,720 kg. Also in the top ten list were: Northwest Orient with 5,533,066 kg, down 25.61% from 7,437,804 kg; Japan Airlines with 4,848,203 kg, down 3.07% from 5,001,911 kg; and Asiana Airlines with 4,192,662 kg, down 13.41% from 4,841,885 kg.

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Accredited domestic shipping firms sink 13%

The Maritime Industry Authority (MARINA) has reported a 13% decrease in the total number of domestic shipping companies it accredited to 225 from January to June this year from 258 last year.

Fifty eight or 26% of the firms were registered by the Central Office (CO) while 167 or 74% were from various Maritime Regional Offices (MRO) throughout the country, the maritime agency noted.

A total of 51 vessels were approved for acquisition during the first semester, 19% lower compared with the 63 vessels acquired during the same period last year.

MARINA noted that 49 or 96% of the vessels were acquired through bareboat chartering or importation, while the remaining two (4%) were locally constructed.

The number of Special Permits/Exemption Permits issued for overseas vessels to temporarily engage in the domestic trade went down 18% to 23 issuances from 28 issuances in 2003.

The number of Certificates of Public Convenience (CPC) issued both by the CO and the MROs, on the other hand, grew 14% to 445 issuances from 439 last year.

Similarly, the Provisional Authority (PA) issued for the semester rose 25%. Special permit issuances also went up 30% to 2,129 from 1,637 issuances during the previous year.

In the overseas shipping sector, MARINA accredited under Memorandum Circular No. 181 (Rules in the accreditation of shipping companies for purposes of acquiring/operating Philippine-registered ships for international voyages under regulation XV of the Philippine Merchant Marine Rules and Regulations, 1997) a total of eight shipping firms, up 13% from last year's six firms.

Accredited firms under MC No. 186 (Rules on the accreditation of maritime enterprise) increased due to the re-accreditation of companies accredited prior to January 1, 2001 upon the effectivity of the circular.

MARINA approved the acquisition of 53 vessels through bareboat chartering from 19 approvals issued during the same period in 2003.

No vessel was acquired through importation under Republic Act 7471 (The Philippine Overseas Shipping Development Act). On the other hand, 80 vessels were registered, up 82% against the 44 vessels registered in 2003.

The number of vessels deleted from the Philippine Registry during the period in review increased 23% to 16 from 13 vessels deleted last year. Special Permits to temporarily engage in the overseas trade were issued to 29 domestic vessels, 36% lower than the 45 vessels given special permits in 2003.

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Nine more airlines get CAB nod to impose fuel surcharge

THE Civil Aeronautics Board (CAB) recently approved the petition of nine more international airlines to implement a fuel surcharge in view of the continuous increase in the price of fuel.

The nine are Malaysian Airline ($6 per sector, effective June 28); Royal Brunei Airlines ($5 per sector for Manila-Bandar Seri Begawan route and $2.50 per sector for Bandar Seri Begawan and beyond routes, effective July 11); Singapore Airlines ($5 per sector, effective July 14); British Airways ($4 per sector, effective July 11).
Vietnam Airlines ($5 per sector on international flights, effective July 20); China Airlines ($7 per sector on international flights, effective July 21); Asiana Airlines ($7 per sector on international flights, effective July 8); Cathay Pacific Airways Ltd. ($5 per sector for short haul and $14 per sector for long haul, effective July 1); and Qatar Airways ($5 per sector, effective July 20).

There are 12 other airlines with pending petitions at the CAB: Qantas Airways ($10.70 per sector on international and $3.90 on domestic); Eva Airways ($6.40 per sector); Air Niugini (10.50 per sector); Saudi Arabian Airlines ($5 per sector); KLM Royal Dutch Airlines ($10 per sector); Korean Air ($7 per sector); Continental ($6 per sector); Kuwait Airways ($5 per sector); Emirates Air ($10 per sector); Gulf Air ($5 per sector); and Air Macao ($2 per sector).

