PortCalls

New US cargo security rules to take effect in two weeks

ADVANCE shipment details must be sent electronically to authorities before the goods arrive in or leave the US, according to new cargo security rules announced by the US government.

The regulations, intended to better identify high-risk land, sea and air shipments, go into effect in two weeks, the Department of Homeland Security said. "The rule will allow our inspectors to collect the advanced manifest and the cargo information necessary for us to identify high-risk shipments that may pose a threat," Homeland Security Secretary Tom Ridge said.

The new rules expand regulations passed in 2002 that require all cargo ships to provide Customs and Border Protection with a detailed description of US-bound shipments 24 hours before the vessel is loaded.
Most non-maritime shipments enter the US without being screened. The new regulations will require manifest data to be sent electronically so officials can analyze it using computer databases.

"We"re going ... even further to help meet one of our chief objectives - to strengthen homeland security while ensuring the free flow of goods and commerce across our borders and through our seaports and airports by requiring all modes of transportation to provide us advanced information," Ridge said.

Congress has stepped up criticism of cargo security, especially after new threats of attacks that might use cargo planes and some recent embarrassing incidents involving lax security and cargo shipments.

Under the new rules, airline and courier services must send their manifests four hours before arriving or two hours before leaving the US.

Manifests for rail cargo must be sent two hours before arrival or departure at the border. Trucking companies must send the information up to an hour before arriving in the US.

Customs and Border Protection (CBP) officials will run the data through law enforcement, commercial and Homeland Security databases to determine whether a shipment could be "high risk" and potentially contain illicit cargo. If so, the goods will be searched at the point of US entry.

Officials will also check outbound cargo.

"It is important we take a look at that in terms of the terrorist threat," said CBP commissioner Robert Bonner.
"These are called licensable goods, that may either be weapons systems and/or certain kinds of technology that we don't want to find into the hands of rogue states or terrorists."

Lorenzo Shipping income sinks 17.1% in first nine months

PURE freight operator Lorenzo Shipping Corp. recently reported a net profit of P4.54 million for the first nine months of the year, down 17% to P22 million from P26.54 million in the same period last year.

For the third quarter alone, the company's net income dropped 86% to P0.42 million from P2.9 million during the comparable period in 2002. The decrease was due largely to the 10% decline in operating revenue for the period, the company said.

"Total operating revenue for the third quarter was P261.4 million. This is P29.9 million short of last year's P291.3 million," it reported.

The company attributed the drop to weak market conditions especially in the manufacturing sector and reduced volume from foreign shipping lines.

Despite the decline, the company said earnings for the period were offset by the 6% improvement in operating expenses, 20% reduction in interest and finance charges and 56% increase in auxiliary services which include arrastre and trucking.

Revenue from January to September fell 5.9% or P46.23 million to P778.20 million from P824.43 million.
Total freight liftings generated for the third quarter was P21.7 million, down 11% or P2.7 million from P24.4 million.

The company said interest and finance charges dropped 20% due to effective cash management measures adopted at the start of the year. This was also attributed to the reduction in interest rates and reduction in principal amount of loan due to loan repayments.

For the remaining quarter of the year, Lorenzo said it expects a robust domestic economy as most customers have expressed projection of growth.

"The months of October and December are usually the peak season. Therefore, we anticipate a strong volume support for the last quarter of the year," the company said.

The absence of vessels scheduled for drydocking is also a factor considered to contribute to better sales performance for the last quarter of the year, it added.

Shipping operators train for E-port

SHIPPING operators recently sent their representatives to join E-port training sessions in preparation for the full operationalization of the E-port module nationwide.

Among the lines who participated were Sulpicio Lines, Negros Navigation Company, Inc. (NENACO), WG&A, Lorenzo Shipping Corp. and Solid Lines.

The training includes use of the web-based E-port system and the registration and use of digital certificates and signatures, the port authority said.

After discussing the file format requirements of E-port, the shipping operators were given access to an e-port test site in coordination with the project consultants.

WG&A is finalizing its registration in E-port and conducting some test data submission. NENACO and Sulpicio Lines, on the other hand, are finalizing the format of their electronic file based on the test submissions conducted.
PPA said the launch of the P750-million web-based facility will improve efficiency and enhance revenue generation as it will ease processing of documents of shipping lines, owners and agents.

PPA general manager Alfonso G. Cusi said the system would also serve as a backbone for e-trade, in partial compliance with the E-Commerce law.

