Manila truck ban lifted; cargo community welcomes development

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Trucks_on_RoxasManila Mayor Joseph Estrada announced on Saturday the lifting of the Manila truck ban, blamed by many as the cause of port congestion.

The cargo community collectively heaved a sigh of relief but doused cold water on hopes that the port mess will immediately be untangled. All industry executives reached by PortCalls noted it would take many more months to undo the negative effects of the congestion.

At a televised press conference Estrada said the ban will be lifted indefinitely starting noon of Sept 13.

“I am avoiding the conflict kaya (that’s why) we withdraw and let the national government take over,” he said.

Earlier, Cabinet Secretary Rene Almendras, head of the Cabinet Cluster on Port Congestion, said government was looking at asking for emergency powers for President Aquino to lift the Manila truck ban to resolve port congestion.

Asked how the lifting of the ban will affect port decongestion efforts, Christian Gonzalez, head of Asia Region at International Container Terminal Services, Inc, operator of the Manila International Container Terminal, told PortCalls in an email: “It’s going to take months still (to decongest) but we will be able to shorten it as much as possible with everyone working together (operators, truckers, and cargo owners). The first step will be officially convening a task force meeting with all the parties including MMDA (Metro Manila Development Authority) and we will probably make someone completely in charge of coordinating activities until this is solved. Even competitors (all sectors) will have to share information and work together. All other actions will be determined during the meeting.”

Philippine International Seafreight Forwarders Association (PISFA) president Mariz Regis welcomed the lifting of the ban.

“But decongestion won’t happen overnight,” she told PortCalls, adding it’s hard to say when ports will finally be declogged. “Let’s see how things turn out in the first week.”

Regis said “government and various stakeholders must continue to work together” to clear the mess at the ports.

“This is a wake-up call for the country to put in place a roadmap for transport and logistics. We definitely need medium and long-term plans for the sector,” Regis said.

PISFA director Erich Lingad said a return to normalcy at the ports may happen only next year because cargo volumes are now on the rise due to the peak shipping season.

Atty Max Cruz, general manager of the Association of International Shipping Lines, for his part said the lifting of the ban is “good news for the country. But the effects… cannot be felt immediately considering the destructive mess it (ban) has created for business and the supply chain. The lifting of the ban is only the first step on the road to normalcy. It will take a couple of months before things normalize.”

Confederation of Truckers Association of the Philippines president Ruperto Bayocot said the lifting of the ban will normalize port operations “earlier than expected” or within two to four months.

The Department of Trade and Industry has earlier said decongestion will only be achieved by early 2015.

Bayocot told PortCalls he also hopes truck turnaround will now be “four to five times a week from the current three to four a week.”

Sleep-deprived truck drivers perpetually stuck in traffic, he said, can also now “get more sleep”.

Integrated North Harbor Truckers Association (INHTA) president Teodorico Gervacio in a phone interview said they are still waiting for a copy of the order before taking any action.

In addition, the association is also watching out for directives from government, considering there are still many truck-related ordinances currently being imposed by other agencies and local government units.

While the lifting of the truck ban will mean roads closed to trucks will now be opened such as Quirino, Nagtahan, Kapulong, and Sta. Mesa, it will also mean the closure of Roxas Boulevard to trucks, as was the situation pre-Manila truck ban, Gervacio pointed out.

Arnel Gamboa, president of the Supply Chain Management Association of the Philippines, said the lifting of the ban will not translate to “major improvements as the difference (the order brings) is only a few hours (in truck operating) window. The move may be more political in nature than actually bringing the right solution. We need to actually lift the truck ban completely (in Metro Manila or) at least (adopt a) moratorium this peak season to help catch up with backlogs.

“The situation is more serious (and requires a greater solution) than just reverting to the old (MMDA) truck ban scheme. We can’t undo the mess that has unfolded.”

MMDA chairman Francis Tolentino in a statement on the agency’s Facebook account said, “I thank the good Mayor of Manila for his concern in trying to find solutions to decongest the port of Manila. As we revert back to the pre-Manila ordinance situation, I am confident that with the help of all concerned private and government stakeholders, a sustainable solution will be crafted. I will immediately convene the Metro Manila Mayors Special Traffic Committee to craft a responsive scheme that will incorporate the City of Manila’s efforts with that of the national government.”

The controversial truck ban policy, enforced in late February, has caused massive congestion at Manila ports and spawned such problems as pileup of containers, international shipping lines skipping Manila ports due to lack of container space, traffic gridlocks in the metro, and huge losses for businesses due to production delays and unmet delivery commitments.

The ban has translated to higher truck rates of as much as 300%; adoption of port congestion surcharges, among other types of surcharges; and ultimately increased prices of goods. The Bureau of Customs also saw its revenue collection dip in the first month that the ban was implemented.

Also a month into the implementation of the ban, US banking giant Citigroup came out with a study that said the ensuing transportation bottleneck could pare at least 1% to as much as 5% off the country’s gross domestic product (GDP), mostly affecting non-technology export commodities.

The GDP costs were estimated to be as low as P61.2 billion to as high as P320 billion, dwarfing the potential benefits of P30 billion in real terms from the reduced traffic envisioned by the truck ban.

With government and the private sector scrambling to deal with the myriad problems brought on by the Manila truck ban, all kinds of measures have been implemented. These include the adoption of the 24/7 express trade lanes, the last mile route, forcible transfer of overstaying Customs-cleared cargoes to Subic and Batangas ports, and higher storage fees for overstaying cargoes.

The fate of these measures is unclear now that the ban has been lifted.

The Manila truck ban has, however, stirred up activity at the underutilized Subic and Batangas ports, with shippers looking for a way to ship their cargoes without going through Manila ports.

Container traffic at Subic Bay’s New Container Terminal 1 surged 243.7% in August to 8,770.25 twenty-foot equivalent units (TEU), the highest monthly volume this year, from 2,551.75 TEUs posted in August 2013. This brings throughput for the first eight months of the year to 34,746.25 TEUs, up 54.58% from 22,437.75 TEUs year-on-year.

The eight-month volume is just 0.3% or 100.75 TEUs shy of the 34,847 TEUs full-year volume recorded in 2013.

Asian Terminals Inc, which operates Batangas Container Terminal, reported a 254% increase in container throughput at the terminal in the second quarter of the year. The volume in the first half of the year has already surpassed the volume handled for the entire 2013.

PortCalls sources said the Manila congestion has reached Batangas port, with payment for arrastre services now taking two to three hours. There are also reports of container equipment not working properly and the lack of truck operators in the area.

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