Home » Breaking News, Ports/Terminals » Study: Coordinated approach needed to push Batangas, Subic ports

Manila-based consulting firm Transport and Traffic Planners Inc (TTPI) has advanced a number of policy measures that need to be taken by government and the private sector to encourage the use of Subic and Batangas as alternative ports to congested Manila.

At a recent forum, TTPI presented results of its Study to Decongest Manila and Divert Container Traffic to Subic and Batangas Ports commissioned by the Japan International Cooperation Agency.

Subic Bay is 110 kilometers north of Manila and Batangas 120 kms south of Manila.

The study proposes that agencies overseeing the development of seaports in Manila get their acts together and coordinate their development efforts, especially when it comes to investment programs.

Manila’s private port operators International Container Terminal Services, Inc and Asian Terminals, Inc (ATI) are building more facilities in anticipation of further growth in cargo traffic. If not reined in, the study said, those programmed investments would further exacerbate the daily traffic gridlock in Manila.

The study suggested a top-level coordinating body on port development must have a common direction and master plan for the country’s major seaports as well as a unified marketing offensive for Subic and Batangas ports.
The government must also entice shipping lines to field international cargo ships to the little-used ports with incentives, it said. The rates must be made cheaper and logistics companies, including freight forwarders and truckers, encouraged to put up shops in those ports.

To push shippers to use Batangas and Subic ports, the study noted stevedoring costs are lower in Batangas and Subic at P4,985 and P1,801 for a 40-footer, respectively, compared with P5,584 for the same load in Manila ports.

Arrastre charges at Batangas and Subic ports cost P5,773 and P2,870 for a 40-foot export container compared with P6,077 in Manila ports.
Storage costs are, however, more costly in Subic port with P224 for a 40-foot export container compared with P120 in Batangas and Manila ports. A 40-foot import container will cost P895 in Subic and P481 in Batangas and Manila ports.


Bleeding operations

With only two international shipping lines calling port once a week each at Subic Bay Freeport, private port operator Subic Bay International Terminal Corp (SBITC) is bleeding.
At least four ship calls a week is needed for Subic ports’ operations to become viable, according to an SBITC executive.

The private operator of Batangas Port, ATI, is worse off with only one weekly call operated by one shipping line.

SBITC and ATI pay fixed fees to the government that owns those ports.

At the same time, the Port of Manila is brimming with business despite congestion in both the port area and roads leading to it. Manila terminal operators are set to sink in more investments to accommodate the growing container traffic.

TTPI said a 2010 study showed container throughput reached almost 500,000 TEUs at the Manila South Harbor and nearly 1.2 million TEUs at the Manila International Container Terminal (MICT).

In the same year, cargo volume hit nearly 6.2 million metric tons in Manila South Harbor and almost 17 million MT in MICT.
By contrast, container traffic at Batangas and Subic ports respectively reached only 622 TEUs and 25,000 TEUs and cargo throughout nearly 9,000 MT and 400,000 MT.


Market forces

Stakeholders who participated in the same forum said users should be allowed to decide on which port to use. Diverting container traffic to Batangas and Subic Ports to decongest Manila and maximize the two ports should not be forced on business.
By saying this, stakeholders have weakened earlier claims made by the Export Development Council and the Philippine Export Zone Authority that one way to unclog traffic jams in Metro Manila is to divert cargo trucks to Batangas and Subic.
Federation of Philippine Industries president George Chua also said market forces should be allowed to decide on this issue, noting businesses are always looking for the cheapest and efficient logistics service to be internationally competitive.

“Let us be globally competitive, but we should not force business moves,” he stressed.

Roberto Aquino, Philippine Ports Authority acting manager for Port Operations, said his office has already submitted a proposal for a one-year 50% tariff discount for Batangas and Subic ports to the Office of the President.

He shares the opinion that the market should decide on which strategy will work best for them.

Incentives and discounts in wharfage fees and tariff rates are already available at the Subic port, pointed out Captain Perfecto Pascual, manager of the Subic Bay Metropolitan Authority seaport department, and yet, shipping lines are not coming.

“If these (incentives and discounts) do not work, we do not know what else to do,” he said.

Photo courtesy of Subic Bay Metropolitan Authority

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