*Local ship operators hike freight rates by 14.5%

*PPA net income up 33% in first semester

*Modernization tops new MARINA chief priority list

*DTI looks at new ro-ro routes for lower transport costs

*ASEAN eyes ocean peacekeeping activities

*New container handling equipment to double Suape Container Terminal's crane capacity

 

Local ship operators hike freight rates by 14.5%

VARIOUS domestic ship operators are set to increase freight rates starting next month, resulting in a total rise of 14.5% by January 2005.

The operators include Aboitiz Transport System Corp. (ATSC) and subsidiary Cebu Ferries Corp., Sulpicio Lines, Lorenzo Shipping Corp. (LSC), Solid Shipping Lines Corp., NMC Container Lines, Inc. and Oceanic Container Lines, Inc.

The freight rate increase will be on a staggered basis, the first part or the 7-9% hike will be implemented starting October 1. The rest of the increase will be implemented effective January 1 next year.

For instance, a Superferry Class A accommodation from Manila to Cebu whose current rate is P857.21, will be P934.36 by October 15 and P981.51 by January 1, 2005. ATSC noted the same percentage increase will apply to the current rates per lane meter for roll-on/roll-off cargoes.

The shipping companies stressed they were constrained to amplify their freight rates due to increases in fuel cost; salaries and wages of sea and land-based personnel including the cost of living allowance; dollar-denominated expenses due to devaluation of peso; financing costs; labor expenses; insurance premiums; repairs and maintenance costs; and cost of pier and vessel security.

The shipping companies started submitting their formal notice of intention to adopt the rate adjustment to the Maritime Industry Authority (MARINA) early September.

Meanwhile, Negros Navigation Company, Inc. (NENACO) has just submitted its formal notice for the freight rate adjustment last week. A source from NENACO said the company is still waiting for some of its existing promos to expire before it can implement an upward rate adjustment.

On the other hand, the shipping firm submitted a formal notice to impose increased passenger rates after its last increase sometime in April this year.

ATSC and Sulpicio Lines are also set to impose an upward passenger rate adjustment averaging 6-12% later this month.

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PPA net income up 33% in first semester

THE Philippine Ports Authority (PPA) recently reported hefty growth in its net income from operations during the first semester of the year. Total income was at P1,120.25 million, up 33% from P917.94 million of the previous year.

This was 4.59% or P155.40 million higher than the target of P1,064.85 million during the six-month period, the port agency said.

From January to June, the agency's net operating income reached P1,333.67 million, up 6.03% (P75.81 million) from P1,257.86 million. The Fund Management Income (FMI), a strong contributor to the overall profit, decreased 3.42% to P121.10 million from P125.39 million last year.

PPA said the drop in FMI was the result of a shortfall in average investments by about P962.70 million to P3,844.37 million from the previous year's average of P4,807.07 million.

Other charges such as interest on loans and losses on revaluation fell 1.18% and 79.59%, respectively. Amortization of deferred charges, on the other hand, went up a 100%.

During the period, the port agency earned a total revenue of P2,704.68 million, 2.62% or P69.03 million higher compared with P2,635.65 million in 2003. This was also 0.58% higher than the P2,689.02-million target for the period.

The positive trend was attributed to the 2.92% increase in port revenue performance to P2,583.58 million from P2,510.26 million. PPA said this, in turn, was due to the impact of foreign exchange on dollar-denominated tariffs; the effect of International Container Terminal Services, Inc.'s (ICTSI) annual increase in fixed fee; and the favorable traffic performance.

Charges which contributed to the increase in port revenue include: port dues (P153.12 million, up 0.59%); dockage at anchorage (P30.01 million, up 6.68%); usage fees (P77.82 million, up 0.17%); lay-up fees (P2.08 million, up 100%); wharfage dues (P599.24 million, up 0.70%); arrastre / stevedoring (P419.02 million, up 3.54%); pilotage fees (P10.71 million, up 21.29%); and ICTSI fees (P919.59 million, up 7.37%).

On the other hand, dockage at berth (P137.59 million), storage (P67.40 million) and other income (P167 million) went down 0.20%, 6.25% and 5.87%, respectively.

On the expenditure side, PPA reported a positive performance as total expenses fell 13.58% (P233.28 million) to P1,494.43 million from P1,717.71 million. The actual expenditure for the period was 8.60% lower compared with the P1,624.17-million target.

