Study: Cap capacity at Manila ports to disperse cargo traffic to Subic, Batangas

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The study is pushing as well for a government statement compelling cargoes bound for or coming from the south of Manila to call at Batangas Port and those bound for or coming from the north of Manila to call at Subic Port.
The study is pushing as well for a government statement compelling cargoes bound for or coming from the south of Manila to call at Batangas Port and those bound for or coming from the north of Manila to call at Subic Port.
The study is pushing as well for a government statement compelling cargoes bound for or coming from the south of Manila to call at Batangas Port (in photo) and those bound for or coming from the north of Manila to call at Subic Port. Photo courtesy of Asian Terminals Inc.

A new study published by a Philippine government think tank believes that limiting future expansion plans at Manila ports and directing shippers to increase usage of the outlying ports of Batangas and Subic can resolve the “inevitable” congestion that hounds the Greater Capital Region (GCR).

In a Philippine Institute for Development Studies (PIDS) study entitled “Easing Port Congestion and Other Transport and Logistics Issues”, researchers led by Epictetus Patalinghug and Dr Gilberto Llanto, the latter the PIDS president, put forward short-, medium-, and long-term action plans aimed at easing clogging at the Port of Manila and further utilizing Batangas and Subic ports.

The study noted that Batangas Port, constructed in December 2007 to support trade between the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) region and the rest of the country, and Subic Port, which was developed to promote growth in the Subic Bay Freeport Zone and Central Luzon region, remain underutilized today.

“In contrast, the Port of Manila is continuously expanding, with the completion of Berth 6 in 2012,” the study said. Manila International Container Terminal’s (MICT) port operator International Container Terminal Services, Inc. (ICTSI) has plans to further expand capacity by building more berths, while Manila South Harbor’s port operator Asian Terminals Inc. (ATI) has an ongoing yard expansion.

The report said it hopes its recommendations can lead to the formulation of a national multimodal transport and logistics development plan that addresses the concerns of the country’s logistics industry, recognized internationally as one of the possible growth markets for logistics service providers.

Short-term measures

The study team noted “congestion in the ports in Manila is inevitable because Metro Manila’s economy, port traffic, and population grew faster than infrastructure spending on new roads that connect the ports to adjacent provinces that host industrial and commercial estates.

“The policy of putting a cap on the capacity of the ports in Manila is therefore recommended.”

It also recommends making a policy pronouncement to limit Manila Port’s capacity to Berth 6 at MICT and deter port expansion at South Harbor. (It must be noted though that ICTSI has already opened Berth 7, the development of which added 500,000 twenty-foot equivalent units of yard capacity to MICT.)

READ: MICT expands capacity with 4 hectares at Berth 7

READ: Expanded yard at the MICT by yearend

The study is pushing as well for a government statement compelling cargoes bound for or coming from the south of Manila to call at Batangas Port and those bound for or coming from the north of Manila to call at Subic Port.

Given that infrastructure facilities (both the rail and the inland container depot in Calamba, Laguna) are available, the study group further suggests that ICTSI immediately revive the night-time transport of freight via rail.

“Because [the rail] will operate at night, this will not affect the commuter line of PNR [Philippine National Railways. Freight transport by rail should commence after the last commuter train has ended its operation and should end before the start of the first commuter train in the morning,” the study pointed out.

Another short-term recommendation is installing a web-based 24-hour integrated truck dispatching, appointment, and booking system designed to improve the logistics chain, taking off from the Terminal Appointment Booking System at MICT and Manila South Harbor. The TABS scheme has been in effect since October 2015.

READ: All systems go for Manila ports’ online terminal booking facility

Medium-term proposals

And to shift about one million twenty-foot equivalent units from the ports in Manila to Batangas and Subic Ports, a medium-term measure proposed is increasing available personnel and expanding cargo handling, equipment, berth, and container yard capacity at Batangas Port.

PIDS also endorses a rationalization plan to guide future port development and investment programs for the ports in the Greater Capital Region. This includes putting restrictions on future expansion at the ports in Manila, and undertaking capacity expansion plans for the Batangas and Subic Ports ahead of demand.

Another suggested move is to identify future port relocation sites by creating a land identification and acquisition subcommittee under the National Economic and Development Authority’s Committee on Infrastructure. The subcommittee will identify and inventory potential port relocation or expansion sites, as well as provide information on the owners, claimants, and other parties-in-interests involved in these sites.

Enhancing logistics-, port- and customs-related services and processes around Batangas and Subic ports is likewise suggested, which requires facilitating the growth of freight forwarders, consolidators, brokers, truckers, and other logistics services providers.

Empty, unclaimed, and abandoned containers, which were cited as contributors to congestion, need to be transferred to an inland container deport (ICD) or container yard. PIDS said that preferably, the new site should be located along the railroad of PNR so that its trains can be used to move these containers to the ICD at night.

A gradual rehabilitation and improvement of the PNR system (including rail track, signaling system, rail crossings, and stations), including the removal of the remaining illegal settlers along the railroad tracks’ right-of-way, and most especially along the segments where rail freight will be introduced, is being broached.

At the same time, it is important to compel international shipping lines handling high-volumes of shipments to establish their own ICDs “in order not to congest the ports, especially with empty containers.”

Long-term plans

For the long term, the research team recommends drafting a multimodal transport and logistics development plan covering the Manila-to-Mindanao corridor, with emphasis on the Manila-Sorsogon-Leyte-Surigao segment. Currently, DTI’s Supply Chain and Logistics Management Division is now crafting a National Logistics Master Plan to be presented to the public next year.

A public-private partnership plan for the PNR system is also worth considering in case the government cannot allocate funds for improving the PNR system.

“It is just unfortunate that the North Rail Project was rescinded by the Aquino administration due to anomalies in the contract. Perhaps, a PPP partnership with the private sector could speed up the upgrade that the PNR system needs,” PIDS noted.

The study team also advocates conducting a more thorough study regarding goods and passenger movements in the GCR and the possibility of having these two movements interacted and integrated.

“In return, transport infrastructures (water, rail, road) could be properly planned and integrated, which would not only address the needs of the people but also that of the freight industry,” the study said.

PIDS’ latest study largely echoes proposals outlined in its 2015 study entitled “A System-wide Study of the Logistics Industry in the Greater Capital Region,” which was released after the 2014 Manila port congestion that negatively impacted the supply chain.  —Roumina Pablo