Sluggish box
trade in ’08 but imports may be saving grace
INTERNATIONAL shipping, particularly the
containerized trade, will continue to remain sluggish this
year, pummeled by increased slot capacity and the US economic
slowdown. This is according to the Association of International
Shipping Lines (AISL) president Octavio Katigbak.
“It will be tough for us this year particularly in the
containerized trade. Profits are going to be squeezed while
throughput will be at best flat,” Katigbak told PortCalls
in an interview.
“Supposed to be, this time is the start of the peak
season for us but no activity is happening. Based on our January
and February figures, the throughput is already lower than
the figure posted in 2007 and the trend continues,”
Katigbak stressed.
“Business is really being weighed down by increases
in bunker fuel, increases in capacity of shipping lines, and
the US condition,” Katigbak said.
For Philippine operations of container liners, AISL is a bit
more positive, thanks to the imports sector.
Katigbak said domestic consumption is expected to be spurred
by the economy’s stability and its generally positive
outlook in the near term, resulting in bigger imports and
exports. The situation will be helped further by the strong
peso.
A growth area for the Philippines, according to Katigbak,
is the car imports sector which is expected to remain strong
this year. He said carriers operating in the Philippines could
tap this market to cushion some of the impact of the slowdown
in international trade.
“The continuing strength of the peso will induce imports
into the country and somewhat shield the Philippines from
effects of the potential recession,” Katigbak said.
Last year, AISL expressed bullishness about the Philippine
economy after the political climate began to stabilize, seeing
a 10% growth in cargo volume.
The slowdown in the global economy, however, dashed such expectations.
Last year, the AISL member-lines moved an estimated 1.6 million
TEUs, almost the same as in 2006.
Early this year, the Philippine Ports Authority (PPA) said
the growth forecast for 2008 would be the same as 2007’s
also because of the slowdown in the global economy.
In the last four years, growth at PPA-managed ports has been
at less than 10%.
In its annual ports’ executive conference report, the
agency said it does not expect stellar cargo throughput in
the next three years until 2010 as volume growth in the country’s
top 10 major gateways has been limited to less than 5%.
The 10 ports are the Manila International Container Terminal,
South Harbor, North Harbor, Batangas Port, Iloilo, Davao,
Zamboanga, Iloilo, Ozamiz and Cagayan de Oro.
The report showed cargo volume forecasts in six of the 10
major ports was at a combined 2.5-5% growth from this year
until 2010.
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ATI not worried about US slowdown,
forges ahead with expansion
ASIAN Terminals, Inc. (ATI) is unfazed over
the looming US recession and the continuing surge in fuel
prices, maintaining a bullish outlook toward international
shipping this year.
In an interview at the sidelines of its stockholders’
meeting late last week, chairman Bryan Smith said Asian markets
have not been affected that much by the US slowdown.
He noted that with the current standing of ATI in terms of
consistent cash flow and growth, the company just has to improve
capacity and productivity in order to maintain operations
and thwart any negative effects of the US recession on its
business.
“We are not concerned over (the) US (situation). In
fact, we are very optimistic about 2008. ATI will continue
to make investments for our expansion,” Smith said.
“Our only concern as of the moment is the foreign exchange
rate as it will somewhat weigh down growth this year, but
overall, I think we are in a good financial condition to mitigate
its effect on the company,” Smith said.
The smooth sailing Philippine economy and the high demand
for steel, manufac-turing and construction will mean growth
for the country as well as the containerized import market.
“We are not only looking locally, but we are also looking
at the international market where there is opportunity for
ATI,” ATI president Eusebio Tanco for his part said.
Aside from their port operations, Tanco said ATI is also looking
at possible opportunities to complement its business.
ATI is allotting P1 billion in capital expenditures this year,
90% of which will be for the improvement of its South Harbor
operations and the rest divided among its other ports, the
Mariveles Grains Terminal, Batangas Port and Makar Wharf.
Immediate plans include the extension of crane rails and adding
one more quay crane at Pier 3; the building of crane rails
and two additional quay cranes at Pier 9; and the development
of additional container yard at adjacent to its Eva Macapagal
Domestic Terminal to improve port efficiency.
ATI’s authority to manage and operate South Harbor was
extended for another 25 years, or until May 18, 2038. In consideration,
ATI committed to invest $300.5 million from 2009 to 2022 for
the rehabilitation, development and expansion of the South
Harbor facilities.
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Customs to miss RKC schedule
THE Bureau of Customs (BOC) will likely miss
its June target for the accession of the country to the Revised
Kyoto Convention (RKC) due to delays in the Senate.
The BOC was eyeing June to coincide with the meeting of the
World Customs Organization (WCO).
Customs deputy commissioner Atty. Reynaldo Nicolas, in an
interview, said he is constantly negotiating with the committee
headed by Sen. Miriam Defensor-Santiago to hasten the country’s
compliance to the protocol within the year if the June deadline
is not feasible.
