Home » Maritime » PSB backs overseas shipping operators on FOB promotion

THE Philippine Shippers Bureau (PSB)is supporting overseas shipping operators' drive to encourage Philippine government agencies to use local carriers in their imports.

PSB deputy director Rene Cruzada told PortCalls that even before this campaign of the Filipino Shipowners Association (FSA) and the Maritime Industry Authority (MARINA) started, PSB has already been pushing for the practice.

"We have been urging various agencies to shift to Free-On-Board (FOB) from Cost-and Freight (C&F) when importing their cargoes. That way, they will have control over the contract of carriage," he pointed out, adding local carriers will be given chance to participate.

Cruzada explained the problem lies with the dearth of Philippine vessels carrying government imports. "Most local carriers are deployed somewhere else – and this is usually not where most of our imports come from," he noted.

This, he explained, is a result of uncompetitive freight costs in certain trade areas, particularly Vietnam and Bangkok, where majority of the country's rice and coal imports come from.

"Philippine-flagged vessels are, most of the time, empty on their way to these areas. They will only be loaded upon coming back so the profit is just one way. It is not really viable," he said.

He noted the only way to make freight viable is to secure at least a year's contract [through the FOB] so that overseas carriers can program the movement of their vessels and secure carriage of these cargoes.

Cruzada said the PSB has had dialogues with agencies such as the National Power Corporation and the National Food Authority regarding the matter.

Earlier, FSA president Carlos C. Salinas proposed that importing government agencies should bid on an FOB basis rather than C&F.

FSA stressed carriage of government cargo will result in foreign exchange savings as freight payments will now be made to Philippine overseas shipping companies.

Meanwhile, the Department of Transportation and Communications said the desire of shipowners to participate in the carriage of government cargo will help boost the department's efforts to help modernize the Philippine overseas merchant fleet and stimulate private sector investment in the overseas shipping industry.

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