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DMAP
Induction, Donald Dee
The 10 Directors and their officer positions, and the
Committee Chairpersons are:
| President Jun Gabrino |
Splash |
| VP Ana Rose Ochoa |
J&J |
| Secretary Marichelle
Chan |
Unilab |
| Treasurer Boy Arceo |
Smart |
| Auditor Gerry Ong Cheng |
Ban Yek |
| PRO John Guillermo |
CDO |
| Director
Cora Curay |
XVC |
| Director Al Lagera |
PLDT |
| Director Alain Ison |
Colgate |
| Director Noel Gerodias |
MMG Corp. |
| Committee Chair
Elsie Oafallas Sr. |
Marketing |
| Committee Chair
Joseph Luat |
Loscam |
| Committee Chair
Sammy Palomares |
SMC |
| Committee
Chair Ninoy Rollan |
TNT |
| Committee Chair Danny Cabrera
|
Zuellig Pharma |
| Committee Chair Joey Castro |
Accord |
Personalities invited to serve as guest
speakers and inducting officers are Rep. Ed Zialcita
of Parañaque and PCCI President Donald Dee.
DMAP has chosen to invite these two gentlemen in recognition
of actions taken by them in an area which has a significant
impact on logistics, sea transport, more specifically
ports.
In the case of Rep. Zialcita, he has recently spoken
for competition and against the control over international
containerized cargoes in the port of Manila which is
being exercised by ICTSI, Asian Terminals, Inc. and
the PPA.
In the case of Donald Dee, DMAP recognizes and remembers
him as the one person that carried the torch in leading
the fight against the establishment of a monopoly at
the North Harbor, which could ultimately be expanded
to other ports in the Philippines.
Harbour Centre Port Terminal, Inc., which would like
to compete with ICTSI and ATI for international containerized
cargoes, has not been given a permit by the PPA for
such cargoes.
As far as we could remember, the reason given by PPA
for not giving the permit is that it is still reviewing
the contracts of ICTSI and ATI to make sure that there
would be no violation.
But this was said months ago, at least. How long should
it take to review what it said it was reviewing? Probably
one day.
Harbour Centre, in its business in domestic cargoes
and international non-containerized cargoes, has been
able to charge much lower fees, and this appears to
be the source of fear of the international containerized
cargo handlers.
Back to Donald Dee. His impact on DMAP was felt during
the days of EO59, the infamous executive order signed
by Erap, giving a consortium of ICTSI (Razon), ATI (Tanco)
and shipping lines principals (Aboitiz), a monopoly
not just in cargo handling, but on all port services
at the North Harbor. Provisions of the EO would also
make it possible to expand the monopoly to other ports
in the Philippines, ultimately even the entire country.
This EO was signed surreptitiously by Erap on one quiet
day (the 28th) of the 1998 Christmas holiday season.
This was during the days of PPA GM Johnny Peña.
The EO bypassed the DOTC.
DMAP was among the first groups to cry foul against
EO59. DMAP started to form a group, tapping other associations
to join its crusade against monopolies, including AISL,
APPOOP, FSA, UTAP, and industry associations. DMAP also
sought the help of lawmakers and political figures.
Some of these figures pretended to lend an ear, but
some of them only wanted to maintain or enhance their
political stature. New allies joined DMAP, including
advocates from the academe, notably UAP.
Successive efforts by DMAP and its allies in different
venues seemed to succeed in having EO59 softened or
lined up for review, such as PCCI, DTI, EMG, etc., but
powerful forces in different places always restored
EO59 to its menacing position. Former DTI Sec. Roxas
was one of the powerful figures that supported EO59.
As DMAP strengthened its ties with the PCCI, the fight
against EO59 grew stronger. Donald Dee then personally
took charge and led the fight, despite his admission
that he did not know that much about ports. Finally
the group succeeded, aided by the downfall of Erap.
Today, Donald Dee is the new PCCI President, replacing
Noemi Saludo, whose one-year stint in 2004 was a major
disappointment for DMAP.
Saludo converted the PCCI Transport Committee into an
inner circle for service providers in sea, land and
air transport. The one committee most important to DMAP,
as a member of PCCI, excluded DMAP from its activities.
