NMC, Lorenzo disinterested in livestock
trade
CITING the lack of waste disposal facilities in their port
of calls, sister firms National Marine Corp (NMC) and Lorenzo
Shipping Corp said they are not interested in taking up the
slack left by Solid Shipping Lines (SSL) which stops its livestock
service by end-April.
“We are not interested in such cargo,” NMC president
Roberto Umali in an interview said. “It is a profitable
business but we are not ready right now,” he added,
noting that livestock cannot be shipped with other commodities.
Umali said NMC vessels may only accommodate processed goods
or those in reefer vans.
“We will just concentrate on carrying goods from our
key markets such as manufactured goods and raw materials,”
he explained.
With both NMC and LSC out of the picture, Mindanao livestock
traders have only three carrier choices — Sulpicio,
Oceanic and Gothong.
The pullback of SSL from the trade is a blow to the Southern
Mindanao livestock industry. SSL, the only shipping line that
offers direct livestock services to Mindanao, handles 70%
of the country’s livestock shipments.
Earlier 2GO, the logistics arm of shipping giant Aboitiz Transport
System, also made known its disinterest in carrying livestock,
citing the same reason given by NMC.
The Philippine Shippers Bureau (PSB) has called on carriers
to accommodate the SSL traffic to avoid disruption in the
supply chain. The agency claimed livestock deliveries, particularly
from General Santos to Manila and vice-versa, face delays
of 15-20% if there are no other carriers that will offer direct
services.
In January, SSL stopped its livestock service to prevent pollution
scrutiny from the Bureau of Quarantine. In February though,
SSL reopened its service to accommodate the request of the
Department of Agriculture to give shippers time to look for
alternatives. The present service ends April 30.
“By May, our livestock operations will cease in all
our port of calls. We urge our shippers to look at other carriers
to accommodate their cargoes,” SSL said. “Instead,
we will only concentrate in carrying cargoes from the dry-goods
sector and agricultural products such as rice and corn,”
it added.
EO 712 implementation will cut trucking
overhead cost by 20%, says CTAP
THE implementation of Executive Order 712 which
adopts the uniform ticketing system for traffic violations
and synchronized truck ban, among other measures, will save
the trucking industry more than 20% in overheads and reduce
downtime eventually resulting in faster transit of cargoes,
according to Confederation of Truckers Association of the
Philippines (CTAP) president Col. Rodolfo De Ocampo.
“(The EO should not only be implemented) in the 17 cities
and municipalities of the Metro (but) should also be implemented
in nearby provinces such as the Calabarzon area to spread
the benefits,” De Ocampo told PortCalls.
The CTAP president is, however, worried over the implementation
details, noting that the implementing rules and regulations
(IRR) have yet to be released. The EO is already effective
on March 26, 2008.
As of this writing, it is also not clear which government
agency will craft the IRR, although de Ocampo said this should
be job of the Department of Transportation and Communications.
Earlier, the CTAP president said a uniform truck ban is more
beneficial to truckers than the recent 10% toll fee cut at
the South Luzon Expressway.
He said the unsynchronized ban is the culprit behind high
trucking rates and long transit time for goods; it is also
subject to the whims of the apprehending authority.
Most trucks are generally banned from main Metro Manila thoroughfares
from 7am to 9am and from 3pm to 9pm.
However, this early, six mayors from the cities of Makati,
San Juan, Manila, Navotas, Taguig and Pasay expressed opposition
to the EO. They say the EO runs counter to the local government
code which gives them the power to manage traffic within their
area of jurisdiction.
THE Philippine International Seafreight Forwarders
Association (PISFA) has downgraded prospects for the sea freight
forwarding industry this year from optimistic to cautious
due to the deterioration of the US economy and the country’s
political turmoil.
PISFA president Dexter Yu told PortCalls forwarders have been
feeling the effects of the potential US economic recession
since last month, with exports to the US dropping. The United
States is the country’s largest export market.
He said some companies, specifically those from the garments
sector, have started to relocate to other countries which
they feel offered more protection for their business.
