PH truckers seek 5-year moratorium on proposed 15-year truck age limit

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ID-100307943Philippine truckers are opposing the government plan to require a maximum age of 15 years for trucks before granting operators a franchise, saying it will sound the death knell for the industry.

Industry associations fear that much of the current fleet in the entire Philippines will not be eligible to operate and that it would take an investment of more than P50 billion to ensure compliance to the measure.

In a position paper submitted to Land Transportation Franchising and Regulatory Board (LTFRB) chairman Atty. Winston Ginez, the Confederation of Truckers Association of the Philippines requested a five-year moratorium on the proposed policy.

CTAP and Integrated North Harbor Truckers Association (INHTA) insist that roadworthiness, not age, should be the basis for a government grant of a Certificate of Public Convenience (CPC) to truck operators.

CTAP said it supports elevation of the country’s trucking industry, and that it is to the truckers’ advantage that the “quality and standard of trucking service shall take off initially to a higher notch to be competitive with our neighboring countries in this era of free market and globalization” as well as regional integration.

However, the association noted that the proposed 15-year age limit “is the greatest test that the industry (has) ever known and (there are) fears (it will) not survive… a fateful challenge, a death embrace, so to speak, to the struggling trucking industry.”

According to CTAP, the trucking industry for years has faced an “acid test”. In 2014, it had to deal with these obstacles: the Manila City daytime truck ban; congestion at the Port of Manila; issuance of Joint Administrative Order No. 2014-01 among the Department of Transportation and Communications (DOTC), LTFRB and Land Transportation Office increasing the fines for colorum (operating without franchise) vehicles; illegal apprehension of towing companies; and implementation of the revised maximum allowable gross vehicle weight for trucks by the Department of Public Works and Highways under the anti-overloading law (although implementation for trucks under codes 12-2 and 12-3 is temporarily suspended under that law).

19,000 trucks put out to pasture

Based on LTFRB’s own data, in five years’ time, a significant number of CPCs can no longer be reconfirmed upon expiration since most of the trucks nationwide are currently more than 15 years old.

According to INHTA president Teodorico Gervacio, LTFRB identified 19,000 trucks for phase-out from 2015 to 2019 if the proposed policy is implemented.

Gervacio said replacing these trucks would mean spending about P51.3 billion.

CTAP noted that its member truckers, due to “thorny” operations in the industry, just break even and find it difficult to save up for a new truck.

Truck operators usually only have the capacity to purchase second-hand trucks from Japan that are mostly 10 years old or more. CTAP and INHTA have earlier said a second-hand refurbished truck is just as good, or even better, than a new one if properly maintained.

A quality second-hand truck costs around P2.7 million so that any return on investment for such is “highly improbable” if a CPC is valid for only five years, CTAP said.

“The LTFRB’s policy of issuing CPC for a non-confirmatory period of one (1) year for trucks 15 years and above was confiscatory and disadvantageous on our part for it blurs all distinction between a dilapidated and a roadworthy truck,” the association pointed out.

Industry paralysis

CTAP said the “logical consequence” of implementing the proposed policy is to paralyze the Philippine transport industry with the inadequate number of trucks qualified for a new or renewed CPC.

If this policy pushes through, truck operators will not be able to cope with the demand. It would be ironic, CTAP said, if the demand for trucks grew but supply dropped.

At the same time, trucking rates will increase with the need to re-fleet and replace old units, making the country less competitive than its neighboring countries, CTAP said. As regional integration brings in more economic activity, the association said the government’s orientation must be to protect the domestic trucking industry.

Higher trucking rates will also be shouldered by the truckers’ clients and, ultimately, by consumers.

Moreover, CTAP noted that not all of LTO’s regional offices are equipped with motor vehicle inspection systems (MVIS). The MVIS was put in place several years ago to provide a computerized and automated system of reliably and effectively testing motor vehicles to ensure they comply with safety and emission requirements. The program is supposed to, among others, eliminate non-roadworthy motor vehicles.

In lieu of the proposed policy, CTAP requests for “proper consultation and meeting with the LTFRB together with the other concerned and affected sectors in order to formulate a guideline that would clearly define the requirements and specifications of a roadworthy vehicle.” – Roumina Pablo

Image courtesy of nitinut at FreeDigitalPhotos.net