RP air cargo volume growth seen at 10-15% this year
PROSPECTS are bright for the Philippine air
cargo industry this year, with volume growth projected at
between 10% and 15% despite a contraction in electronic product
shipments, said Global Carriers Council, Inc (GCCI) president
Rene Banzon.
In an interview at the sidelines of the GCCI Awards last week,
Banzon told PortCalls much of the growth will be supplied
by the electronics and garments sectors.
Potentially lucrative markets, on the other hand, are China,
Japan, Malaysia, Korea.
Local players relying heavily on the US and European markets
will take a hit as the two markets slow down, he said.
“The slowdown in the US and Europe economies has really
affected growth in the air cargo forwarding industry. Airlines
are now concentrating on regional operations where the market
is better,” Banzon explained.
Worldwide, Asian markets will figure prominently this year
and the next, thanks for the most part to China’s unprecedented
economic growth.
The region will see double-digit growth in the low to mid
range, Banzon said, adding that this will help offset losses
of carriers in the long-haul market.
“The long-haul market is contracting a bit this year…
also in 2008, (but) regional markets like China, India, Korea,
Malaysia and even Japan will really overshadow the long-haul
market as evident in their strong performance in the past
few months (with) growth of more than 10%,” Banzon said.
Earlier, the International Air Transport Association (IATA)
said freight volumes would grow at an average growth rate
(AAGR) of 4.8% also to be propelled by regional markets.
It said the Asia-Pacific is expected to lead freight growth
with an AAGR of 5.4% over the period where seven of the top
ten freight markets are in the region: China with AAGR of
10.8%, India with 8.3%, Korea (8.2%), Vietnam (7.5%), Sri
Lanka (6.8%), Pakistan (6.7%) and Malaysia (6.2%).
The Middle East will have the second highest growth at 5%.
The fastest-growing Middle Eastern markets are expected to
be Qatar (6.9%) and Saudi Arabia (6.2%).
The US and European markets, IATA said, will continue its
slow performance.
THE Subic Bay Metropolitan Authority (SBMA)
has deferred the privatization of the Naval Supply Depot (NSD)
to next year until the New Container Terminal 1 (NCT 1) is
operational in the first quarter of 2008.
“We have to defer privatization to next year despite
earlier announcements to go with the process ahead of the
full transfer to NCT 1 since all cargoes are still concentrated
on the depot… The new terminal is not yet ready to accept
cargo,” SBMA seaport chief Capt. Perfecto Pascual told
PortCalls.
Once NCT-1 is fully operational, Pascual the NSD privatization
process will be jump started even if it coincides with the
privatization of another facility, the NCT-2.
Pascual also said no major changes will be introduced to the
terms of reference (TOR) of the NSD despite the suspension
of the privatization process.
According to the TOR, private sector developers, including
foreign proponents, will be allowed to bid for the depot and
convert it into a general cargo center.
The winning bidder should commit to operate and develop the
area for 25 years and pay minimum rentals. The SBMA is entitled
to a share of the revenues.
The facility is able to handle approximately 100,000 TEUs.
The privatization of the NSD is part of the SBMA modernization
program to complement operations of its two new container
terminals completed earlier this year.
In the first nine months of 2007, SBMA posted an increase
in cargo throughput after registering negative to flat growth
in the last two years.
Seaport Department records showed that Subic handled 1,156
metric tons of cargo from January to September this year,
with ship calls totaling 1,101 in the first three quarters.
Imports made up the bulk of cargo handled at 3,027 TEUs out
of the 5,738 TEUs handled from January to September 2007.
Last year the Port of Subic handled cargoes totaling 34,601
TEUs, with imports consisting 17,109 TEUs.
ANGELITO E. Colona, managing director of
the Eagle Express Group of Companies, won last week’s
prestigious Lifetime Achievement Award from the Global Cargo
Carriers, Inc (GCCI).
GCCI is the national association of cargo carriers operating
in the Philippines.
The event, held at the Sofitel Philippine Plaza, was attended
by hundreds of air cargo professionals.
Colona is currently president of the Port Users Confederation.
He is an old industry hand, having been elected president
at one time or another of the ASEAN Freight Forwarders Association,
the Philippine International Seafreight Forwarders Inc and
Aircargo Forwarders of the Phils Inc.
The Forwarder of the Year award went to two companies —
Nippon Express Philippines and DHL Global Forwarding.
Koichi Tomita, president of Nippon Express, received the award
on behalf of his company.
The award for Best in Airfreight Management and Transport
and Equipment Management – Diamond Category went to
Expeditors Philippines, Inc. The award was received by officials
Matthew Factor, Maricar Malonzo and Erwin Bucsit.
The plum for Best in IT and Communication – Diamond
Category went to Kuehne & Nagel, Inc. Company president
Andrew Walker and airfreight manager Malou Caballas received
the plaque.
The Best in Logistics and Warehousing Facilities – Diamond
Category award was given to Schenker Philippines, Inc. Mike
Gavino, Cris Villanueva, Tess Raposas, Christian Pascual and
Rocky Tolentino represented the Schenker Phils management
at the ceremonies.
Angelito E. Colona, managing director
of the Eagle Express Group,
receives his GCCI Lifetime Achievement Award.