Northwest Airlines, on the other hand, is applying for a $20 passenger fare hike, while Japan Airlines is pushing for a $0.15 fuel surcharge for cargo and a 5% increase in fare rates.

As of May 2004, aviation fuel price has reached $45.71 per barrel compared with only $28.25 per barrel during the same month last year, according to Mean of Platts Singapore.

The nine airlines join 11 others whose applications for fuel surcharge for passengers were earlier given the go ahead. The 11 include Philippine Airlines and the Cebu Pacific Air.

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ICTSI opens dangerous cargo facility at the MICT

INTERNATIONAL Container Terminal Services, Inc. (ICTSI) has opened a control facility for dangerous cargo at the Manila International Container Terminal (MICT) mainly to reinforce compliance to the UN International Maritime Organization's (IMO) International Ships and Port Facility Security (ISPS) Code and the US' Container Security Initiative (CSI).

The Manila International Container Terminal (MICT), the Philippine flagship operation of International Container Terminal Services, Inc. (ICTSI), opened recently the Hazardous Cargo Control Area (HCCA) to reinforce compliance with the International Ship and Port Facility Security Code implemented by the UN International Maritime Organization last 1 July. The HCCA will further ensure the safety, security and proper handling of dangerous goods. Photo shows (left to right) Edgardo Q. Abesamis, ICTSI executive vice president; Francis M. Andrews, ICTSI senior vice president and MICT general manager; Edgardo M. Israel of the Office for Transport Security, DOTC; Oscar M. Sevilla, Philippine Ports Authority (PPA) incoming general manager; and Raul T. Santos, PPA officer-in-charge.

The new facility, the hazardous cargo control area (HCCA), is located at the west side of the MICT in an isolated portion of the terminal. With the HCCA inside the terminal, unnecessary movement of dangerous cargo from the terminal to areas outside of the port zone is prevented. Often, frequent movement of dangerous cargo lead to cargo damage and accidents or worst, loss in transit. The HCCA started operations this month.

Inaugurating the HCCA were ICTSI officials led by Edgardo Q. Abesamis, executive vice president, and Francis M. Andrews, senior vice president and MICT general manager. Also present were representatives from the Philippine Ports Authority led by Raul T. Santos, officer in charge, and Oscar M. Sevilla, incoming general manager.

Guest of honor was Rear Admiral Edgardo M. Israel representing Undersecretary Cecilio R. Penilla, head of the Office for Transport Security, an agency of the Department of Transportation and Communications.

In accordance with the International Maritime Dangerous Goods (IMDG) Code's segregation requirements, the 10,500-square meter HCCA can accommodate 500 full container load containers containing dangerous cargo stacked four rows at two tiers per block.

The HCCA has closed and open storage warehouses to accommodate less-than container load dangerous cargo being handled at the MICT's container freight stations. The facility comes with complete safety and emergency response equipment, including a three-ton forklift truck and a reach stacker.

The HCCA is manned 24/7 by well-trained personnel: six general purpose workers, one reach stacker/forklift operator, two checkers and four security guards. Computer systems are installed for fast and efficient service and real time monitoring of cargo.

The HCCA is seen to boost MICT's security and safety installations in compliance with the ISPS Code and CSI, the company said. Last July 1, the IMO began implementing the ISPS Code, a new anti-terrorism measure requiring all vessels and port facilities to conduct a security assessment, and based on that, implement a security plan and procedures that require flag state approval. CSI, on the other hand, is a US security initiative involving containers bound to the US, which is stricter than the ISPS Code.

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MIAA to float $100M bonds for Clark Airport development

THE Manila International Airport Authority (MIAA) is planning to float bonds worth $100 million to fund Phase 1 of the Diosdado Macapagal International Airport (DMIA) development project in Clark, Pampanga.

Transportation assistant secretary for Planning and Project Development Roberto Castañares said the development is in preparation for the eventual transfer of the international airport to DMIA.