Membership in PCCI was useless in 2004. DMAP hails the
entry of Donald Dee to the top post in PCCI.
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RP
shipping needs higher crisis management standards
RP shipping needs higher crisis management standards
THE Philippine shipping industry requires greater crisis
management standards to prepare for future risks and
unexpected turns in business, a crisis management expert
said.
In an interview at the sidelines of the recently concluded
Seamless Crisis Management Seminar held at the Hotel
Intercontinental Manila, workshop leader Warren Thompson
noted the Philippines is among the many countries where
security is a big issue.
"Businesses here, particularly those in shipping, are
most often than not volatile, thus susceptible to being
a threat to the environment. For instance, tankers are
usually criticized in the event of a major oil spill.
So, how does a company deal with such situation?" Thompson
asked.
Crisis management involves planning for crises and ensuring
that organizational arrangements are in place. Good
crisis management strategies prepare executive management
in the correct ways of handling crisis situations hence
protecting their interests as well as the company's
reputation and future.
"Our objective here is to increase the people's level
of awareness and preparedness and increase their concentration
at times of crisis to preserve the company's name,"
Thompson added. National Marine Corporation (NMC) general
manager Cornelius De Guzman said local shipping is "synonymous
to crisis" - a situation that compels stakeholders to
have a better understanding of crisis management.
"In our company, we already have our own crisis management
strategies. What we need is to further elevate it and
learn new information," he noted, adding regular workshops
on crisis management will help boost the industry's
awareness level. NMC transports products of major oil
companies such as Petron, Caltex and Shell to various
domestic destinations.
The crisis management workshop was also attended by
representatives from local manufacturing and distribution
firms such as Bayer, Pfeizer, Unilever and San Miguel
Corp. - M. R. Mesias .
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Eva
Macapagal Terminal not exclusive to Aboitiz, stresses
ATI
ASIAN TERMINALS, INC. (ATI) stressed the Eva
Macapagal Super Terminal (EMST) is an open facility
and not exclusive for use of the Aboitiz Transport Group
(ATG).
ATI maintains and operates South Harbor where the domestic
berth is located. "It's an open facility, but we get
so much Aboitiz traffic there's limited berth availability,"
ATI president and chief executive officer Jeremy J.L.
Rickord pointed out.
About 23% of the entire operations of ATI come from
domestic shipments at the terminal. Rickord said ATG
was the first customer to come in and made the commitment.
For this reason, it was given berth space priority.
"Same as in a container terminal.
If you come along with a ship and say 'I want to come
here every Tuesday', then we will write a contract that
commits service every Tuesday," he noted. Majority of
ATG vessels, including Superferries 12, 15, 18 and 19,
call at the EMST, which only started full commercial
operations upon removal of the Manila Hotel-owned M/S
Philippines from one of its berths late last year.
Rickord said M/S Philippines has kept domestic volumes
down because ATG does not have full access to the facility.
But since the removal of M/S Philippines, EMST has been
performing to expectations, he noted.
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Good
News at the PPA
WE had earlier announced the induction of DMAP's Directors,
Officers and Committee Chairpersons for year 2005, on
Friday this week, Jan. 28, 2005 at the EDSA Shangri-La.
DMAP has just announced, in addition to earlier announcements
of the Directors and their officer positions, the committees
left to the charge of each Director, as well as the
Committee Chairpersons.
| Position |
Committee |
Name Company |
In-Charge of |
| President |
Jun
Gabrino |
Splash |
Conference, Sea,
Ports, Sp. Proj.&J |
| Vice President |
Ana
Rose Ochoa |
J&J |
Membership & Finance |
| Secretary |
Marichelle Chan
|
Unilab |
Air Transport |
| Treasurer |
Boy Arceo |
Smart |
Academe, Memb. & Finance |
| Auditor |
Gerry
Ong |
Cheng Ban Yek |
Ports |
| PRO
|
John Guillermo |
CDO
|
Land
Transport, Ports |
| Director |
Cora Curay |
XVC |
Sea Transport |
| Director |
Al Lagera |
PLDT |
Warehousing |
| Director |
Alain Ison |
Colgate |
Land Transport |
| Director |
Noel
Gerodias |
MMG Corp. |
Land Transport |
| Com. Chair |
Elsie
Oafallas Sr. |
Marketing |
Membership & Finance |
| Com. Chair |
Joseph
Luat |
Loscam |
Air Transport |
| Com.
