No light at the end of the tunnel for trucking industry
THE high cost of fuel is dampening growth
in the trucking sector with members of the Confederation of
Truckers Association of the Philippines (CTAP) expecting flat
to negative growth this year.
“2008 is really worse than anticipated. At the start
of the year, we were looking at about 10% overall growth but
the frequent increases in diesel prices have pulled down our
growth prospects,” CTAP president Col Rodolfo De Ocampo
told PortCalls.
CTAP members’ fuel expenses within the 40-kilometer
radius in Metro Manila now eat up more than 50% of revenues
from only 30% in the last few years, De Ocampo said.
Fuel expenses for provincial operations, on the other hand,
now account for up to 65% from a little under 40% previously.
If the trend continues until yearend, CTAP members will have
to resort to longer unit downtimes and frequent and larger
rate increases, the chamber president said.
Last year, the trucking industry posted a 10% growth —
the first growth in the last four years — on the back
of active export and imports.
“Volume-wise we can say it has been good (this year)
compared to last year but whatever increases we have registered
are not even enough to cover our fuel expenses,” De
Ocampo noted.
“The fuel issue is really our biggest problem now and
from the looks of it we need a miracle to mitigate its effects
not only on truckers but on everyone,” he said.
If the predicted P70 per liter price of diesel materializes
in the next few of weeks, CTAP members will be forced to increase
rates by at least another 30% to offset the hike, he added.
De Ocampo said that at this point even government subsidies
do not qualify as a short-term solution especially when fuel
prices are growing on a weekly basis.
At the start of the month, CTAP had already jacked up rates
by 30% to recover losses related to higher fuel, labor and
maintenance expenses. The increase was the first for CTAP
in two years.
From South Harbor, CTAP members charge P8,060 for the carriage
of each 20-foot container within Metro Manila from the previous
P5,642; and P8,840 for each 40-foot container from P6,188.
Beyond EDSA, CTAP members collect P9,090 for each 20-footer
going to Valenzuela and P11,960 for a 40-footer on its way
to Meycauayan.
The price of diesel, the most common fuel used by trucks,
has increased more than P27 per liter since January this year
and is now at the P58.50 per liter level. If the weekly P1.50
per liter increase resumes after a P1.50 per liter cut last
week, the price of diesel could reach P60 this week.
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North Harbor may not need privatization: cargo handlers
INSTEAD of waiting for the North Harbor
privatization, the Philippine Ports Authority (PPA) should
give current port cargo handlers long-term contracts in exchange
for investments in cargo-handling equipment.
“Privatization is no longer needed in North Harbor as
modernization could be achieved using existing cargo handling
operators,” members of the Philippine Chamber of Arrastre
and Stevedoring Service Operators (PCASSO) said at the recently
concluded PPA-sponsored cargo handling summit.
“If privatization drags even further than anticipated,
the PPA should now seriously look into awarding long-term
contracts to existing operators to have more sophisticated
facilities that will achieve efficiency,” they added.
The group’s wish is embodied in Resolution No. 01-2008,
which they adopted during the summit.
Due to the privatization program, PCASSO members only hold
contracts of up to five years.
The PPA has no timetable for the North Harbor privatization,
which has been hobbled by a case filed against the agency
by the joint venture of Harbour Centre Port Terminals Inc
(HCPTI) and Metro Pacific Investment Corp (MPIC).
The conflict stemmed from a PPA Board resolution adopted in
July 2007 voiding the bidding process which declared the HCPTI-MPIC
joint venture as the only eligible bidder.
The PPA claimed the contract should be awarded through a competitive
bid with at least two bidders to guarantee the best rates.
The North Harbor has fallen way below international standards.
Its facilities are more than 50 years old and have surpassed
their economic life.
Last year, the port handled more than 400,000 TEUs. This year,
North Harbor port manager Constante Fariñas said PPA
is looking at duplicating, if not surpassing, performance
in 2007.
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Lufthansa strike’s effects on cargo
operations still under scrutiny
LUFTHANSA Cargo AG as of press time said
it was assessing the effects of a strike in Lufthansa offices
in Germany.
A statement from Lufthansa Cargo AG said the company still
does not have enough information about the focus of the strike
and which department would be affected.
Lufthansa’s operations at Frankfurt and Hamburg were
disrupted when employees at Europe’s second-biggest
airline decided to go on strike over pay. The walkout involves
staff from baggage handlers to cabin workers and started Sunday
(Monday Manila time).
After a recent 36-hour walkout by pilots, Lufthansa now faces
the prospect of unlimited strikes involving 52,000 other employees.