The transportation department said that by 2010, the Ninoy Aquino International Airport (NAIA) will be so congested that it may no longer accommodate the increasing demands for passenger traffic. Airport operations will be transferred to the DMIA.

The recently issued Executive Order 341 ordered the integration of all international airports in the country where MIAA is the lead agency, Castañares said. "The main objective is to provide cross subsidy. NAIA has plenty of resources. NAIA can help develop airports which are not making money," he said.

The NAIA terminal, whose runway cannot carry wide-bodied aircraft, will be converted into a general aviation area.

MIAA general manager Alfonso Cusi will chair the yet-to-be created committee in charge of the bond flotation.

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Shipco inaugurates Makati office

SHIPCO TRANSPORT (PHILIPPINES) INC. recently inaugurated its 241-square meter office at the Mezzanine of the Pac-Atlantic Centre in Makati City.Shipco Philippines is a joint venture company established between Pac-Atlantic Holdings Co. Inc. of the Philippines and Shipco Transport A/S Holding of Denmark. Shipco offers NVOCC, consolidation and deconsolidation services to its customers. Cutting the ribbon at the inauguration were (L to R) Sune Simonsen, Asia Pacific Regional Director of Shipco Transport Inc.; Budjie Garcia, Managing Director of Shipco Philippines; and Ramon de Leon, Managing Director of Pac-Atlantic Group.

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ATI sees growth in Q2 net income

ASIAN TERMINALS INC. (ATI) reported an increase in consolidated net income to P91.3 million in the second quarter from P90.9 million in the same period last year.

The growth was attributed to the reduced operating expenses and a full revenue contribution from its new business unit, the Eva Macapagal Super Terminal.

ATI stressed the company managed to survive the second quarter with positive results despite foreign trade slowdown.

Consolidated revenues from its operations of four of the country's major international seaports and a logistics center fell 1.8% to P880.7 million from P897.3 million in 2003 because of lower import and export trade volumes.

Conservative fiscal policies, however, were implemented resulting in a 3.7% decrease in consolidated operating expense to P658.2 million from P683.8 million. This contributed to an increase in income from operations of P222.5 million for the quarter.

From April to June, ATI handled 161,598 twenty-foot equivalent units (TEUs) at the South Harbor Container Terminal, a 2.9% decrease compared with the same period last year.

At the General Stevedoring section of the South Harbor, non-containerized shipments, particularly steel, also fell 39.5% to 540,885 metric tons (MT).

The Port of Batangas, on the other hand, handled a 20% growth of steel, bulk and bagged rice shipments to 70,258 MT and a 17.7% growth on roll-on/roll-off imports of completely built-up units to 3,569 units from 1,455 units last year.

Improved supply of wheat, soybean meal, soybeans and malt in the world market resulted in increased importations handled at the Mariveles Grain Terminal where volumes surged 27.7% to 396,741 MT.

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PPA opens new passenger terminal in Cagayan de Oro

THE Philippine Ports Authority (PPA) recently opened the first phase of its Cagayan de Oro City Passenger Terminal Complex (PTC) at the Macabalan wharf.

PPA Cagayan port manager Prudencio Mercado said the P25-million facility is 50% complete. Its opening was made necessary with the recent implementation of the International Ship and Port Facility Security code.
The facility is equipped with two separate gates for vehicles and pedestrians. All gates are manned by security marshals and members of the port police force, Mercado said.

"Round-the-clock security men and K9s also man the terminal to ensure security of the port users," he added.
The fully airconditioned terminal has a total area of 2,100 square meters which can accommodate 600 passengers. It features nursing care and ramps for the disabled, parking spaces for public conveyance that can accommodate 80 vehicles, and a separate parking area for private vehicles that can take in 90 vehicles at any given time.

Mercado said that in the past, there was less consideration for the safety and comfort of passengers at sea ports, since port operations were primarily concentrated on cargo handling. "Now, with heightened terrorist threats all over the world, nations have agreed to focus on security measures at ports where the safety of passengers is at the fore," he said.

