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Tariff Rates
and the Freight Forwarder (March 29, 2004)
After more than two years, perhaps there is a need to
review the existing destination charges rates imposed
by freight forwarders for services they render.
Presently, freight forwarders which belong to the only
industry association, the Philippine International Seafreight
Forwarders' Association (PISFA), have agreed on a set
of standard rates to avoid gross variance or distortion
of charges billed to customers.
As implemented last
December 1, 2001, the charges to the general public
and to non-members are as follows:
1. LCL charge PhP600/cbm
2. Docs Fee 600/bl
3. Turn-Over Fee 600/bl
4. Handling Fee 300/bl, min of 2 cbms
5. BL Fee USD 20/bl
6. Collect Fee 5%
7. CAF 3%
8. VAT 10%, applicable to items 1-3 only
The PISFA members also agreed on a uniform set of definition
of services charges, or nomenclature, to further bolster
its efforts of avoiding the possibility of billing twice
for the same service. The uniform definitions applicable
to LCL shipments are as follows:
* LCL Charge includes all costs associated with cargo
transfer from vessel to CFS; preparation and electronic
transmission of manifest data and distribution of hard
copies thereof.
* Documentation Fee is the normal fee of freight forwarders
for preparing the necessary pre-arrival documentation,
includes postage, commu-nication and arrival notice.
* Turn-Over Fee is the normal breakbulking fee collected
by freight forwarders for processing and releasing of
delivery orders.
* Handling Charge covers terminal handling charges paid
to shipping lines for LCL shipments, surveys, tallying
and claims handling.
* Bill of Lading Fee is reimbursement/recovery of BL
Fee assessed by the shipping lines.
* Collect Fee is assessed on freight and other charges
which the principals at port of origin are requiring
the agents at destination to collect from the consignee.
This repre-sents entitlements due agent for handling
correc-tions in behalf of principals and recovery of
bank charges and other expenses incurred at the time
of remittance.
While the above-rates
were submitted by PISFA to the Philippine Shippers in
November 2001, before the rates took effect for PISFA
members, with the recommendation that they be likewise
implemented by non-PISFA members over which the PSB
had direct control, the rates and nomenclature have
to this day been observed only by PISFA members.
But times are changing. When the above charges were
imposed in 2001, the rate of exchange was PhP51 to the
USD, and presently, the exchange rate has breached the
PhP56:USD1 mark. Other costs have also gone up.
There are those who
request for a review at least of the tariff rates of
freight forwarders. How are they compared to those being
imposed by non-members of PISFA? Are there consignees
paying more than the agreed rates? Perhaps comments
from readers of this newspaper will help clarify matters,
and guide the discussion of the review process if and
when made.
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Are we a lechon
manok and Zagu phenomenon? (March
15, 2004)
In the '90s, lechon
manok vendors mushroomed overnight, resulting in fierce
competition. This has been the case with pearl shake
vendors.
It seems the same has
been happening to the business of freight forwarding,
the number of which has been exponentially growing through
the years. Newly approved and accredited forwarding
companies numbered 89 in 2001, 90 in 2002 and 88 in
2003. This brought the total of new forwarding companies
to 267 in a span of three years. Currently, the total
number of forwarding companies is 564.
To this day, forwarders remain under the watch of the
Philippine Shippers Bureau (PSB) under the Department
of Trade and Industry (DTI). As PSB's goal is to promote
small- and medium-sized enterprises (SMEs), it has been
liberal in accrediting new forwarders.
While this is a lofty
intent, the downside is it may lead to the accreditation
of small fly-by-night companies that engage in unscrupulous
activities. PISFA wants to avoid
these companies, which could give the forwarding business
a bad name. However, since PISFA is still under PSB,
we just have to compromise and convince them to implement
stricter accreditation rules.
How lenient are the accreditation rules? For one, the
capitalization required are just as follows:
| a. Breakbulk Agent: |
P250,000 |
| b. International Freight Forwarder: |
P300,000 |
| c. Cargo Consolidator: |
P400,000 |
| d. NVOCC: |
P500,000 |
This has been the minimum
requirement since 1997 when the foreign exchange rate
was still at US$1=P26.