Chair |
Sammy
Palomares |
SMC |
Sea
Transport |
| Com. Chair |
Ninoy Rollan |
TNT |
Warehousing, Special Projects |
| Com. Chair |
Danny Cabrera |
Zuellig Pharma |
Special Projects |
| Com. Chair |
Joey Castro |
Accord |
Air Transport |
As I reported before, guest speakers and
inducting officers will be Rep. Ed Zialcita of Parañaque
and new PCCI President Donald Dee. Mr. Dee was a keynote
speaker at the 2004 DMAP conference, but he suddenly
had to be away at the scheduled time of his speech,
so his speech had to be read for him.
In the last issue, we already discussed DMAP's choice
of these two gentlemen, which is in recognition of actions
taken by them in an area which has a significant impact
on logistics. That is sea transport, more specifically
ports.
Various guests from both the government and the private
sectors have been invited, including DMAP charter members,
past presidents and selected past officers.
At this time that DMAP has chosen two guest speakers
and inducting officers who have done some good in the
ports scene, we have more good news at the ports.
Here it is. At the PPA, various news items have reported
the dismissal of Manila Port District Manager Leopoldo
Bungubung, after the Ombudsman found sufficient evidence
of grave misconduct.
Evidences showed that Bungubung took advantage of his
position as Chairman of the Ports District Bids and
Awards Committee and used it as a leverage for soliciting
cash and a Pajero from the bidders as a consideration
for the award of a PPA security contract. Charges have
been filed, or will be filed, of violation of RA 3019
or the Anti-Graft and Corrupt Practices Act.
Bungubung was said to have demanded various sums of
money or "balato" ranging from P10,000 to
P20,000 a month at first, and later P40,000 to P50,000
a month, and a Pajero. The complainant was said to have
given P50,000 to Bungubung in February 2001. After failing
to give the Pajero demanded, the complainant found out
that the contract was awarded to another bidder, and
a Pajero was transferred to Bungubung's son Norman Vincent
in March 2001.
The dismissal carries with it accessory penalties of
cancellation of eligibility, forfeiture of retirement
benefits and disqualification from reemployment in government
service.
As it is, the case is not finished. We have heard that
Bungubung is still holding office at the PPA Manila
PDO, claiming that he has an appeal.
Another reason the matter should not be finished is
that the complainant had said that Bungubung and other
officials had demanded the money. The questions are
- Who are these other officials? Are there any evidences
against them?
We recall that the corrupt acts were committed during
the leadership of then PPA General Manager Johnny Peña,
and also GM Al Cusi, who succeeded him.
Over the years, we have complained, in this column and
in other venues, about the moro-moro 'hearings' conducted
at the PPA, particularly the so-called 'hearings' on
the petitions of ATI and ICTSI for rate increases. These
hearings were conducted under the management of Bungubung.
DMAP had filed a complaint to the PPA about the lack
of due process in these hearings. At the hearings the
proponents ATI and ICTSI were all seated in front of
the audience together with the PPA, and the behavior
of PPA was very strange, seemingly speaking for and
defending the petitions for increase. The PPA was explaining
the justification for increase, instead of acting as
an impartial judge.
Questions raised by the audience (I recall Julio Garcia
of AISL and Atty. Clem San Agustin of Philexport), including
DMAP, were never answered satisfactorily.
Instead we would just hear that the increases had been
granted. Audience participants felt 'used', in satisfying
requirements for a hearing. Obviously, as we had complained
time and again, the PPA would grant the increases because
the PPA had a percentage of the cargo handling fees.
The PPA share in the cargo handling fees of Manila ports
represents around 60% of the revenue of PPA, which was
P5.6 billion in 2004. I have in earlier columns listed
how the revenues and net incomes of the PPA, ATI and
ICTSI go together.
Very recently, we tried to get the minutes of the Dec.
20 hearing on the current petitions of ATI and ICTSI,
but we were referred to different offices, including
the Secretariat, PDO Manila, Technical Services (no
answer), the GM and Operations (not in service).
