The Philippine Bureau of Customs ordered all container yard/container freight station (CY/CFS) operators to strictly comply with Customs Memorandum Order 24-2001, which prescribed uniform rates charged by CY/CFS operators outside the customs zone.
Customs deputy commissioner for Assessment and Operations Coordinating Group (AOCG) Atty Agaton Teodoro Uvero issued the memo dated November 5, following receipt of “written complaints of alleged overcharging” by CY/CFS operators.
“Pending results of the investigation being conducted, all CY/CFS operators are hereby ordered to strictly observe the uniform rates prescribed under CMO 24-2001. Failure to comply shall be subject to the applicable penalties and sanctions provided under Section IV.2 of the same CMO,” the memo stated.
Among others, CMO 24-2001 prescribes a storage fee for consolidated import cargo of P20 per revenue ton per day from the date of the stripping; for heavylift/oversize over three revenue ton single unit cargo, P1,200 per revenue ton; and for dangerous cargo, 100% surcharge on storage, stripping and handling.
First-time violators will be penalized P50,000 and ordered to refund 100% of the overcharge to the consignee.
For the second offense, the district collector will order the immediate suspension of transfers of containers to the erring Cy/CFS operator for a period of one month.
For the third offense, the district collector will order the immediate suspension of transfers to the erring Cy/CFS operator. The district collector will also initiate proceedings for revocation of permit to operate against the erring operator.
There have been similar earlier attempts to strictly implement the customs order but to no avail. Former Manila International Collection District district collector Ricardo Belmonte issued a memorandum last January 31 directing Romulo Pagulayan, chief of the Piers and Inspection Division, to ensure the provisions of CMO 24-2001 are followed.
There is a pending petition by CY/CFS operators, represented by the Association of Off-Dock Container Yard Operators of the Philippines, to increase rates but this is being contested by port users.
In a position paper submitted by the Port Users Confederation (PUC) to Finance Secretary Cesar Purisima and BOC director for legal service Atty. Simplicio Domingo II, the association said “there are no compelling reasons to allow an increase as current rates are more than enough to cover the overhead expenses including reasonable margins of operators.”
It said, “In addition, operators already charge additional charges beyond what is by CMO 24-2001. On many occasions, freight and CY/CFS charges on LCL shipments when added are more than the amount for a full 20-foot FCL (full container load) shipment with an average capacity of 33.2 cbm and 21.8 revenue ton (versus the proposed revenue ton rate of P6,989 / 1 cbm).”
“The proposed rate is excessive and unjustified,” PUC said. It noted that compared to the Philippine Ports Authority’s approved 15% increase in cargo-handling charges this year for implementation in two tranches, the “proposed rate per revenue ton/CBM is more than 200%”.
Citing a Doing Business 2010 report, PUC said the Philippines, among its ASEAN peers, already has the highest cost for both imports and exports. It also cited the recent competitiveness report of the World Economic Forum where the Philippines ranked 112th out of the 133 countries surveyed on quality of port infrastructures.
The confederation noted that “competition not only among the major seaport but also in the handling of LCL (less-than-container load) shipments in the country is very weak”, and that “government regulation on cargo handling services is loose and susceptible to lobbying from vested interests.”
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