AT LEAST P1.75 million of cash a month in Philippine-based freight forwarders’ money is saved from getting tied up as container deposit following the signing of a memorandum of agreement between forwarders and foreign shipping lines, according to a PortCalls source who asked for anonymity.
The agreement between the Philippine International Seafreight Forwarders Association (PISFA) and the Association of International Shipping Lines (AISL) was designed to rationalize procedures in posting container deposits.
Under the MOA, participating freight forwarders are allowed to deposit checks with shipping lines for containers consigned to them. This is a departure from the old arrangement under which forwarders are required to deposit cash to guarantee return of containers to the liners.
For an average-sized freight forwarding company shipping 50 containers a month, a P5,000 container deposit would translate to P250,000 per month of cash freed up for other productive purposes, the source said.
There are 21 PISFA members that have signed the MOA, with potential total savings of P5.25 million a month. But since there are only three AISL members participating in the agreement so far – APL, K Line, and Hapag Lloyd – the savings are necessarily smaller, at around P1.75 million, the source said.
The MOA, signed by PISFA president Irene Manguiat-Tan and AISL president Edgar Milla, is effective from April 16, 2013 to April 16, 2015 but was operationalized in July.
Explaining the low participation rate among AISL and PISFA members, Atty. Maximino Cruz, AISL general manager, said both parties still need to realize the benefits of the agreement.
“Participation in the AISL-PISFA MOA is purely on a voluntary basis,” he told PortCalls.
“To date, there are three participating lines and 21 freight forwarders joining the program. It is expected that others will adopt a wait-and-see attitude until they are convinced that the program will work out successfully. We have already rolled out the program starting July 1. We are optimistic that there will be more participants once they realize the benefits,” Cruz said.
Under the agreement, a PISFA member company will be allowed to deposit company checks for container deposits with AISL participating carriers. The check will be returned to the PISFA member within three to seven days after the forwarder returns the container.
The cost of repairs for damaged containers and detention charges will be deducted from the container deposit; if the deposit is insufficient to pay for the costs, the forwarder will be asked to pay up.
But the cost of repair or detention charges on a container is determined by the shipping lines.
Participation by PISFA members in the scheme is not automatic: Each has to go through a separate accreditation to be conducted by PISFA to determine their suitability for the program.
As part of the agreement, PISFA has deposited a P1-million cash bond to secure payment of the obligation if the check deposited by its accredited member is not honored by a bank.
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