This was due to non-incurred projected expenses in other administrative expense, dredging costs and depreciation charges. Operating cost components such as personal services and repairs and maintenance went down 2.56% and 19.39%, respectively.

Non-operating expenses also went down P2,582 million or 48.53% to P239.49 million from P465.31 million due to the implementation of the revised guidelines on the revaluation of foreign loans and other foreign currency transactions.

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Modernization tops new MARINA chief priority list

NEWLY appointed Maritime Industry Authority (MARINA) administrator Vicente T. Suazo, Jr. has positioned modernization at the top of his list of priorities for the development of the Philippine maritime industry.

In an interview, the new chief who replaced Oscar M. Sevilla, now the Philippine Ports Authority (PPA) general manager, stressed modernization, which includes total refleeting of Philippine vessels, would eventually lead to economic development.

"It is a good thing the former administrator has left an even ground for me to pursue the previously identified issues and concerns in the shipping industry," Suazo said.

Suazo has identified three other preliminary thrusts needed most by the industry: improving the capability and competence of local shipyards; making the best of Philippine maritime schools; and improving the capacity of domestic shipping companies.

These, he said, are just initial plans as he is still in the stage of familiarizing himself with the ins and outs of the industry. A concrete outline of his plans and programs will be released next month.

Suazo, a former assistant general manager for Operations at PPA, also emphasized the seemingly lack of coordination between the maritime agencies in the past. "Under this administration, we will see to it that MARINA will be closely coordinating with concerned agencies such as the PPA and the Philippine Coast Guard," he said.

He added coordination will particularly focus on new technologies affecting the development of the maritime industry and matters concerning vessel operations.

In addition, he is planning to find other sources of revenue to help ease the country's budget deficit. A database of all vessels in the country is also being worked at.

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DTI looks at new ro-ro routes for lower transport costs

NEW and more viable roll-on/roll-off (ro-ro) routes are being identified by the Department of Trade and Industry (DTI) to further slash transportation costs, particularly for basic commodities.

A study commissioned by the Japan External Trade Organization, in coordination with DTI, has pinpointed at least 12 new connections which will be in direct linkage with the Road Ro-Ro Terminal System (RRTS). These are: Bacolod City-Negros Oriental; Baac, Marinduque-Lucena, Quezon; Abra De Ilog, Mindoro Occidental-Batangas City; Donsol, Sorsogon-Aroroy, Masbate; Maasin, Leyte-Ubay, Bohol; Manapla, Negros Occidental-Ajuy, Iloilo; Samar Island-Davao City; Ternate, Cavite-Mariveles, Bataan; Atimonan, Quezon-Alabat island; Mambajao,Camiguin-Jagna,Bohol; San Pascual (Burias island), Masbate-San Narciso, Quezon-Pasacao, Camarines Sur; and Caticlan, Aklan-Semirara island, Antique-Bulalakao, Mindoro Occidental.

DTI said the plan is to pass an executive order (EO) to complement EO 170, issued in January this year, that will create alternative new routes and expand the coverage of the Strong Republic Nautical Highway (SRNH).

Under EO 170, moving cargoes are not charged cargo handling and wharfage fees. DTI is hoping hat with the proposed EO, it will be able to further promote efficiency in the delivery of vegetables, fish, meat and canned goods which will, in turn, reduce transport and delivery costs.

The draft EO will be submitted to different stakeholders such as the Philippine Ports Authority and the Maritime Industry Authority for comments and recommendations.

Presented at the recent National Price Coordinating Council meeting, the draft aims to encourage private non-commercial port operators to commercialize their operations and open their wharves for ro-ro use.

"Ro-ro shipping routes have lower rates in freight cost and terminal fees. Because of this, the total transport cost under the RRTS is only P9,175 compared to the Class C rate for lift-on lift-off routes which is P13,152.23," DTI pointed out, a 30% reduction in shipping costs.

Federation of Philippine Industries chair Meneleo Carlos Jr. said the proposal is in line with government's thrust to keep the prices of basic goods and prime commodities stable through intervention in the supply chain. Carlos is a member of the special task force for cost structure, a component of the DTI's Alternative Packaging Program.