“I think we will miss our June deadline to accede. However,
once the Senate issues its concurrence to the accession documents
endorsed to them two months ago, compliance would be easier
as all the documents such as the manual of regulation is almost
ready,” Nicolas said.
“We are also fast tracking the review of the modernization
bill of the BOC that will play a vital role in the proper
implementation of the RKC,” he added. “We are
expecting to release these documents even prior to the approval
of the accession.”
In the meantime, the BOC is pushing for the amendment of several
laws to comply with RKC provisions.
Among the benefits of accession to RKC are cost efficiency
both for the BOC and shippers; trade facilitation through
information technology; harmonized customs procedures, reduced
time and cost; increased transparency and predictability in
Customs transactions and elimination of discretionary treatment
and application of rules; implementation of special procedures
for low-risk importers; and reduction of opportunities for
extortion.
Non-concurrence could put the BOC modernization program at
risk because the Philippines would not be party to the treaty
which establishes business practices in risk management, audit-based
controls, pre-arrival information, information technology,
coordinated intervention, consultation with trade, information
on customs laws, rules, and regulations and system of appeals
in customs matters.
The Philippines will also become an anomaly in international
groupings.
The Philippine Chamber of Commerce and Industry, the Federation
of Philippine Industries, the Philippine Exporters Confederation,
and the Port Users Confederation among others, said the country
should adopt a medium and long-term strategy for compliance
with provisions of the convention for a better business climate.
The group said accession to the RKC and subsequent compliance
with its provisions will facilitate movement of goods and
people and expedite import-export and all other related cross-border
transactions, resulting in benefits for everyone.
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Dumaguete port back in business
THE Philippine Ports Authority (PPA) restarted
operations at Dumaguete port over the weekend after labor
problems shut down the facility for almost two months.
An amicable settlement involving the fate of workers to be
displaced was recently reached between new port cargo-handling
operator Prudential Customs and Brokerage Services, Inc (PCBSI)
and port labor union Associated Labor Union-Trade Union Congress
of the Philippines (ALU-TUCP).
PPA assistant general manager and concurrent Visayas port
district manager Raul Santos told PortCalls the agreement
is a win-win solution for both parties as it eliminates similar
strikes from union members in the future.
“It’s settled now. Dumaguete is back in full commercial
operations. Hopefully, we will not encounter any more hitches
with the new agreement,” Santos said.
Based on the agreement signed by all parties last week, PCBSI
will absorb all port workers, particularly the 119 union members,
employed prior to the company’s takeover.
PCBSI also agreed to recognize the ALU-TUCP as the collective
negotiating party to any agreement with the port.
Operations at Dumaguete port stopped on March 13 after striking
workers took over the port preventing the embarkation and
disembarkation of cargoes. The situation led to congestion,
forcing shipping lines to dock at a nearby private port.
The strike cost vessel operators Sulpicio Lines, SuperFerry,
George and Peter Lines, Cokaliong and Allesson Shipping approximately
P6 million in combined revenues.
Based on estimates, Sulpicio lost P2 million from payment
of cargoes to be shipped out of Dumaguete while the Aboitiz-owned
SuperFerry lost P1.6 million weekly.
George and Peter Lines, Cokaliong and Alesson Shipping Lines
lost P800,000, P700,000, and P300,000 a week, respectively.
PPA also had foregone revenues of P420,000 a week from port
charges such as usage and wharfage fees on top of the 10%
share from the proceeds of cargo handling operations.
Since October last year, workers affiliated with the ALU-TUCP
have picketed the port on and off, in protest over the assumption
of PCBSI as port cargo handler saying this would cause massive
worker displacement.
In December 2006, PCBSI won the cargo-handling contract for
the port.
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Single-hull tanker-barge operators get reprieve
OWNERS of locally registered single-hull
tanker-barges are assured of business, at least in the next
eight months, after the government extended the use of such
vessels to end 2008 from the original phaseout schedule of
April 30.
The April 30 phaseout deadline for single-hull international
tankers entering Philippine waters, however, remains.
The Maritime Industry Authority (Marina) said it extended
the local operators’ compliance deadline to give smaller
players time to source funds to replace or convert their existing
fleet.
From now until yearend, operators of locally registered single-hull
tankers will be subject to a new set of conditions and a monetary
bond to guarantee proper response during oil spills.
Most black oil-carrying tankers are already compliant with
the double-hull policy since most have long-term charter contracts
with oil companies that employ stricter requirements due to
insurance and other policies set by international rules.
The situation is, however, different with tanker-barge operators
which only provide service on a per voyage basis.
Depending on the size of the tanker-barge, its conversion
to double-hull would cost about P20 million. A new one, on
the other hand, is between P120 million and P150 million.
And while it only takes two months to convert single-hull
tanker-barges to to double-hull, operators claim there are
no local shipyards to undertake the conversion.
The Philippine Petroleum Sea Transport Association is also
questioning whether its members will recoup their refleeting
investment considering the transfer by 2013 of the Pandacan
oil depot, the sector’s key market.