Today, P500,000 would
not even be enough to buy the right equipment (i.e.,
truck for pick up) or pay for several freight shipments.
This is primarily the reason why hole-in-the-wall, fly-by-night
operations proli-ferate. They simply start a company,
run away with the money of clients and overseas agents,
close down the company, and then put up another one.
Another problem is that
not all new applicants are being visited by PSB for
ocular inspection. Since December last year, PISFA has
been working closely with PSB to tackle these issues.
PISFA has submitted position papers requesting for the
following:
1. Trim the four categories into two . Combine the category
of Breakbulk agent as part of International Freight
Forwarder; combining Cargo Consolidator as part of NVOCC.
2. Increase the required minimum capitalization of international
freight forwarders and NVOCC operators to P3 million
and P5 million, respectively.
We are keeping our fingers
crossed that PSB would submit its proposed Administrative
Order based on the above position papers. Hopefully,
it achieves this before there is a transition in the
DTI head following the May 2004 elections.
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The last hurrah
(March 1, 2004)
By BONNIE B. DEL ROSARIO, Secretary General
In about thirty days
or so, this writer will enter the last round, gagarahe
ika nga, and this is my swan song; I intend to pay tribute
to the multitude of individuals I met and did business
and worked with during the past 15 years as Secretary
General of the Association.
Indeed, it has been
a pleasure and a privilege to work for PISFA. It was
my wish to see the Association celebrate its twentieth
anniversary this coming July 16, however, many signs
discourage yours truly from continuing further. The
spirit is willing but the flesh is weak!
Truly, the osteoarthritis
or O.A. I have been enduring the past two years makes
ambulating to make calls and fulfill my duties most
difficult. And as I have jokingly tell friends, I have
you-know-who's knee but not his money (or honey) but
the truth is, I would gladly give up the money part
if only the O.A. is cured. But then we cannot always
have what we desire and so I have to bear it and suffer
the pain.
In retrospect, I have
been extremely fortunate during the last 50-odd years.
I worked for the United States Lines, retiring after
34 years as Senior Sales Representative, hob nobbed
with other Account Executives from the 50s up to the
late 70s. Then I joined a freight forwarding outfit
owned by a former U.S. Lines manager. A little later,
when PISFA's first Secretary General, Dante Castor ran
and got elected as Director, I was hired as his successor
in 1989.
At the outset, the Association had only about 40 members
and its finances were literally in shambles. There was
no Secretariat to speak of and our office space was
rented from a member, Ador de Guzman. The President
then was Eddie P. Linsangan and he vowed to resurrect
and strengthen the Association.
Eddie and I worked incessantly,
contacting and trying to collect monthly dues and arrears
from somewhat indifferent members. Regularly I made
personal calls on these members to make them aware the
Association is there to help them, many times appearing
as a glorified messenger as the only PISFA employee.
In 1993, during the
term of Jun Roxas, our combined efforts plus the dedication
of Eddie, the coffers of the Association were strong
enough so much so that Eddie made a down payment on
a condo unit at the former Tradewinds Hotel and the
PISFA SECRETARIAT was born, truly a tribute to Eddie
P. Linsangan.
From then on, PISFA
got stronger and stronger what with the likes of Mon
de Leon, Lito Colona and Bay Coching taking over as
President respectively in 1995, 1997 and 2001. By then,
the members numbered in the eighties and in May 1998,
the bank mortgage was fully paid and PISFA was the proud
owner of its own office space.
As I have said over
and over again, PISFA had been blessed with a continuous
stream of dedicated Directors as well as conscientious
leaders, each with their own leadership style but all
with a direction going up, never down, ever committed
to fostering professionalism in the forwarding industry.
To the many men and
women who had been my associates and superiors in the
Association I extend my deepest gratitude for their
help and guidance without which I would not have succeeded
in my duties. To all those I may have offended unknowingly,
I seek forgiveness in the same manner I extend my hand
in peace to those who knowingly offended me.
