A shortage of last-mile trucks—trucks for hire delivering goods from distribution centers to end users like supermarkets and other retail outlets—looms, bringing with it more port congestion and even higher prices of consumer goods.
This developed after some last-mile trucks’ provisional authority (PA) to operate issued by the Land Transportation Franchising and Regulatory Board (LTFRB) expired on October 17. As of Friday, an LTFRB spokesman said the application period will not be extended since the agency had given truck operators ample time to comply with franchise requirements.
Last-mile truck operators whose PAs have expired would have to wait until they get their authority to operate, LTFRB said.
PortCalls has received reports last week that some last-mile trucks have already been apprehended. If the situation escalates, sources fear that the supply chain will once more face constriction, with consumer goods unable to reach their final destination at a period when consumer spending is at its highest with the Christmas holidays just a few months away.
As it is, port congestion at Manila ports, caused by the Manila daytime truck ban, has not been completely addressed. While the Manila truck ban has been indefinitely lifted in September, the policy still has residual effects: yard utilization of Manila International Container Terminal and Manila South Harbour is at more than the ideal rate of 80%; and the return of empty containers continues to be a problem due to a shortage of space in off-dock container yards.
Norman Adriano, secretary general of the Supply Chain Management Association of the Philippines (SCMAP), told PortCalls in a text message that while he has not yet received reports of problems with last-mile trucks, “once the apprehensions start, these trucks will stop delivering goods and there will be a widespread increase in commodity prices.”
Adriano said they have already foreseen the problem arising “because there are a lot of green-plated for-hire trucks.”
“There won’t be enough trucks to do last-mile delivery, therefore (it will cause a) shortage of goods and probable higher prices of goods,” Adriano noted.
Under Board Resolution No. 06-2014 dated October 17, LTFRB as directed by the Cabinet Cluster on Port Congestion extended until January 31, 2015 the application period to secure a franchise and provisional authority by trucks for hire with port-related services in anticipation of the surge in imports during the holiday season.
The extension of the application period did not extend to last-mile trucks.
Adriano said SCMAP has already appealed to Senator Paolo Benigno “Bam” Aquino IV on the matter, and in several interviews “cautioned government on the expected result of LTFRB’s refusal to extend (the) PAs of the last-mile trucks.” Aquino is chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, which has conducted several hearings on the port congestion.
Adriano noted that last-mile trucks don’t have groups like the Confederation of Truckers Association of the Philippines (CTAP) to lobby for the extension of their PAs, which is probably why the potential problem has not been given much play.
Truck apprehensions
In a related development, there were also reports of trucks being apprehended recently for lack of a permit to operate (PTO) from the Philippine Ports Authority (PPA) even if they already have PAs from the LTFRB.
The PTO is an annually renewed clearance issued by PPA to trucks servicing ports.
CTAP director Alberto Suansing told PortCalls in a phone interview that when LTFRB started issuing PAs in June, it did not distinguish between trucks servicing ports, last-mile trucks, and those servicing other sectors.
Since the extended validity of PAs is only for trucks with port-related services and the PAs of non-port related trucks have expired on October 17, Suansing said the PTO was required to verify whether a truck really services the port or not.
New truck franchises issued
LTFRB chairman Atty. Winston Ginez in a text message to PortCalls said the agency has already issued “a total of 25,000 new trucks franchises plus 15,000 trucks were already franchised prior to the implementation of JAO 2014-01.”
Joint Administrative Order (JAO) No. 2014-01 issued on June 2 increased the penalty for illegally operating (colorum) vehicles, or public vehicles without a franchise. To help decongest Manila ports, LTFRB issued a moratorium until August on apprehension of trucks and issued PAs so as not to hamper the delivery of goods.
“If there are other trucks that did not apply when we were issuing PAs, they can still file their application for franchise and we will hear and process them accordingly,” Ginez said.
LTFRB executive assistant III Arnel Del Rio told PortCalls that issuance of PAs to trucks that do not service ports will no longer be extended.
He added though that LTFRB, on average, now processes applications within 45 days. – Roumina Pablo
Image courtesy of hywards at FreeDigitalPhotos.net