The pay disputes pose a challenge to Lufthansa Chief Executive
Officer Wolfgang Mayrhuber’s efforts to rein in spending
as oil prices soar. Jet-fuel prices have risen 47% this year.
“The strike within Lufthansa Group will start at night
from Sunday to Monday at midnight (July 28th) (Monday to Tuesday,
Manila time), Lufthansa Cargo has currently no information
which areas or departments will be affected,” Nils Haupt,
Director Corporate Communications of Lufthansa Cargo AG.
“Our crisis committee has prepared several measures—depending
on the focus of the strike. We will inform our customers immediately
after getting knowledge of detailed strike actions and the
influence on our daily operation,” Haupt said.
“We will do our utmost to keep operation as smooth as
possible,” Haupt added.
PortCalls contacted Lufthansa Cargo’s Manila office
but officials declined to give details on the strike’s
effects on Philippine operations to prevent inconsistencies
with measures to be announced by headquarters.
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More cold chain facilities needed in Cebu,
businessmen demand
CEBU businessmen are urging both government
and the private sector to invest in more cold chain facilities
to reduce post-harvest losses and push more independent producers
to get into business.
In a presentation during a conference hosted by the Cold Chain
Association of the Philippines (CCAP), Cebu Chamber of Commerce
vice president for external affairs Clarito Fruelda said the
Visayas region, particularly Cebu, needs more cold chain facilities
to accommodate the growing volume of perishables.
The short shelf life of fruits and vegetables and poor harvest-handling
practices negate gains achieved in production, Fruelda said.
Post-harvest losses of horticultural crops in the Visayas
region now range from 40-60% of the total produce.
“Why Cebu?” Fruelda asked, “Because of its
consistent two-digit economic growth for the last ten years
making it one of the fastest-growing economic growth in the
country.”
“It is also strategically located at the center of the
country geographically speaking with direct flights to Hong
Kong, Singapore, Japan, the US, Macau and others,” Fruelda
added.
Aside from having direct air flights to almost all major countries
within the Asia-Pacific region, Cebu is also the hub of the
domestic shipping industry with such players as Aboitiz Transport
System, Sulpicio Lines, and Gothong Lines calling it home.
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2GO puts ScanAsia facilities on the auction, leasing block
2GO, the logistics arm of the Aboitiz Transport
Group, is looking at selling or renting out distribution and
warehousing facilities of ScanAsia, an importer and distributor
of foodstuff, which 2GO acquired earlier this year.
“We have no plans to utilize the facilities considering
the high fuel and power cost,” said 2GO president and
chief executive Sabin Aboitiz at the sidelines of the company’s
launch of its cold chain service last week. “We are
only utilizing our cold chain facility in North Harbor in
Manila as our consolidation and distribution center for all
products destined for Luzon, Visayas and Mindanao,”
he added.
The 2GO cold chain business focuses on the less-than-container
service suitable especially for small and medium-sized enterprises.
Clients include Mekeni Food Corp, Creamline Dairy Corp, Fruits
in Ice Cream and
Healthy Options. In addition, it handles all the logistics
needs of Colgate-Palmolive and Kraft and ships up to 85% of
Procter & Gamble products in Visayas and Mindanao.
It recently secured a three-year P160-million contract for
100% warehousing and distribution of Mead Johnson products.
Jollibee Foods Corp is reportedly planning to tap 2GO to handle
the distribution of food supply from Manila to its stores
nationwide.
2GO has injected more than P300 million for the cold chain,
particularly for the distribution center, supply chain center
and delivery vans.
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Dingalan port completed
THE Philippine Port Authority (PPA) recently
completed construction of the port of Dingalan in the province
of Aurora. The development will facilitate the planned roll
on-roll off (ro-ro) service between the provinces of Aurora,
Cagayan and Isabela.
The port is roughly 45 kilometers southwest of Baler, Aurora’s
capital town, and forms part of the Eastern Luzon Seaboard
Strategic Scheme and the New Pacific Coast City, a private
sector-initiated sub-regional development plan aimed at easing
population pressure and environmental stress in Metro Manila
and other existing urban centers in Luzon.
Dingalan port provides alternate access connecting Aurora
to other points in the country. Potential cargoes expected
to pass through it include fertilizer and other farm inputs,
agricultural produce (grains, coconuts, prawns), mined minerals
and ores (manganese, aggregates, etc) and other general cargo,
to and from Nueva Ecija and other Central Luzon provinces.
It has an area of 7.7 hectares with facilities such as ro-ro
ramp, rock causeway, and rein-forced concrete pier and platform
area.
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