DMAP has released its 2005 calendar for seminars, but
due to lack of space now, we will publish it next time
(Feb. 7). Those who would want to get it before then,
please let us know.
Two new seminars are being added: Intro to Supply Chain
Management (2 days, Feb.) and Security in the Supply
Chain (1 day, June)
Back to Top
What
Good News?
DMAP inducting officers and keynote speakers Donald
Dee and Cong. Ed Zialcita emphasized different points
in their speeches at the DMAP induction of 2005 Officers
last Jan. 28 at the Edsa Shangri-La.
PCCI President Donald Dee focused on his chosen approach,
whereby he will be visiting different parts of the country
and asking countryside members to bring out their problems.
He also noted that DMAP was absent from PCCI activities
throughout 2004.
As you might recall, DMAP was quite disappointed with
then PCCI President Noemi Saludo, who converted the
PCCI Transport Committee into an inner circle of sea,
land and air transport service providers and excluded
the cargo owners. DMAP expects to be involved in PCCI
activities again under the leadership of Donald Dee.
Cong. Ed Zialcita spent time on three matters. He gave
a spiel in support of President GMA, and he talked about
his sponsorship of the new law on expanded senior citizens
benefits. He spent the longest time in severe criticism
of players in the shipping industry.
Cong. Zialcita first lambasted the shipping lines for
behaving as a cartel, with the top three shipping lines
controlling over 80% of the volume, and with less than
15% of the routes experiencing substantial competition.
Shipping lines, which offer different qualities of service,
and with different financial performances, are charging
the same rates and seeking identical rate increases.
They are also using the same lawyer and identical positions
and legal arguments, except for Nenaco.
He said that the cartel among shipping lines has been
tolerated, even supported, by MARINA, and that "regulatory
capture of MARINA has been evident for two decades".
He also gave an accurate rundown on the rate increases
of the shipping lines, as follows: +20% Nov 2000, +6%
Nov 2002, +5.98% Mar 2003, +7.5% Oct 2003, +9% Oct 2004
and +5.5% Jan 2005.
In cargo handling, he castigated the PPA, the regulatory
body, for its conflict of interest and for its being
anti-competition.
It has a share in the arrastre and stevedoring rates
that it sets, 10% for domestic and higher for international,
and this is the main reason for the continued rise in
cargo handling rates. The PPA also has not granted a
permit to Harbour Centre to handle international containerized
cargo, which would allow it to compete with ATI and
ICTSI, and this would lead to lower rates.
Speaking of the PPA, last time we wrote about the good
news at the PPA. But as of today, dismissed Manila Port
District Manager Leopoldo Bungubung remains in his office.
It is said that his case is under appeal. As he remains
in his post, cargo owners continue to worry about the
petitions of ATI and ICTSI, which are currently being
heard. The hearing could be another moro-moro.
Over the years, the 'moro-moro' hearings on the petitions
of ATI and ICTSI for rate increases were conducted at
the PPA under the management of Bungubung. We had complained
about these hearings in this column and in other venues.
As I mentioned two weeks ago, we have been trying to
get the minutes of the Dec. 20 hearing on the current
petitions of ATI and ICTSI, but were referred to different
offices, including Technical Services, Operations and
the GM. Can you believe this? As of today, we are still
unable to get these minutes !!! This was after lots
of phone calls, a formal letter by fax and follow-ups
by different DMAP officers.
DMAP's 2005 calendar for seminars and the conference
includes the following schedules.
• Intro to Supply Chain Management (Feb. 24-25)
• Basic Shipping Course (Mar. 18)
• Forum on Measuring Logistics Performance (Apr.
22)
• Shipping Immersion Course (May 20-23)
• Managing Security in the Supply Chain (June
24)
• Basic Warehousing Seminar (Jul. 14-15)
• Annual Logistics Conference (Sep. 15-16)
• Advanced Warehouse Management Seminar (Nov.
25)
Back to Top
Shipping
Cost Pressures
Everything is quiet regarding the shipping lines rate
increases. In addition to the GRIs dating back to Nov.
2000 and up to Jan. 2005, PLSA also moved to make the
provisional 10.88% GRI a permanent increase.