“We are taking a cautiously optimistic (stand) right
now with the onset of a full-blown US recession,” Yu
explained.
“Although we continue to be optimistic for modest growth
this year, the percentage is really dependent on what will
happen to the US,” he said.
“The current political instability in the country, although
not expected to affect businesses just like in the past, is
also seen to further drag down growth since it will affect
the overall outlook of possible foreign investors,”
he added.
Worrisome exports
While the country’s merchandise exports grew 6.4% to
$4.24 billion in January, the increase pales in comparison
with the 27% growth recorded in January last year.
Electronics, the country’s major export product, posted
a 1.6% year-on-year growth to $2.61 billion in January. But
last year, a 14.5% increase was reported.
“Exports have really started to go down; if the current
trend in the US continues we expect exports to continue plummeting,
really affecting our forecasts this year,” Yu said.
Earlier, the PISFA president said the US recession could in
fact bring in larger cargo volume and better growth for seafreight
forwarders, noting that shippers may turn to sea shipping
from air to take advantage of lower freight rates.
THE Philippine Ports Authority (PPA) posted
higher earnings last year despite the fast appreciation of
the Philippine peso that affected its earning capacity on
dollar-denominated tariffs.
Its 2007 net income, however, dropped 18.96% to P2.40 billion
from the previous year’s P2.97 billion but exceeded
the target of P1.74 billion by P658.81 million or 37.67%.
The PPA registered a 6.4% increase in port revenues last year
to P6.12 billion from P5.77 billion in 2006 due to much activity
in ports particularly in Mindanao and the hike in tariff rates.
Versus target, the 2007 port revenue is P232.41 million or
3.95% more than the P5.88-billion goal.
The PPA explained that while revenue from domestic vessels
fell short of target due to the conservative growth of domestic
traffic, revenues from foreign vessels showed strength due
to an increase in foreign traffic.
Northern Mindanao on a roll
In a report, the PPA said 80% of the revenues were derived
from government ports and 20% from private ports. Northern
Mindanao ports recorded the highest revenue growth rate at
36.18%.
Port dues and dockage fees, which were estimated to decline
by 2% due to the strong peso performance against dollar, actually
increased 7.05% buoyed by the impact of increase in traffic
volume.
Similarly, revenue on government share from arrastre and stevedoring
and fees from port operator International Container Terminal
Services, Inc grew 8.64% and 1.81%, respectively, despite
the effects of the foreign exchange rate.
PPA expenses, however, ballooned 25.96% to P3.83 billion from
the previous year’s P3.04 billion due to the accelerated
expense on repair and maintenance projects, the high cost
of utilities and services and other depreciation charges.
Non-operating expenses increased to P277.53 million, mainly
consisting of interest charges on foreign loans and extraordinary
losses.
Higher expenditures
Expenditures during the period were lower than the projected
amount by P461.77 million or 10.74% due to unincurred projected
operating expenses such as administrative cost and maintenance
dredging.
Fund management income (FMI) dipped 50% or by P120.94 million
to P125.07 million from P246.01 million last year as a result
of the decline on the interest income yield and lower investible
fund during the period.
The FMI was also short of target by P35.37 million or 22.05%.
The country’s cargo throughput increased 6.4% last year
to 163.75 million metric tons (mmt) from 153.90 mmt a year
earlier. The figure is 1.4% higher than the PPA growth forecast
of at most 5% from 2007-2010.
Arrival of $8M floating docks signals full
commercial operations for Subic Dock
SUBIC BAY—Local ship repair service
provider Subic Dock Corp has commenced full commercial operations
with the recent arrival of two of its floating dry docks worth
$8 million.
Subic Dock has been on soft operations since October last
year with clients mostly from sister firm Salvtug, a local
vessel-salvaging operator, and the US naval fleet. Its facilities
are berthed at the Approach Pier, Bravo Wharf in Subic Freeport.
