TWO companies - international shipping line
American President Lines (APL) and international logistics
operator Schenker - are looking at expanding their Philippine
operations.
APL is actively watching activities in Mindanao and is upbeat
over its potential.
"We are looking at Southern Philippines for growth. Based
on our observations, there is huge growth in the area in terms
of cargo volume particularly export products such as bananas,"
APL regional operations director Cecile Bitare told port users
and other industry stakeholders during last week's Asia-Pacific
Economic Conference summit on intermodal transportation.
Targeted as destination for APL direct calls are General Santos
(Makar Wharf) and Davao (Sasa Wharf).
Other international carriers which are members of the Association
of International Shipping Lines are also keen on expanding
their operations in Southern Philippines provided proper port
facilities are in place, Bitare revealed.
She said APL should have boosted its operations in southern
Philippines three years ago if not for the area's poor port
facilities. She said that to date, APL continues to deploy
self-sustaining vessels to pick up cargoes in the region.
"We all know ports in Southern Philippines lag behind
ports in Metro Manila such as that operated by International
Container Terminal Services, Inc. We are working to have some
ports upgraded to accommodate bigger traffic and larger vessels,"
Bitare said.
Specifically, there is clamor by international shipping lines
for additional and more sophisticated quay cranes and deeper
draft in the area.
The Philippine Ports Authority said port upgrades are forthcoming
in Southern Philippines particularly Davao, General Santos,
Iloilo, Zamboanga and Cagayan de Oro. These ports are included
in the list of 10 which need to be upgraded to international
standards by 2010.
Cargo traffic in the region has shown a steady increase. Sasa
Wharf in Davao alone handled 2.71 million metric tons of cargo
in 2003. The figure grew to 2.95 million metric tons in 2004
then to 3.28 million metric tons in 2005. Ship calls also
increased from 1,206 in 2003 to 1,321 in 2004 and 1,343 in
2005.
The General Santos port, however, showed a slight decline
from 2003 to 2004 but has improved in 2005. In 2003, it handled
1.74 million metric tons of cargo and accommodated 1,113 vessels.
In 2004, cargo handled dropped to 1.55 million metric tons
while ship calls were at 1,020. Last year, cargo volume was
at 1.6 million metric tons despite lower ship calls at 960.
Schenker, CPI arrangement
Schenker and CPI Transport, Inc. recently just signed an agreement
that Schenker will take over the operations of CPI by January
2007. For almost 20 years, CPI has been
the partner for Schenker in the Philippines.
The activities of BAX Global in the Philippines will also
be integrated into Schenker.
The agreement was signed by Karl-Heinz Matthes, Regional Director
Asia Pacific, Schenker AG, and CEO Asia Pacific of the joint
Schenker and BAX organization, together with Patrick Chen,
Chairman & CEO CPI.
"This is another very important step forward for the
Asia Pacific organization of Schenker, to have a comprehensive
owned network in all markets", said Karl-Heinz Matthes.
"We thank Patrick Chen and his team for their excellent
support over the past decade and are very grateful to them
for establishing Schenker as a leader in the Philippine logistics
market."
CPI started its international freight forwarding activities
in 1982 and signed an exclusive agency agreement with Schenker
in 1988. The company has since grown into a very important
and strong partner of the global Schenker network. With its
180 employees in the Manila area and Cebu, CPI provides the
complete range of international forwarding (airfreight, seafreight,
local distribution) as well as project business, household
removals, warehousing and brokerage.
BAX Global has been operating its own offices in the Philippines
(Manila and Cebu) since 1995 and is very active in international
freight forwarding as well as supply chain management (including
warehousing, vendor management inventory solutions and value
added services). With a workforce of 340 people and 6,800
square meters of warehouse/logistics facilities, BAX Global
is supporting a number of major global, regional and local
accounts in the Philippines.
The activities of the two companies, BAX Global and CPI, will
be merged into one company which will then operate under the
name Schenker. The integration process is planned to be finished
by end 2006 and the new company is scheduled to operate from
January 2007.
The new company will have a workforce of over 500 employees
and a revenue of more than P3 billion (approximately US$60
million) and will offer the complete range of integrated logistics
services, international freight forwarding (airfreight/seafreight),
supply chain management solutions including warehousing, distribution
and value-added
services as well as project cargo, brokerage and household
removal services.