To the members I have
served the last 15 years, my best wishes for your continued
success and enjoin you to support your Association with
all your heart, with all your mind and with all your
strength.
To paraphrase the favorite
lines of one former President, MABUHAY ANG PISFA, MABUHAY
ANG PILIPINAS, MABUHAY TAYONG LAHAT.
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Where
we stand on three issues (February 16, 2004)
(The following is a position paper on three issues.)
1. Reduction of categories of covered firms by the Philippine
Shippers Bureau (PSB) from four (4) to two (2), namely
international freight forwarding and NVOCC operations,
and increase in the required paid-up capital of firms
engaging therein;
2. Participation of PISFA in the screening of new and
renewing firms of their accreditation in the PSB;
3. Removal of the imposition of terminal handling charges
by the shipping lines on the Philippine shippers.
Discussion
On the first issue, the industry, led by the PSB under
the present leadership, held a public hearing sometime
in February 1999 to discuss the following topics:
a. Whether to retain the present number of categories
under the jurisdiction or coverage by the PSB, which
is four (4) or if not, what would be the best classifications
or categories?
b. Whether the present required capitalization of the
covered firms are sufficient, or whether there should
be adjustments made? If so, what would be the proper
capitalization required of covered firms?
In the public hearing, which was properly held with
prior notice, there was a unanimous agreement on the
issues tackled as follows:
a. The current four categories, namely 1) Breakbulk
agent, 2) International Freight Forwarder; 3) Cargo
Consolidator, and 4) Non-Vessel Operating Common Carrier
(NVOCC), were no longer reflective of the current practice,
as the United States at the time had already passed
the Ocean Shipping Reform Act of 1998 (OSRA 1998), wherein
the said law specifies only two categories under the
broader term Ocean Transportation Intermediary (OTI):
i. Ocean Freight Forwarder, and
ii. Non-vessel Operating Common Carrier
b. Considering that the PSB definition and services
of a Breakbulk Agent merely pertain to inbound shipments,
while that of an International Freight Forwarder refer
to outbound shipments, it was deemed proper to merely
merge the two (2) distinctions under the more common
and usable term of "International Freight Forwarder".
c. Similarly, inasmuch as the primary distinction between
a "cargo consolidator" and an "NVOCC"
is the volume of cargo (the former referring to LCL
shipments while the latter indicate FCL shipments),
it would simplify matters to consolidate the two (2)
terms under the category of "NVOCC";
d. Thus, it was agreed that the first category, "Breakbulk
Agent", would be included under the term "International
Freight Forwarder" while the category "Cargo
Consolidator" would be included under the term
"Non-Vessel Operating Common Carrier".
e. Even in February of 1999, the public hearing accepted
the fact that the minimum capitalization requirements
of the four categories, namely
a. Breakbulk Agent P250,000.00
b. International Freight Forwarder P300,000.00
c. Cargo Consolidator P400,000.00
d. NVOCC P500,000.00
were too small to effectively carry out the required
services of such business.
f. More so now in 2004, when the exchange rate has risen
from P26 per US dollar to P56 per U$1. Nowadays, the
required minimum capital of P500,000.00 for an NVOCC
is woefully insufficient to even start operations as
an NVOCC.
g. PISFA therefore reiterates the conclusion and agreement
reached in February 1999 to increase the required minimum
capitalization of international freight forwarders and
NVOCC operators to P3 million and P5 million, respectively.
On the second issue, PISFA requests that it be made
a participant in the accreditation process of firms
seeking approval by PSB to operate as international
freight forwarders and/or NVOCC operators, as well as
in the renewal of such accreditations.
The Association believes that collectively and individually,
PISFA and its members would provide the best information
as to the legitimacy and propriety of the applicants
for accreditation.
Considering the present
state of affairs wherein Filipino forwarders and NVOCC
have been known to fail remitting their due and demandable
payments to overseas principals and agents, as well
as avoid responsibility and liabilities to their customers
merely by collapsing their operations and forming new
companies, participation by PISFA in the deliberations
for accreditation would provide important inputs in
the final determination as to whether or not an applicant
would or should merit approval to be a freight forwarder
or NVOCC operator.
