The Philippine Chamber of Commerce and Industry (PCCI) has identified short and long-term solutions to the port congestion problem.
A palliative solution, PCCI said in a policy paper entitled “Port Congestion in a Congested Metropolis”, is for the city government of Manila to lift the truck ban for one to two months to “alleviate port congestion.”
Others include requesting international shipping lines to temporarily waive container detention and demurrage fees; transportation of cargoes to Subic using container barges; night-time deliveries; and the opening of additional depot and truck holding areas.
PCCI said stakeholders should request foreign shipping lines, through the Association of International Shipping Lines, to temporarily waive container detention and demurrage fees for the next two months until the situation normalizes to prevent shippers from incurring additional costs.
PortCalls sources from the international shipping community, however, said waiving of charges is a commercial decision undertaken not collectively but by individual lines.
On the proposal to transport containers by barge to Subic port, PCCI said this will “free up port space” in Manila. Container barging could also be used to off load containers from international vessels since presently ships wait at anchorage for an average of five days before they can dock at Manila ports to discharge their cargoes.
On July 8, such a service will actually begin. The twice-a-week Subic Super Shuttle service will carry containers from the Manila International Container Port to Subic and vice versa using a vessel with a capacity of 138 twenty equivalent units (TEUs).
There are also plans by listed company Harbor Star Shipping Services, Inc. to barge containers from Manila ports to Batangas, Bataan or Subic.
PCCI said there is likewise a need for cargo owners to provide a night time delivery facility for truckers.
“In the long run, this well help ease the traffic in Metro Manila since trucks will be able to make deliveries at night instead of only having a delivery time between 10:00 am and 3:00 pm in a single day. “This, in effect, spreads the volume of trucks making deliveries from five hours to 13 hours,” it explained.
Aside from night time facilities, PCCI called for a temporary container yard near the port where shippers can easily deposit/withdraw empty containers, noting that yards outside the port are now at full capacity.
There is also a requirement for additional truck holding areas with Cavite, Bulacan and other nearby locations as possible sites, PCCI said.
Long-term solutions
For the long-term, PCCI recommends shifting of container traffic to the ports of Batangas and Subic.
In addition, it wants to put a cap on the volume handled by the Port of Manila, citing as example the policy implemented at the Laem Chabang Port in Thailand.
“Maximizing utlitization of the Subic and Batangas ports is not only the correct long-term solution to the congestion in Metro Manila but sends the correct signal that further port developments should happen in these ports,” PCCI said.
Batangas only has a 3% utilization rate on its 300,000-TEU annual capacity. Subic, on the other hand, has a 6.4% utilization rate. The New Container Terminals 1 and 2 in Subic have a combined annual capacity of 600,000 TEUs, PCCI pointed out.
“PPA claims that the curent contracts in Manila call for the construction of additional berths. This perhaps is the best time for the government to renegotate the contracts so that development of new terminals should already happen in Batangas and Subic ports,” the chamber said.
Since Manila Ordinance No 8336 on the truck ban was implemented on February 24, PCCI said the most adversely affected have been stakeholders and shippers (exporters, importers, and manufacturers), and transport service providers particularly shipping lines, trucking companies and terminal operators.
Effect on manufacturing
The ordinance has since disrupted operations of manufacturers, according to PCCI. Input materials have been held up within ports affecting the firm’s production; exporters have missed delivery deadlines and penalized in the millions of dollars by their principals; some exporters dealing with perishable goods have lost sales since they cannot export their products out of Manila; shippers have been facing increasing transport cost; and shipping lines reported declining cargoes bound for Manila, it said.
The limited number of truck turnaround has forced truckers to increase their rates by at least 100% while shipping lines started to levy add-on charges, PCCI said.
Shippers have also been charged container detention/demurrage fees since they cannot deliver containers on-time with ports and surrounding container yards at maximum capacity.
PCCI said since ports are handling shipments beyond their capacity, shipping lines can no longer off-load their cargoes at the port, resulting in unnecessary waiting time which can be as long as five to seven days at anchorage.
Liners that still call Manila have begun collecting add-on fees such as congestion fee, demurrage fee, and others on top of freight cost as a cost-recovery mechanism. According to shippers, these additional fees range from P25,000 to P35,000 per TEU.
PCCI cited the Citigroup study released in early March that the disruptions could lead to an annual loss of from P61 billion to P320 billion, or as much as 5% of the Philippines’ gross domestic product.
The PCCI policy paper is the result of the PCCI Transportation Forum held last June 19. – Roumina Pablo
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