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Import bill surges due to oil price hike

THE Philippine's import bill registered a growth of 18% to $3.455 billion in the first six months of the year, prodded by notable increases in the price of fuel in the past few months.

This resulted in considerable increases in disbursements made for imported mineral fuels and lubricants, which grew 119.3% to $517.54 million. Its total share to the total import bill was 15% higher than the previous year, the National Statistics Office reported.

Other commodity groups posted increases in import value. Capital goods, including power generating machines, telecommunications equipment, and land transportation equipment except passenger cars and motorcycles, were valued at $1.238 billion, up 7.8% from $1.149 billion previously. They accounted for 36% of the aggregate bill.
Imported raw materials and intermediate goods, including unprocessed raw materials and semi-processed raw materials, rose 4.6% to $1.264 billion from $1.209 billion a year before.

Expenditures for consumer goods grew 7.4% to $246.19 million from last year's $229.43, while special transactions, including articles temporarily imported and exported, rose 79.4% to $189.46 million against the prior $105.62 million.

Electronics and components, the top import item for the month, were valued at $1.431 million, up 6.7% from $1.342 billion year-on-year.

Mineral fuels, lubricants and related materials ranked second, followed by industrial machinery and equipment. The latter's import value went up 18% year on year to $143.13 million from $121.58 million.
In fourth were transport equipment, although value actually fell 17.7% to $108.13 million from $131.51 million during the same period last year.

Textile yarn, fabrics and made-up articles came in fifth even if the June value also fell 7.9% year on year to $96.66 million from $104.90 million.

Rounding up the list of top imports for June were: iron and steel ($76.54 million); telecommunication equipment and electrical machinery ($71.77 million); plastics in primary and non-primary forms ($67.36 million); cereal and cereal preparations ($62 million); and organic and inorganic chemicals ($55.10 million).

From January to June, inbound shipment of goods outpaced gross dollar revenue. Exports in June increased only 8.2% to $3.313 billion. This brought the country's trade balance position to a deficit of $142 million. The deficit reversed the yearago surplus of $132 million. Considering the six months to June stretch, the trade deficit added up to $1.204 billion.

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American Eagle Outfitters, Blue Star Imports name APL Logistics Ocean Consolidator of the Year

BLUE STAR IMPORTS L.P., the import arm of US-based apparel retailer American Eagle Outfitters, has named APL Logistics its Ocean Consolidator of the Year. American Eagle specializes in casual clothing for 15-25 year olds and operates more than 800 retail outlets in the United States and Canada, with sales of $1.5 billion. The retailer said the award stems from "the superb accuracy and reliability of APL Logistics' international consolidation and its supporting information technology and documentation work, which achieved an accuracy rating of 95.8% for the year 2003."

APL Logistics consolidates American Eagle and AE-branded clothing and accessories from some 600 factories in the Asia-Pacific and Central American regions, and manages their shipment to the United States and Canada from more than 21 ports.

"American Eagle measures the performance of its consolidators as part of an evaluation system instituted last year," said Hank Shechtman, Blue Star's executive vice president. "We place tremendous emphasis on efficient and reliable distribution, including consolidation, documentation, and shipping of merchandise. APL Logistics' very strong origin operations in global markets and its IT capabilities are helping us achieve better visibility, cost control and also helping to ensure that the styles and sizes our customers want will be in our stores precisely when needed," he said.

Hans Hickler, chief executive officer of APL Logistics, said, "We share American Eagle and Blue Star's commitment to quality, reliability and a partnership approach to supply-chain management.

"Our people were evaluated specifically on the basis of their ability to consistently fill and manage purchase orders and to provide detailed electronic packing lists to American Eagle in advance of shipment arrival; and for stock-keeping unit accuracy and overall timeliness. Given the complexity of the supply chain - including operations in both Asia and Central America - we are particularly pleased that our support has enabled American Eagle to manage its inventory efficiently," he said.

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