On the third issue, PISFA remembers that The THC charges
only started sometime in 1994 or thereabouts. Prior
to 1994, THC was a charge only imposed in Europe, and
was the Philippine equivalent of Arrastre Fees. In other
words, prior to 1994, there was no THC charge in the
Philippines. Arrastre Charges were supposed to cover
the equipment handling by the private port operators
of the shipments at the ports.
Subsequently, the port
operators started raising their charges to the shipping
lines, and in turn the shipping lines started passing
on to their shippers these increased equipment handling
fees by the port operators in the form of “THC
charges”. The correct procedure is for the shipping
lines to absorb for their own account the port charges
imposed on them by the port operators, and not pass
on to their shippers such costs, because such shippers
are already paying for Arrastre Charges. In short, therefore,
Arrastre and THC charges are both for the same service
by the Port Operators.
In Europe, shippers/consignees only pay for THC, and
are not charged Arrastre Fees.
This is the reason
why PISFA, as well the different shippers’ associations,
both local and international, including the Philippine
Shippers Bureau of the Dept. of Trade and Industry has
made it their goal to fight for the removal of the THC
being charged by the shipping lines.
PISFA fully supports the Philippine Shippers Bureau
in its efforts to eradicate once and for all the imposition
of THC on Philippine shippers.
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Finally, a website
for PISFA!
(February 2, 2004)
This month, PISFA will be launching its own website,
www.PISFA.com. After
several consultations, the company which developed the
websites of AFFA and AFPI, PHILdirect, was chosen to
do this task.
Included in this interactive
website are the following: member listings, upcoming
events, PISFA's history and by-laws, announcements,
links to government agencies, links to other organizations
related to our field, and an open forum.
The website is aimed
at being a major marketing tool to attract potential
members and actively involve existing ones. Exposure
to international organizations through the site will
also provide members with various business opportunities.
Easy access to government
policies and regulations will also save browsers significant
time and effort, thereby promoting efficiency in the
workplace.
Eventually, the need for a monthly newsletter may be
eliminated, as we will be using the website as our center
for communication and a venue for announcing all PISFA
events and meetings. Important issues may also be discussed
through the open forum, which will be an integral part
of the site. Furthermore, since transparency is a major
thrust of the elective officials for this term, the
association's financial status will also be posted and
regularly updated.
A welcome benefit is
the income generating potential of our web page. Advertisements
catering to all the users may be posted with a nominal
charge. In addition, for a minimal monthly fee of P500,
the website developer has offered member companies their
own webpage which will be connected to the PISFA site.
This offer will be specifically tailored to suit the
needs of sea freight forwarders registered with the
association.
For information regarding ad placements and website
development, please contact the PISFA secretariat at
pisfa@compass.com.ph.
This project is indeed timely as we work towards becoming
the most prestigious freight forwarding association
in the country. Your valuable support and cooperation
in this endeavor is essential in making us the true
leader in the industry!
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Plans
and programs for 2004 (January 19, 2004)
By B.B. DEL ROSARIO, Secretary General
For an Association that is on its 20th year, PISFA has
been blessed with a continuous stream of conscientious
officers who have not hesitated to promote and defend
its goals and ideals, that of pure and simple professionalism.
Yours truly have been the S. G. of PISFA since 1989
and served all the Presidents, except the first (founding
President Mr. Henry L. Tsai). Since that year, the Association
has had Eddie P. Linsangan, Julio G. Roxas, Jr., Ramon
T. de Leon, Angelito E. Colona (two terms), Bayani C.
Coching and Monico E. David, Jr., for an abbreviated
three-month term. Erich H. Lingad was elected eighth
PISFA President to take over the shortened term of Mr.
David.
Together with Erich,
the other elected Directors were Irene M. Manguiat (EVP),
Alicia S. Mayo (VP-External), Nelson M. Mendoza (VP-Internal),
Tom K. de Vera (Auditor), Benny C. Anunciacion (Treasurer)
and Jose Roberto A. Adriano (Corporate Secretary). These
Directors immediately buckled down to work and instituted
quite a number of changes.
