*Looking Forward to October (September 27, 2004)

*Association Activities (August 16, 2004)

*PISFA at 20 (July 19, 2004)       

*LCL Import Charges (June 14, 2004)

LCL Import Charges

By ERICH H. LINGAD, President

I was recently invited by an Ateneo Entrepreneurial Management Class to speak about shipping in general and explain the charges involved in importing and exporting. I presented the following charges for LCL (Less than a Container Load):

1.) (PISFA) Forwarders LCL charges

2.) Warehouse Operators' charges per CMO 24-2001

3.) Brokerage Charges as per Customs Administrative Order 1-2001

The students were stunned with these charges and discouraged from engaging in the import business. What they had in mind was the Balikbayan Box charge of USD60 from Los Angeles to Manila (inclusive of all charges). I had to explain that these boxes should only contain personal effects and not commercial goods subject to taxes and duties.

It was difficult to justify all the local charges to the students. The LCL industry is really prohibitive for importation of goods in small quantities. Importers know that once the cargo is more than 10 cbm, it is better to ship using FCL (Full Container Load) directly through shipping lines, thus eliminating the need for forwarders.

But how did the current LCL charges come about? If you would recall, local charges skyrocketed partly because of the practice of forwarders giving rebates to entice agents to consign boxes to them. The one who gave the highest rebate naturally got the business. Currently, rebate to agents range from USD25 to USD40. Note that non-PISFA members could give higher rebates since they don't have to follow minimum charges set by PISFA. They could bill the end-customer/consignee a higher rate.

Since PISFA forwarders are only allowed to bill the end-customer so much, they allowed warehouse operators to start billing the customers as well. In the past, warehouse operators would bill forwarders for their services and not charge end-customers separately. Now, warehouse operators no longer charge forwarders but bill the end-customer directly. And, they even give forwarders rebates of as high as P1,000 per cbm. (Some even pay in dollars.)

In some instances, forwarders pressure their warehouse operators to find ways to give them higher rebates. Sometimes, the warehouse operator resorts to misdeclaring the size of the shipment (i.e. by indicating a larger size than actual) so they can collect more from the customer.

Ideally, since the end-customer nominates the forwarder to be used, the customer should only deal with and be billed by the forwarder. Since the forwarder nominates the warehouse, the warehouse operator should bill the forwarder, not the customer directly. In the US, warehouse operators only charge storage and forklift fee. All other charges are billed by the forwarder.

In the past, no government agency regulated freight forwarders. Warehouse operators have also been unregulated and none received sanctions for overcharging.

The question we now face is: "Are we going to allow this to continue?"

PISFA and ACOP recently met to address this issue. The two associations also met with the Philippine Shipper's Bureau (PSB) to seek guidance. It was agreed that PISFA and ACOP would sign a Memorandum of Agreement (MOA) and designate PSB and BOC as the government body to ensure that the rates in the MOA are followed. All forwarders (whether PISFA or not) and warehouse operators (whether ACOP or not) will be required to follow the standard charges or face sanctions such as substantial fines and the cancellation of accreditation/license. To eliminate rebates and excessive charges, the US practice will be adopted, in which customers only pay the forwarder's charges and warehouse storage charges.

PISFA will again meet with ACOP on June 17 to finalize the draft, which it will present to BOC and PSB for approval. Target MOA signing is July.

It is about time we act on this matter. Besides, only overseas agents benefit from the high rebates given by local forwarders. At the same time, we are affected by the high costs of imported goods. We seek the assistance of everyone in the industry to be vigilant and support our goals, as we will all benefit from this at the end of the day.

And, maybe the next time someone presents the LCL charges to the public, it will be easier to explain and justify these and promote the LCL business.

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PISFA at 20

ON July 22, 2004, 6pm, at the Ramon Magsaysay Center along Roxas Blvd. in Manila, the Philippine International Seafreight Forwarders Association, Inc. will celebrate its 20th anniversary.

Several activities have been conducted in the runup to July 22. Last July 16, we had a thanksgiving mass followed by the PISFA community service where PISFA member-companies donated cash, food items and used clothing. The project was a big success and we thank everyone for supporting this endeavor.

Also part of the association's celebration is the 20th Open Golf Tournament at the Manila Southwoods Golf and Country Club in Carmona Cavite. The tournament will be participated in by individuals from freight forwarding companies, shipping lines and related industry sectors. Ticket price is P3,000, including tournament fee, buffet lunch, giveaways, dinner buffet. Raffle prizes such as home theater systems, refrigerators, colored TV, and DVD will be given away.

We will be using a shot-gun system 36 format individual scoring.

Registration starts at 7am and tee-off time is at 8am.

Awarding ceremonies will coincide with the PISFA 20th anniversary celebration at the Ramon Magsaysay Center.

The celebration starts at 6:30 pm. Ticket prize for the dinner is P700.00. Special guest for the evening is actress Maui Taylor.

Dinner guests are enjoined to come in Hawaiian outfits.

Those interested in joining any of our events, may call the PISFA Secretariat office at tel. nos. 816-0446 or 887-3784.

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Association Activities

The Association has lined up several activities for the active participation of everyone in the industry.