In a familiarization tour last week, Subic Dock president
Catalino Bondoc said the company expects to sign up spillover
clients that other shipyards are unable to accommodate. Shipyards
and repair facilities around the world are working overtime
to address record newbuilding orders until 2012.
“Our vision is to be a world-class provider of ship
repair, overhauling, installation, fabrication, port general
services and to be one of the leaders in the Philippine ship
repair industry,” Bondoc said.
“Hopefully, we can increase the number of vessels being
serviced by the yard to about 25 by end of the year as we
continue to evaluate if there is an immediate need for expansion,”
he added.
Subic Dock’s floating drydocks are the AFDM-5 with an
18,000-ton lift capacity and AFDL-21 with a 1,000-ton lift
capacity. Both were inspected by Registro Italiano Novale
(RINA) Society of Italy, and are covered under a 2001 Certification
of Compliance, meeting RINA rules on construction and classification
of floating docks.
Aside from the docks, the facility boasts crane capability
of up to 100 tons, including a 100-ton floating derrick crane
and all the necessary shop facilities and equipment for its
varied operations and services.
Besides drydocking and general services, Subic Dock also offers
comprehensive ship repair, conversion and construction; engineering,
mechanical and electrical repair; tugboat and barging services;
non-destructive testing; welding services; painting and coating
services; structural fabrication and layout; manufacturing
and machining; component refurbishment; valves-in shop services;
shipboard mechanical and component and valve repairs; governor
and injector services; internal combustion engine services;
hydraulic services; piping system services; heat exchanger
and cooler services; electric and electronic services; crane
rigging, transportation, maintenance, testing and certification;
diving services; and occupational safety, health and environmental
services. — Christopher C. Paringit
.
ICTSI earmarks P11.6B for 2008 capital expenditures
INTERNATIONAL Container Terminal Services, Inc.
(ICTSI) is setting aside P11.625 billion this year to improve
cargo-handling equipment for its flagship Manila International
Terminal (MICT), Baltic Container Terminal (BCT) in Poland,
Tecon Suape SA (TSSA) in Brazil, Madagascar International
Container Terminal Services Ltd. (MICTSL) in Toamasina and
its new terminals in Equador, China, Syria, Georgia, Colombia
and Davao.
A total of P8.221 billion will be sourced from retained earnings
of P10.194 billion last year. The company has the option to
use cash balances and proceeds from the secondary offering
of ICTSI shares held by subsidiary and new borrowings for
the expansion.
Last year, ICTSI’s total consolidated expenses excluding
port authorities’ share in gross revenues amounted to
P9.04 billion, a 35.2% increase over P6.685 billion in 2006.
Expenses of new ports in Ecuador, China, Davao, and Syria
caused the increase.
Manpower costs rose 35.3% to P2.419 billion in 2007 from P1.788
billion in 2006, thanks to inclusion of pre-operating costs
in BCT and Colombia and additional personnel hiring for MICT,
BCT, TSSA and MICTSL.
ICTSI also spent for repairs and maintenance of equipment
and facilities, power and light, technical and system development
and maintenance expenses, tools expenses, equipment rentals,
and fuel and oil.
The 67.2% increase in equipment and facilities-related expenses
to P1.851 billion in 2007 from P 1.107 billion in 2006 included
expenses of its new operating companies..
Marine Fuel eyes higher market share, revenues
for 2008
THIS year, Marine Fuel Philippines, Inc. (MFPI),
one of the country’s largest bunker fuel distributors,
is looking at a 10% improvement in market share and a 32.74%
increase in revenues to at least P1.5 billion from P1.13 billion
in 2007.
The growth will be underpinned by the deployment of larger
and more vessels by international shipping lines, the company’s
biggest customer base, according to general manager Fil Santos.
Business improvements are also expected despite the impending
US recession. “We are not concerned with the US recession…
it will not affect our business in any way… we are (even)
expecting an increase in market share from the current 35%
to 45% by end of the year,” said Santos.
MFPI, part of the Magsaysay Transport and Logistics group,
said the ISO certification will also help bring in customers.
Still, Santos remains a tad cautious about long-term prospects,
saying that deliveries are not bound by long-term service
agreements.