These Directors, unlike the previous Board Members,
have an average age of 40 years and as may be expected,
they are spontaneous without being impulsive and daredevils.
They are like their predecessors - determined, strong-willed,
hardworking, honest and very principled. And working
with them is indeed a pleasure even for a septuagenarian
like yours truly.
For one thing, the working committees were increased
from six to nine, and decreed that the memberships in
these committees be increased to involve as many PISFA
members as possible, and that no individual may sit
in two committees.
The Directors too, have shown willingness to attend
various forums almost to the extent of neglecting some
of their corporate duties. They communicate with each
other regularly to disseminate information. The Membership
Committee for instance will embark on a campaign to
enhance interest in PISFA membership by contacting prospective
applicants, briefing them on the advantages and benefits
of being a PISFA member. This Committee will also try
to reinvigorate the interest of some members who shy
away from General Membership Meetings and just send
their minor staff people to attend.
In Training and Education, the Association will make
major changes in conducting Basic and Advanced Freight
Forwarding. PISFA will discontinue three-day training
exercises and instead will have daily evening seminars
so that more participants may join without disrupting
or neglecting their office duties. And don't look now,
the FEDFAP/Ateneo Center for Continuous Studies will
have their Diploma Course for Logistics and Transport
Management within a month or two.
In Sports, the Association recognizing its value in
developing fellowship and camaraderie among Members,
will introduce other activities, team-oriented or individual,
in order that PISFA members can compete in a friendly
atmosphere and acquire the needed physical exercise.
Very soon, there will be a badminton tournament for
both sexes following numerous requests by members. Other
sports activities are also being studied.
In the Ways and Means Committee, the prospective projects
include concerts by up-and-coming singers, stand-up
comedians and movie premiers. This Committee is chaired
by a lady Director, Ms. Alicia S. Mayo, and members
of her group include Mesdames April Coching-Lim, Ching
Geniza, Vee Natividad and Vivian Vocales.
The Association intends to make use of its membership
in other regional forwarders associations by inducing
those associations to encourage their respective members
to be represented or connected with PISFA members to
ensure no-nonsense and professional dealings.
Once totally achieved,
there would be a resurgence of interests in memberships
in associations, both locally and foreign and that would
be absolutely good for PISFA.
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What
makes a company happy (January 5, 2004)
By TOM K. DE VERA, Auditor/Director
Whether your business is in banking, manufacturing,
real estate, public service, sales and marketing, it
is an accepted axiom that there should be a break between
days of activities. There should be sports or games
lined up within the year.
In the Philippines we see companies conducting regular
basketball tournaments. Others are into bowling and
lately, many have been into the very popular sport,
badminton.
Why is this?
These activities foster camaraderie among employees
or workers from different departments. They also provide
the chance for establishing friendships. One of the
important things needed in every business - coordination
- is acquired even without trying. Coordination avoids
miscommunication; if everyone understands the plans
and directions of the company, there is harmony. As
a result, we can avoid work stoppages or strikes.
The physical benefits arising from sports is another
important consideration. Without noticing it when we
play, we move a lot, we run, jump, laugh, shout - and
presto, stress is eliminated! Automatically, our blood
pressure and sugar levels normalize, and cholesterol
is minimized.
Each company that engages in sports will therefore benefit
financially with strong, healthy and efficient employees
and high productivity. There will be fewer employees
that need hospitalization, minimal sick leaves, zero
accidents and high efficiency in performance.
That is why in our industry, freight forwarding, we
have several sports activities calendared every year
to make sure we reap the abovementioned benefits.
PISFA has bowling, billiards, summer sports, water sports
and, of course, golf for executives. And because of
repeated requests from our lady bosses, we will have
a badminton tournament in the first quarter of 2004.
This is to make sure all members can participate in
any of the sports we have lined up.
So from now on, let us work and play and to make every
company happy.
2004
Q4 | 2004
Q3 | 2004
Q2 | 2004 Q1 | 2003
Q4
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