E-Port is an integral part of the computerization initiative of PPA known as PROMPT (Providing Reliable Operation and Management of Ports thru Technology), an information technology project undertaken by PPA with Unisys Philippines Inc. and Economic Development Foundation.

Subic port project faces opposition

OLONGAPO CITY - Officials and residents of this city have reacted strongly to a statement by Japanese Ambassador to the Philippines Kojiro Tanako that the Subic Port Development Project is already a "done deal".

Olongapo City Mayor Kate Gordon said local residents are alarmed because the project would destroy the marine environment of Subic Bay, depriving thousands of fisherfolk from Olongapo, Zambales and Bataan provinces of their means of livelihood.

Mayor Gordon said that it is only now that the Subic Bay Metropolitan Authority (SBMA), which is sponsoring the project, is seeking the issuance of an Environmental Compliance Certificate without conducted the required public hearings and after the project had been bid out.

Tourism Secretary Richard Gordon, concurrently Cabinet Officer for Regional Development of Central Luzon, accused the SBMA of "diabolically hiding the project from the people who are the direct stakeholders, preventing them from expressing their objections to the project."

Gordon pointed out that under the SBMA plan, the Philippine government would get a loan of $157 million from the Japan Bank for International Cooperation (JBIC), while the Philippines would put up a counterpart fund of $28 million, to finance the project.

"This amounts to P10 billion that the Filipino people would have to shoulder for a project that is unnecessary and non-viable," Gordon said. He pointed out that it is not certain that the annual target of 900,000 TEUs (twenty equivalent units) of cargo volume would be reached by the port to pay for the investments.

"Of course the Japanese are eager for this port development in Cubi Point to materialize, because as all concessionary loans go, the contractors and consultants will all be Japanese, who will benefit, along with the Japanese economy. But in the end, the Philippines will foot the bill," said Gordon.

City Councilor Ted del Rosario warned "the reclamation of Cubi Point will permanently damage Subic's environment, fragile marine ecosystems and scenic view because over 2.5 million cubic meters of soil will be dumped into Subic bay. There will be damage to coral reefs, hatching grounds and fish sanctuaries, as well as mangroves."

In their talk with Sec. Romulo Neri, secretary general of the National Economic and Development Authority (NEDA), the Gordons pointed out there is a better alternative to the port development project.

They told Neri that in 1993, the World Bank had recommended expansion of the Naval Supply Depot (NSD) in Subic which can handle a capacity of one million TEUs per annum. The concept then was to privatize the port, so that it could be developed without any government financial exposure.

Gordon said the private sector was willing to guarantee the government a concession fee of P140 million annually for the operation of the NSD. "It is very difficult to explain to the people why the government would incur a foreign loan of $157 million and invest P10 billlion in an unnecessary and probably non-viable project," said Gordon.

PISA: Lifting of cabotage does not assure lower shipping costs

THE Philippine Interisland Shipping Association (PISA) said relaxing the cabotage rule does not guarantee lower shipping costs in the country.

The statement was made after the Northern Mindanao Shippers Association and the Davao City Chamber of Commerce and Industries, Inc. (DCCCII) claimed interisland shipping rates are higher than ocean freight rates and relaxing the existing cabotage rule would allow for cheaper shipping rates.

PISA executive director Col. Leonardo Odo–o said freight rates for Manila-Singapore and for Manila-Davao presented by DCCCII during the recently concluded Mindanao shippers' conference were not comparable since the Manila-Davao rate cited included terminal handling and documentation costs and the Manila-Singapore rate was purely ocean freight rate.

"Instead of working on the lifting of the cabotage, we encourage our clients and shippers to join us in changing trading practices and restructuring the maritime industry's legal framework," Odo–o suggested.

"It is only through major business planning can we effect a reduction in logistics costs. The lifting of the cabotage is not the solution," he said.

In particular, he suggested that traders and shippers "look into changing trade practices such as shifting the mode of transporting grains from containerized to bulk shipment in order to lower transport cost for Mindanao to Manila.

"For example, from P0.43 per kilo (grains shipped in containers) may be decreased to P0.30 per kilo when shipped in bulk as well as shipping fruits and vegetables in reefer containers to lessen spoilage and increase profits," he said.

2004 Q2 | 2004 Q1 | 2003 Q4

December | November | October

November 26 | November 24 | November 18 | November 5 l November 3