That increase was set by the MARINA on a provisional
basis, we think sometime in 1999, after the liners asked
for a much higher figure, over 20%. The basis of the
10.88% figure was a calculation by the MARINA using
its RORB formula. We see the motion for the permanence
of the 10.88% figure as an endorsement for the RORB
formula. This is inconsistent with the shipping lines'
assertion in many of its legal papers that the RORB
formula is no longer applicable.
Efforts started in 2003 towards collaboration have not
been resumed, since they were stopped by the shipping
lines in Sept. 2003, when the liners violated a "gentlemen's
agreement" to discuss any rate increase prior to
announcement and implementation. In Sept. 2003, the
shipping lines suddenly announced a 7.5% rate increase
while discussions at collaboration were going on between
panels of both sides.
Over at the PPA, Mr. Bungubung continues to sit in his
office. Our numerous requests for a copy of the minutes
of the Dec. 20 hearing on the ATI / ICTSI petitions
remained ignored until last Thursday, Feb. 17. We had
made numerous telephone calls and fax messages to the
PPA for such minutes since around mid-January. We were
referred to different offices and told that the minutes
had been sent, whereas they were not.
DMAP was unable to complete its position paper because
of the absence of the minutes.
We received information that a PPA Hearing Panel would
meet last Friday on the petition and discuss comments
of five organizations that had submitted position papers.
The five organizations that filed position papers
are:
• Chamber of Customs Brokers
• Port Users Confederation
• Association of International Shipping Lines
• Consumer Complaints Center
• Phil. Ship Agents Association
The position of the Consumer Complaints Center consists
of the basic arguments below. In many previous columns
we have expressed the same arguments.
• The PPA Hearing Panel is not ready to hear
petitions for rate increases in cargo handling
• There is an inherent conflict of interest in
the PPA charter
• There is a perceived bias in favor of the petitioner
cargo handlers
Last time, we mentioned the 2005 lineup of DMAP seminars
and the conference. Below we give the dates.
• Intro to Supply Chain Management (2 days, Feb.
23-24)
• Basic Shipping Course (1 day. Mar. 18)
• Forum on Measuring Logistics Performance (half
day, Apr. 22)
• Shipping Immersion Course (tentative May 20-23)
• Managing Security in the Supply Chain (1 day,
Jun. 24)
• Basic Warehousing Seminar (2 days, Jul. 14-15)
• Annual Logistics Conference & Exhibit (2
days, Sep. 15-16)
• Advanced Warehouse Manage-ment Seminar (1 day,
Nov. 25)
Last call for the Intro to SCM seminar on Feb. 23-24!!!
Topics include:
• Supply chain management evolution
• Inventory planning & control
• Materials management
• Transportation & distribution
• Warehouse operations
• Customer service
• Supply chain performance
Speakers are: Ike Castillo (James Hardie), Malou Santos
(J&J Consultant), Norman Adriano (WG&A) and
myself. All four are past DMAP presidents.
DMAP - SSSR Consultants is open to giving in-house seminars.
Meanwhile DMAP launched its contest for this year's
conference theme. The contest is open to all employees
of DMAP member companies.
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All Quiet
EVERYTHING remains quiet regarding the shipping lines
rate increases. In addition to the GRIs dating back
to Novem-ber 2000 and up to January 2005, and even the
provisional 10.88% GRI dating back to 1999 which PLSA
is asking to be a permanent increase.
Over at the PPA, Mr. Bungubung continues to sit in his
office.
The PPA Hearing Panel received replies from organizations
that submitted position papers on the petitions of ATI
and ICTSI.
• Chamber of Customs Brokers
• Port Users Confederation
• Association of International Shipping Lines
• Consumer Complaints Center
• Phil. Ship Agents Association
In the case of the Consumer Complaints Center, the Hearing
Panel elevated the issues mentioned to the PPA Board,
because the issues included policy considerations. Included
in the reaction of the Consumer Complaints Center to
the papers submitted by ATI and ICTSI are:
• The PPA Hearing Panel is not ready to hear
petitions for rate increases in cargo handling, unless
the rules are made clear
• Does the Hearing Pnael have the necessary mandate
to undertake the hearing and evaluate the petitions?