Concluded Activities:

Republic Act 9280

Recently, we had a forum on Republic Act 9280 also known as "An Act Regulating the Practice of Customs Brokers Profession". We have been vocal with our objection to some provisions of the law, specifically Sections 6, 27 to 30. We are appealing to all member-companies and all industry players who will be affected by this law to work hand in hand with us in opposing this RA. Your active participation in the following committees is needed:

1.) Legal Matters/Research
2.) Finance/Fund Raising
3.) Public Relations/Media
4.) Government/Political Consultations
5.) Communication & Information Brigade

21st Basic Freight Forwarding Seminar

The Association also recently concluded the 21st Basic Freight Forwarding seminar (August 9-13, 2004, 4:00-8:00 PM at the Heritage Hotel, Roxas Blvd., Pasay City). The seminar was designed for individuals interested to upgrade their knowledge on the processes and procedures related to the freight business.

Next month, the association will conduct an Advance Freight Forwarding Course.

Upcoming Activities:

Fund Raising Concert

PISFA will co-produce a concert entitled "El Niño La Niña" featuring popular artists Nyoy Volante and Niña together with the Manos. The fund-raising concert will be on August 28, 2004, 9:00 pm at the Music Museum, in Greenhills, San Juan. The project chairwoman is Alice Mayo of ASL Logistics Worldwide, Inc. (formerly Target Airfreight Phils., Inc.).

Freight Forwarders Forum

On September 8, 2004, 1:30-5:00 PM, at the Casino Filipino, Parañaque City, PISFA members together with all other freight forwarders will conduct an open forum on the Philippine Shippers Bureau (PSB) proposed amendment to capitalization. We encourage everyone to participate and make known their stand on the matter.

For inquiries, you may call the PISFA Secretariat at tel. nos. (632) 816-0446, 887-3784, fax 894-1801, email pisfa@compass.com.ph, or visit www.pisfa.com.

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Looking Forward to October

THE Association is looking at a fruitful and fun-filled October. Our activities will not only focus on professional development but also relaxation and building camaraderie among professionals in the industry.

The following are the series of activities we have lined up.

• 12th PISFA Advance Freight Forwarding Seminar (October 11-15, 2004, 4:00-8:00 PM, Traders Hotel, Roxas Blvd., Pasay City)

This five-day training workshop module is composed of the following topics: Operational Aspects of Multimodal Transport, Logistics & Supply Chain Management, Management of MTO, International Conventions & Liabilities, Freight Logistics, Sales and Marketing, Warehousing and Distribution, Marketing and Sales and Case Study/ Workshop.

Registration Fee: P5,000 for PISFA members and P6,000 for non-PISFA Included are seminar materials/handouts, snacks and certificate of attendance.

Register early as slots are limited. Reservations will be on a first-come, first-served basis.

• 1st Shipping Lines-Freight Forwarders Convention (October 26, 2004, 1:00-6:00 PM, Heritage Hotel, Roxas Blvd., Pasay City)

The convention will inform everyone of the new rules, developments and updates on services of shipping lines, as well as shipping and logistics procedures and practices in different trading countries. Topics for discussion: Reefer, China, US (TSA), Japan, Europe, Out of Gauge Shipments, Tanktainers (Liquid Bulk), Heavylift, Dangerous Goods Cargo Requirements, Transhipment Ports (Hong Kong, Singapore and Taiwan), Asia and the Intra-Asia Trade Agreement.

Fees: P600, for PISFA members, P400

• PISFA & AFPI Successful Selling For Freight Forwarders (October 28-29, 2004, Skyfreight Training Room, Skyfreight Bldg., Parañaque City)

The seminar is an intensive two-day course designed and created specifically for freight forwarders, consolidators, NVOCCs and transport logistics companies. It aims to enhance the selling skills and persuasion techniques of corporate officers, department managers, sales executives and account officers, in order that they would be more productive in bringing new accounts as well as enhancing existing ones.

The program, using lectures, exercises, role plays and action planning, will focus on day-to-day experiences in the face-to-face selling environment of transport providers. At the end of the program, each of the participants will have a sales plan of action for a key sales target, and the skills and confidence to implement the plan.

Registration Fee: PISFA & AFPI Members, P3,000; non-Members, P3,500

• 8th PISFA Ten Pin Bowling Tournament (October 16 to December 4, 2004 (every Saturday), 1:00 PM, Pearl Bowling Center)

Everyone is enjoined to participate and form their respective teams to have fun with us as we start the tournament on October 16, 2004 at the Pearl Plaza Bowling Center. Players may register as early as 12:30 pm; the tournament roll-off starts at 1:30 pm. Each participating team will play for seven consecutive Saturdays and each team per game will composed of four players with at least one female bowler.

To determine the champion team, the 1st Runner-up, the 2nd Runner-up, 3rd Runner-up and 4th Runner - the highest number of points accumulated during the tournament will be computed. Aside from trophies and cash prizes, there will also be Individual Awards, Team Awards, Special Awards and special prize for the best team uniform.

Registration Fee: P10,000/team, minimum of five players and maximum of nine players (with at least one female bowler).

• 4th PISFA 9 Ball Billiards Tournament (October 16-30, 2004 (every Saturday), 1:00 PM, Pearl Bowling Center)

The 9 Ball Billiards Tournament will begin on October 16, 2004 and will be held every Saturday thereafter until October 30, 2004. Matches will start at 1:00 PM and the venue will be at the Pearl Bowling Center.

We will have a twice-to-beat format (winners and losers bracket as US 9 Ball Open) and we will follow the 9-Ball Standardized World Rules (1997). An expensive prize awaits the lucky players of the tournament.

Registration: P700 per player

For questions, call the PISFA Secretariat at tel. nos. 816-0446 or 887-3784 or email pisfa@compass.com.ph. For information, schedules and updates on PISFA, log on to www.pisfa.com.

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