If the company hits all its targets, this will be a record
since its 2001 establishment. In 2003, MFPI posted revenues
of P77.84 million and a net income of P476,605.
By the next year, revenues grew 45% to P113.24 with net profit
rising 31% to P625,612. In 2005 the company booked P363.4
million in revenues and a net income of P3.11 million. By
2006, MFPI posted revenues of P1.13 billion and net income
of P12.74 million.
MFPI mainly services the bunkering or the refueling of vessels
whether in-transit or on-dock. It also services the fleet
of the Magsaysay group and its subsidiaries. It has three
barges with a capacity of between 600 and 850 metric tons
of fuel.
It is in the process of replacing two units with bigger ones
for greater market share.
At the moment, the market is served by only a handful of players,
including Petrotrade Philippines Inc. of the Herma Group.
The country has a higher fuel cost because of the lack of
economies of scale compared with transshipment hubs Hong Kong,
Singapore, Taiwan, and South Korea. As a result, most vessels
passing through the Philippines buy just enough fuel to get
them to their next destination.
AFPI organizes international security awareness
conference
BY 2010, all shipments from the Philippines and other countries to the United States will no longer be allowed entry unless they have been scanned 100% prior to their departures from their ports of origin. Similarly, the European Union and the other trading countries are setting up counterpart initiatives to protect their borders from the threats of terrorism.
To tackle the issues, concerns and questions regarding the implementation of such drastic measures, the Aircargo Forwarders of the Philippines, Inc (AFPI) in partnership with the World Customs Organization (WCO) and Philippine Bureau of Customs is organizing an international security awareness conference about WCO SAFE Framework of Standards as well as the concept of meaningful standards of the Authorized Economic Operator (AEO). The 1st National Conference on SAFE TRADE & Authorized Economic Operators International Security Initiatives and their Impact on Philippine Trade is scheduled on May 13-14, 2008 at the SMX Convention Center, Mall of Asia, Pasay City.
Highlights of the conference include a presentation by WCO on the directions since the adoption of SAFE Framework of Standards in June 2005; overview of country AEO Programmes by resource speakers from US Customs and Border Protection, European Union, China, Hong Kong, Japan, Australia, Secured Trade Partnership of Singapore, CTPAT USA, and TAPA; and a presentation of the Philippine Bureau of Customs of its AEO model.
Beginning the last quarter of 2007, the AFPI leadership headed by chairperson Cynthia Tsui, president Jim A. Roxas, and legal counsel Atty. Romy Sto. Tomas initiated a series of dialogues with Deputy Commissioner Nicolas and Chief of International Affairs of BOC, Collector John Simon, pushing for a forum about the concept of multilateral institutions' security framework of standards.
The AFPI Board recently went on a courtesy call to Commissioner Morales and received the support and endorsement of the Bureau of Customs.
AFPI chairperson Cynthia Tsui said, "In the Federation of Asia-Pacific Aircargo Association (FAPAA) Executive Council meeting held last August 2007 in Hong Kong which AFPI attended, air cargo security including the adaptation of WCO AEO was one of the critical issues discussed. As an offshoot of the discussion, AFPI initiated talks with Deputy Commissioner Nicolas and Collector John Simon Chief of International Affairs for the Philippine BOC in order to bring to the awareness of the Philippine trading community the various initiatives which will have a huge impact on the way we do global business."
WCO SAFE Framework of Standards secures and facilitates the movement of global trade while the AEO is defined in the SAFE Framework as a party involved in the international movement of goods in whatever functions that have been approved by or on behalf of a national customs administration in compliance with WCO or equivalent supply chain security standards. AEOs include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, ports, airports, terminal operators, integrated operators, warehouse and distributors.
"AFPI as well as other stakeholders, being part of the complete supply chain cycle will benefit from this AFPI initiative conference. It will make us understand how this security framework of standards will secure, facilitate, integrate, enhance, promote and harmonize the supply chain cycle due to SAFE Framework tenet which is to create one set of international standards and to establish uniformity and predictability thus reducing multiple and complex reporting requirements" AFPI president Jim A. Roxas added.