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More sponsors support AFPI’s national
conference on cargo security
WORLDTRADE Management Services-Manila/PricewaterhouseCoopers
recently signed up as a major sponsor to the 1st National
Conference on Safe Trade and AEO (Authorized Economic Operators)
organized by the Air Cargo Forwarders of the Philippines,
Inc on May 13-14 at the SMX Convention Center in Pasay City.
WMS is a regional customs and international trade consulting
practice providing global, regional and national business
trade solutions. In the Philippines, it offers customs and
international trade services in the following areas: customs
valuation (planning and risk management); trade planning;
dispute resolution e.g. VCRC, tentative release; ruling applications
(Tariff Commission and Bureau of Customs); general customs
management support e.g. customs broker selection, engagement,
performance review; import and Super Green Lane accreditation;
customs bonded warehouse application and implementation; anti-dumping
protests and safeguard measures; refund and duty drawback
application; self assessment; due diligence review; post-entry
audit; and general customs and tariff advice.
Regal Knights Security and Detective Agency Inc (RKSDA) also
signed up as a partner organization.
A security protection agency, RKSDA is managed by young professionals
with vast training and experience in military and police operations.
It provides a complete line of security services to clients
for example, VIP protection, investigation, counter-surveillance,
security surveys and electronic countermeasures, to name a
few. It also employs the highest quality, state-of-the-art
training methods conducted by specialists, coupled with a
selection process that eliminates all but the highest caliber
security personnel.
Highlights of the AFPI national conference include a presentation
by the World Customs Organization on the directions since
the adoption of SAFE Framework of Standards in June 2005.
Overview of country AEO Programs by resource speakers from
U.S. Customs and Border Protection, European Union, China,
Hong Kong, Japan, Australia, Secured Trade Partnership of
Singapore, CTPAT USA, TAPA and the presentation of the Philippine
Bureau of Customs, its AEO model will be part of the conference.
From left Max Motschmann, chief
executive officer of the European Konsulting Asia Corp;
Ricia Jinellio Octavo, senior associate (Worldtrade
Management Services); Dennis Anthony P. Caronan, Manager
(Worldtrade Management Services-Manila / PricewaterhouseCoopers);
Jaime Roxas, AFPI president; and Adrian P. Dabao, associate
(Worldtrade Management Services-Manila/PricewaterhouseCoopers). |
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Rig fabrication to power Keppel’s
‘08 growth
THE focus on its rig fabrication business
along with the floating production, storage and offloading
business will bring better returns for Keppel Philippines
Marine, Inc this year.
“We are also expanding our shipbuilding portfolio to
include specialized vessels as well as aim for more high-value
contract in shipbuilding, offshore oil rig fabrication, ship
repair and conversion,” KPMI said in a report.
“A present trend is the conversion of single-hull tanker
to dry bulk carrier. Our Subic Shipyard is focusing on this
type of conversion that employs the existing technical competency
available in the yard,” it added.
KPMI’s Batangas shipyard is busy luring high-value repair
jobs, particularly fabrication work for ultra-deepwater semi
submersible oil rigs.
Its Cebu facility is expected to secure a higher workload,
mainly servicing roll on-roll off vessels plying the interisland
trade and reefer vessels servicing the Middle East, Korea
and Japan.
Last year, KPMI posted an 81% increase in net income to P508
million from P280 million in 2006 due to the strong international
ship repair business and higher-value jobs.
Keppel Batangas repaired and dry docked 82 vessels compared
with 80 in the previous year. The number of foreign vessels
repaired rose to 40 from the previous 28.
Keppel Cebu repaired 77 vessels, 43 of which were for local
firms, down from 92 recorded in 2006.
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PISFA golf tournament at Sta Elena
a hit
DESPITE threats of rain, the golf had to
go on. 94 par-busters showed up. At 8:15 in the morning on
April 14, 2008, Rico Brizuela and Bayani Coching started the
Philippine International Seafreight Forwarders Association
(PISFA) tournament by hitting the ceremonial balls.
At the end of eighteenth hole or some five hours later, the
participants gathered at the Hacienda Hall for lunch, awarding
and raffles.
With additional entertainment from the Hot Step Dancers, PISFA
members and guests really had a day of camaraderie, fellowship,
friendly competition and great fun.
PISFA president Dexter Yu uttered his amazement in seeing
the participants’ love for the game and passion for
golf. Since part of the proceeds of the tournament will go
to PISFA’s Gawad Kalinga advocacy, he also expressed
happiness during the welcome remarks that said love and passion
have been extended not only in helping the association but
also in helping the less fortunate.
Topping the tournament was Jose Arturo Tugade of Transglobal
Consolidators, Inc. He was awarded a trophy and the Blue Jacket
(lifetime pledge of Bayani Coching of Mercury Freight Int’l.,
Inc.), symbolic of the Overall Top Golfer of the year.
Winners of the recent fun-filled
PISFA golf tournament |
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