SHIPYARD operator Keppel Philippine Marine,
Inc. (KPMI) posted a 57% jump in revenues to P752.8 million
for the first nine months of the year due to the strong performance
of its shipbuilding and fabrication business.
In a report to the Philippine Stock Exchange, KPMI said shiprepair/conversion
activities contributed 47% to total revenues and shipbuilding/fabrication
activities, the rest.
Foreign vessels accounted for almost 50% of shiprepair revenues.
Third-quarter operating profit of P90.2 million was up 147%
compared to last year due to higher revenue generated this
year.
Investment and net interest income, on the other hand, went
down from P14.7 million in 2006 to P12.4 million this year
due to higher loss on foreign exchange transaction for the
period.
Shares from associated companies grew P7 million or 79.8%
due to the higher contribution of Subic Shipyard and Engineering
Inc. and Consort Land, Inc.
Net profit for the quarter was at P95.6 million or 126% higher
than the figure posted a year earlier.
KPMI sees attractive local opportunities brought about by
the required phase out of single-hull tankers. This development
will mean more hull conversion projects for the company.
Aside from hull conversion, KPMI is also banking on offshore
rig construction as drilling contractors are expanding their
fleet or upgrading older units in the light of record high
day rates for rig charter.
KMPI expects sustained demand for offshore floating production
units and offshore support vessels over the next few years.
KPMI operates three shipyards in the country — in Cebu,
Subic and Batangas.
PHILIPPINE shippers are batting for the issuance
of an executive order (EO) that will revise certain policies
to further reduce import and export cost, a move seen to cushion
the impact of the strong peso.
“There is room for further cost reduction aside from
the reduced wharfage fee and container scanning fee,”
National Competitiveness Council and Federation of Philippine
Industries chair Meneleo Carlos recently said.
Based on their estimates, Carlos said Philippine shippers
could save up to $326 per container if the government allowed
certain shipping practices and ordered a revision to policies
such as those related to domestic transshipment and empty
containers.
Based on the proposed EO, chassis-container (Cha-Ro) should
be declared as part of the roll on-roll off (ro-ro) service
to allow export/import containers to be transhipped domestically
through ro-ro vessels at a lower cost.
There should also be a provision on the repositioning of empty
containers and simplification of documentation in the terms
of trade for cargoes originating from Cebu, Davao or other
outports.
In addition, the 90% discount on wharfage fee should be extended
for another year to further cushion the impact of the strong
peso on exports.
“The cost of shipping a container to and from the Philippines
is really at the high-end but is still comparable with its
Asean neighbors. We just have to make some adjustments for
us to be more competitive,” Carlos explained.
The EO should also order the acceleration of development for
ports servicing the Central Nautical Highway to complement
ro-ro highways, he said.
All roads that form part of the Road Ro-Ro Terminal System
or the Strong Republic Nautical Highway should also be declared
as national roads under the jurisdiction of the Department
of Public Works and Highways.
The Philippines is trailing behind its neighbors in trade
logistics competitiveness due to the country’s costly
export and import charges.
In a study released by the World Bank about two weeks ago,
the Philippines ranked second behind Malaysia with the highest
export cost.
THE Bureau of Customs (BOC) has ordered a
close watch on the PTT Philippines Corp Subic Bay depot following
a suspension order brought about by the company’s non-payment
of tax deficiencies.
PTT failed to settle its P352-million obligation on the BOC-set
deadline of November 15. This prompted the bureau to issue
an order holding all pending PTT shipments under Section 1508
of the Tariff and Customs Code of the Philippines.
In October, PTT paid P118 million under protest.
“We are coordinating very closely with (Subic Bay Metropolitan
Authority) Freeport authorities on the matter. So if they
(PTT) want to resume operations, they should pay,” Customs
commissioner Napoleon Morales said.
The BOC Post Entry Audit Group (PEAG) and the SBMA jointly
reviewed PTT’s shipments for the last three years. Including
surcharges and penalties, they found tax deficiencies amounting
to P4.2 billion.
Cash and non-cash collections of BOC-Subic reached P4.44 billion
as of September this year. Cash collections jumped to P1.12
billion in the third quarter compared to P819.9 million in
the same period last year due to large payments of overdue
accounts by oil companies, such as Tri-Solid and PTT.
THE Mindanao Federation of Shippers Association
(Minfesa) wants local and international carriers to deploy
larger vessels to Mindanao and make Mindanao Container Terminal
(MCT) their hub in the South.
In a document provided to PortCalls, Minfesa said Mindanao
shippers are unable to benefit from economies of scale as
operators only deploy container vessels of about 2,000 gross
registered tons or around 250-TEU capacity. Given this situation,
the group said it is not surprising that domestic freight
rates are high.
It added that the Phividec Industrial Authority should also
aggressively promote the MCT to shippers and shipping lines
and offer a lower tariff.
“…domestic shipping lines should deploy a bigger
vessel with a capacity of more than 1,000 TEUs to reduce the
unit cost of the cargo. If the unit cost will be reduced coupled
with cargo consolidation, freight rates will definitely go
down,” Minfesa stressed.
“Local shipping lines should also consider entering
into a joint venture with foreign lines and use the latter’s
bigger vessels with capacity of at least 1,000 TEUs for the
Manila-Cagayan de Oro route,” the group said.