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ASEAN eyes ocean peacekeeping activities

MEMBER countries of the Association of South East Asian Nations (ASEAN) are looking at establishing regional cooperation at sea through ocean peacekeeping activities.

The proposal to include peacekeeping as part of the activities of the ASEAN security community was prompted by ever-increasing threats at sea and their possible repercussions for security on land.

Given increasing threats at sea, it is vital that the region of South East Asia, in particular, initiate multilateral arrangements that specifically address common maritime problems - in the form of ocean peacekeeping," earlier reports said.

Such problems include environmental protection, smuggling, safety navigation, maritime piracy and, most importantly, terrorism.

The same strategy is already in place in the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines-East Asia Growth Area) - only a small portion of the Asian region.

Ocean peacekeeping involves international cooperation between regional navies and maritime enforcers to conduct surveillance activities to protect the sea from becoming fertile ground for attacks.

The proposed ocean keeping activities of the ASEAN countries may be accomplished through regional arrangements or a memorandum of understanding.

In the Philippines, the Maritime and Ocean Affairs Center (MOAC) of the Department of Foreign Affairs, has already sought the input of concerned agencies and private organizations on the proposal. These include the Philippine Coast Guard, Philippine Navy, Maritime Industry Authority (MARINA), Philippine Ports Authority, Department of Justice, Philippine Center in Transnational Crime, Maritime Training Council, Filipino Shipowners Association, National Security Council, Philippine National Police-Maritime Group, National Defense College of the Philippines, Office of the Special Envoy on Transnational Crime and Department of Transportation and Communications.

In a letter to MOAC secretary general Alberto Encomienda, MARINA expressed support for the endeavor. The agency said the proposal is especially necessary now that the International Ship and Port Facility Security code is in place.

The maritime agency said it will closely coordinate with the DOTC-Office of Transportation Security to make the Philippines visible in this regional initiative.

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New container handling equipment to double Suape Container Terminal's crane capacity

TECON SUAPE, S.A. (TSSA), International Container Terminal Services, Inc.'s (ICTSI) Brazilian unit operating the Suape Container Terminal (SCT) in Pernambuco, Brazil, recently awarded a contract to winning bidder, Shanghai Zhenhua Port Machinery Co., Ltd. (ZPMC), of China for the purchase new container handling equipment.

"The order for two post-Panamax quay cranes (QCs) and two rubber-tired gantries (RTGs) is a major investment, which will strengthen our position as one of Brazil's leading container terminals," said Sergio Kano, TSSA chief executive officer. "The new container handling equipment will boost SCT's crane capacity twofold," he added.

The cranes will be fully erected and tested in China before making the journey to Suape. The contract consolidates QCs and RTGs in a single package to minimize transportation and administrative costs.

"The fully erect delivery was an important consideration in the selection process. The SCT is experiencing massive growth, and every portion of our terminal is utilized for container operation with little space for erecting cranes," Kano explained.

The post-Panamax QCs are capable of servicing the world's largest vessels, having an outreach of 47.5 meters up to 18 containers wide with a lift height of 36 meters above the quay. High speed, state-of-the-art AC drive systems are provided for each of the main motions to reduce maintenance and increase productivity.

Special features, such as remote crane condition monitoring, will provide real-time feedback of the crane system status, and enable port technicians to diagnose potential faults from a computer monitor in the maintenance office.

SCT is already equipped with an advanced communication network, which permits use of this technology through a fiber optic and high-speed radio signal infrastructure.

The cranes also have a high lifting capacity of 65 metric tons to reduce overall cycle times, enabling the lifting of two fully loaded containers simultaneously.

The RTGs use similar technology, and have the capability to increase yard capacity through one-over-five-high stacking and six containers wide plus a roadway. TSSA worked closely with ZPMC to introduce advanced diesel engine condition monitoring, extended oil change intervals and lower exhaust emissions.

The new equipment is expected to be operational by the last quarter of 2005.

To date, SCT has two Panamax QCs and two RTGs.

New tax incentives introduced by the Brazilian government and closer trade partnerships with Chinese companies have given TSSA the confidence to move forward with this long-term investment. Export trade from Brazil has also surged during the past year.

The SCT was the first Brazilian port to be compliant with the UN International Maritime Organization's International Ship and Port Facility Security Code, and has already achieved ISO 9001 certification.

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