• What is the working relationship between the
Port Manager who is the moderator during the public
hearings and the Chair of the Panel in terms of responsibility
for the work done?
• There are violations of existing PPA rules
on the submission of operating and financial reports.
Last call for the in-classroom Basic Shipping Course
on March 18!!! Topics include:
• The role of shipping in logistics
• Overview of the domestic shipping industry
• Shipping regulations, why shipping costs are
high
• Ports operations, regulations, rates
• Shipping operations, PLSA, tramp
• Current issues - rate disputes, cargo handling
petition
• Current issues - needed shipping and ports
reforms
• Cargo owners perspective -performance measurement,
business allocation
Speakers are: Ric Romero (DOTC and MARINA), Hector
Miole (PPA), Col. Leonardo Odoño (PISA), Cora
Curay (XVC Logistics and DMAP ex-President), and myself.
After the Basic Shipping Course, DMAP's next seminars
are:
• Forum on Measuring Logistics Performance (half
day, Apr. 22)
• Shipping Immersion Course (tentative May 20-23)
Back to Top
Zialcita's
Questions
THE PPA has released a position paper in response
to the speech delivered by Congressman Ed Zialcita titled
"Where there is Smoke, there is Fire". There
were 12 ques-tions raised by Cong. Zialcita that the
PPA tried to answer.
Below are some initial comments:
• Question 1 - Is PPA a biased referee because
it owns the ports and at the same time, vested with
regulatory powers, judge, jury and executioner? Part
of the PPA response was "PPA is not biased, as
it did not have any role in the crafting of its charter".
Obviously it is not necessary for PPA to have crafted
its charter to be biased.
• Question 4 - Is it true that PPA, ICTSI and
ATI stand to lose from the competition that Harbour
Center provides? Part of the PPA response was, "It
is clear that no one but MHC stands to benefit whether
or not it is allowed to accept foreign container traffic".
It is clear that PPA does not think of the users of
the port, and the public. Competition from MHC would
slow down, or stall, the continuing rise in international
cargo handling rates, benefiting the users.
• Question 6 - Why is PPA acting like it is a
member of the "consortium"? Part of the
PPA response was: "What exactly is meant by the
question is not clear to PPA". The consortium
was mentioned in Question 5 as the group that wanted
to monopolize the entire port system in the country
under EO 59 (ATI, ICTSI, the shipping lines). How
can PPA pretend not to understand the question?
• Question 7 - Who are the members of this "consortium"?
PPA response: "PPA response is similar to that
under Question 6". Ha-ha.
• Question 12 - TRIPLE BONANZA QUESTION: Why
is it that the PPA keeps on bragging about its net
income of P1.2B for 2003?... PPA response included:
"With regard to the P1.2B net income, it was
never the intent of PPA to brag about its accomplishments".
All the PPA General Managers that we met, from the
days of Commodore Dayan, always bragged about the
PPA's net income, and how the PPA never got anything
from the national budget. But they were all silent
about what kind of service and efficiency we have
at the ports.
We heard the DTI Secretary Juan Santos has been looking
for an undersecretary for logistics. This is a welcome
development that will help the government move away
from thinking and performing in separate islands or
silos. Good luck sir.
DMAP training activities are continuing. After the Intro
to the SCM 2-day seminar in February, DMAP held its
Basic Shipping Course last Friday. This will be followed
by:
• Forum - Measuring Supply Chain Performance
-April 22
• Shipping Immersion Course - May13-15
• Security in the Supply Chain - June
• Basic Warehousing Seminar - July
The destination being eyed for the Shipping Immersion
Course is Boracay.
Meanwhile the theme for this year's logistics conference
and exhibit is still being selected. It will be announced
by mid-April. The conference is scheduled for September
as usual.
DMAP's Logistics Management Program at De La Salle University
continues to attract participants. The following modules
are scheduled for March 19 to May 17:
• Inventory Planning and Control
• Introduction to Supply Chain Management
Address inquiries and comments to Ed Sanchez at tel.
671-8670, fax 671-4793, cell 0918-914-1689, or email
dmap@i-manila.com.ph.
Those interested in DMAP training and other activities
are requested to send their e-mail addresses.
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