With the combined strengths and expertise of Schenker, BAX
Global, and CPI, the new Schenker organization in the Philippines
will be among the top five logistics providers in the country.
"We will drive to become the Number 1 in the Philippine
market," added Schenker's new Managing Director for the
Philippines, Reiner Allgeier.
Davao, Batangas to get their own vessel
traffic monitoring system
THE Philippine Ports Authority (PPA) will
install a vessel traffic monitoring system (VTMS) in Davao
and in Batangas next year. This is expected to enhance vessel
safety in both areas and boost PPA revenue.
PPA general manager Oscar Sevilla said his agency is now studying
requirements of the VTMS for the two areas.
The PPA will spend P300 million for the Batangas VTMS and
about P190
million for the Davao system.
The Batangas project is more expensive due to geographical
obstruction offered by some islands, some of which are about
400 meters above sea level. The project includes acquisition
of four radars and covers Batangas Bay and Balayan Bay.
The Davao project involves simple installation of two radars.
PPA expects to start bidding for the two projects before year
end.
Recently, the PPA implemented the P194-million VTMS project
in Manila, which includes two radars that covers Manila Bay
up to Corregidor Island in Bataan. As part of the project,
PPA built a six-storey control center building in the North
Harbor, including a 42-meter steel tower and radar station.
PPA has since been charging fees for ships covered by the
radars, with the exception of small ones.
PORT operator International Container Terminal
Services, Inc. (ICTSI) has dropped plans to revive its cargo
railroad operation in and out of its flagship terminal in
Manila, a move intended to solve congestion problems.
Francis Andrews, ICTSI senior vice president and general manager
of the Manila International Container Terminal (MICT), said
such an operation may not be viable because of the high charges.
"It all came down to economics. We can run a train and
lose money but that's not the name of the game. The railroad
system has to make money," he said.
Reviving the railway plan could help decongest traffic in
and around the MICT, which handles about 1.2 million twenty-foot
equivalent unit containers a year.
The plan involves box trains servicing the MICT at least four
times a day. But there are just too many attendant problems
to the plan, including maintaining the railroad stations at
both ends and making sure the tracks are clean of settlers,
Andrews said.
Also shipping firms may not be able to shoulder the high freight
cost and are also unwilling to subsidize. "Shipping lines
don't want to subsidize a railroad," he said.
Container trucks are being blamed by transportation agencies
as the main cause of traffic in Metro Manila, and also the
reason for poor road conditions.
To decongest the port areas, the Philippine Ports Authority
has built the Batangas port as an alternative facility especially
for shippers from southern Luzon and the Visayas. The facility
is being temporarily operated by ICTSI competitor Asian Terminals,
Inc., which also operates its own terminal in Manila.
The Batangas port is, however, not performing as well as expected
due to infrastructure problems. Shippers are still choosing
to ship in and out of Manila ports for fear of shipment delays.
PPA has blamed itself for this situation, having been unable
to install the $2-million equipment needed to boost cargo
traffic.
ECONOMICS and inadequacies in infrastructure are making intermodal
transportation in the country presently unviable, according
to International Container Terminal Services, Inc. general
manager Capt. Francis Andrews.
In a panel discussion during the Asia-Pacific Economic Conference
summit on intermodalism, Andrews said the existing infrastructure
will not be able to support intermodalism.
"It is not viable in the Philippines. We all know that
infrastructure upgrade is not in high priority here as evident
in the existing port system in the country," he stressed
to port users, transport executives and other industry stakeholders
at last week's Asia-Pacific Economic Conference summit on
intermodal transportation.
He added that economics also plays an important role in the
success of the system as using such a scheme would mean higher
rates to ensure a respectable return on investments. The rates,
according to Andrews, will double existing trucking rates
which, he believes, shippers are not prepared to pay.
"Proper infrastructure and economics should work hand
in hand to have the cargo in the country move in a more efficient
manner," Andrews stressed.
A few years ago, ICTSI adopted intermodalism with the introduction
of a container railway operation to Laguna to improve movement
of cargoes from Manila to Southern Philippines and vice versa.
The scheme was stopped due to low cargo volume. ICTSI found
itself charging high rates to sustain operations, that included
track maintenance. The situation could not survive competition
from lower-charging trucking companies.
"Until infrastructure is put in high priority and the
country's economy becomes more stable, intermodalism in the
country will not be viable," Andrews said.