AFPI is a signatory to the recommendation for the accession and compliance with the Revised Kyoto Convention or RKC (Simplification and Harmonization of Customs Procedures) approved by President Gloria M. Arroyo and endorsed for ratification to Senate President Manny Villar during the BOC Anniversary on February 6, 2008.
AFPI recognizes its role for the BOC to further achieve its E2M Project. It also supports the RKC summits and the 2nd Phase of the value-added service project. The conference will help shape the future Philippine Bureau of Customs systems and electronic governance in the country.
AFPI appointed Max Motschmann of European Consulting Asia Corp - Phil and Liza Almonte of PortCalls as project consultants.
For inquiries, please call the AFPI Secretariat at 853-05498 / 853-2724 or email secretary_general@afpi.org.ph
Courtesy call of AFPI Board on Customs officials. L to R:
AFPI 1st vice president Roy Raralio, AFPI legal counsel Atty.
Romeo Sto Tomas, AFPI treasurer Gregg Sebastian, AFPI president
Jim A. Roxas, Customs Commissioner Napoleon L. Morales, Customs
Deputy Commissioner for Assessment & Operations Coordinating
Group Atty. Reynaldo M. Nicolas, AFPI chairman Cynthia R.
Tsui and Customs Chief of International Affairs Collector
John M. Simon.
WILL the death of a seafarer after the term
of his contract entitle his heirs to death benefits?
No. And this is the story.
Tony Abas, a seafarer, prior to his last contract with KLV
Maritime Agency, while on board experienced painful urination
and he was given a medication.
After the completion of his last contract, Tony sought a
second opinion anent his condition with a private physician
specializing in urology-surgery. It was discovered that he
was suffering from urinary bladder cancer. After his surgery,
he sought another deployment with KLV Maritime Agency. He
was refused employment because he was declared medically unfit
by the company-designated physician.
Abas’ condition worsened and he subsequently died leaving
behind a wife and 2 minor children as his heirs.
His heirs filed a complaint with the Labor Arbiter for death
and compensation benefits under the POEA Standard Employment
Contract. The Labor Arbiter dismissed the complaint as Tony’s
death could not be compensated for because the same did not
occur during the term of his employment contract. And the
same was not shown that his illness was work related. The
NLRC subsequently affirmed the Labor Arbiter’s decision.
The case was elevated to the Court of Appeals. The appellate
court ruled that compensability under the Standard Contract
should be understood to cover an illness which led to the
death of a seafarer occurring during the term of his employment
contract and should not be limited to death occurring during
the term of his employment.
KLV Maritime Agency appealed the ruling of the Court of Appeals
to the Supreme Court. And the Supreme Court ruled in the following
manner:
“It is therefore error on the part of the Court of
Appeals to declare that x x x Section 20(A)4 should be read
to mean that “it is sufficient that the illness which
led to the death occurred during the term of the employment
contract. It is an interpretation clearly not in accord with
the decisions of this Court.
The deceased’s last contract with then petitioners
[KLV Maritme Agency] was finished uneventfully on 20 September
1999. He died on 5 March 2001, one and a half years after
the termination of his employment. His heirs, therefore, are
not entitled to death benefits under the Standard Contract.
x x x
While it is true that labor contracts are impressed with
public interest and the provisions of the POEA Standard Employment
Contract must be construed fairly, reasonably and liberally
in favor of Filipino seamen in the pursuit of their employment
on board ocean-going vessels, we should always be mindful
that justice is in every case for the deserving, to be dispensed
within the light of established facts, the applicable law,
and existing jurisprudence.”
But if the heirs of the deceased were able to adduce evidence
that the deceased’s work exposed him to chemicals suspected
to increase the risks of acquiring bladder cancer or that
the deceased acquired his bladder cancer during his employment,
they would have been entitled to death benefits.
For comments or inquiries, contact the write at jtb@pac-atlantic.com
