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AISL offers system for faster container deposit refund

  • The Association of International Shipping Lines is proposing an online system that would potentially solve the long-standing issue of return of container deposits
  • Container Ledger Account promises to speed up container deposit refund in the Philippines to as fast as three days
  • The system is developed by Malaysia-based D&D Control and is already in use in Malaysia
  • Through CLA, users can choose to post a deposit or a security amount depending on the container volumes handled
  • The target date for system implementation is December 1, 2021, initially for Manila ports

The Association of International Shipping Lines (AISL) has tapped Malaysian-based D&D Control (M) Sdn Bhd to offer a solution to the long-standing issue of the return of container deposits.

AISL is proposing the use of D&D’s Container Ledger Account (CLA), an online system that aims to simplify and speed up container deposit refund to as fast as three days.

In a virtual introduction of CLA to some industry groups on October 26, AISL president Patrick Ronas acknowledged some shipping lines’ difficulty in returning container deposits, especially during the pandemic. He said the association has always looked for possible solutions, which it has now found in CLA.

CLA has been in place since 2018 in Malaysia, which like the Philippines, also
encountered problems with the return of container deposits. The system is now being adopted by 44 shipping lines and almost 2,000 consignees and customs brokers in 14 ports in Malaysia. Several shipping lines and shipping agents that use CLA also operate in the Philippines.

Soon CLA will also be rolled out in Indonesia.

D&D holds a patent to CLA in Malaysia and recently applied for a patent in the Philippines.

D&D president and chief executive officer Mahendrarajah Selvaraja (Mahen), in a presentation during the virtual meeting, said CLA will eliminate shippers’ administrative burden of preparing various documents to claim container deposits from shipping lines.

The system can also improve users’ cash flow since they will only need to deal with one party, doing away with the need to post a container deposit for every shipping line they transact with. Through CLA, users can provide the container deposit or a security amount for all containers regardless of the shipping line.

To use the CLA, importers, freight forwarders, and customs brokers may register on the CLA platform and choose between two options: deposit ledger and cash ledger.

With the deposit ledger, users will deposit an amount depending on their twenty-foot equivalent unit (TEU) volumes and this amount will be refunded though the CLA upon request.

Once the empty container is returned to the depot, the stakeholder can already request for a refund through CLA, which will immediately inform the shipping line to release the deposit, which will then be refunded to the stakeholder also through CLA.

For the cash ledger, the user will no longer be required to post a container deposit but will have to provide a security amount depending on the user’s monthly TEU volumes:

  • Below 10 TEUs – P75,000
  • 11-50 TEUs – P150,000
  • 51-100 TEUs – P250,000
  • More than 100 TEUs – P350,000

Another option being implemented in Malaysia which may also be applied in the Philippines is the CLA Credit, available for VIPs of shipping lines and users with high container volumes.

Mahen said they are open to the idea of industry associations providing a guarantee for its individual members so each member won’t need to provide a deposit or security.

The proposed fees for the use of CLA are P200 per TEU if the user opts for deposit ledger and P100 per TEU for the cash ledger.

As to how the impending implementation of Philippine Ports Authority’s container registry and monitoring system might impact the implementation of CLA, AISL general manager Atty. Maximino Cruz reiterated the association’s opposition to the PPA-proposed system, claiming it is redundant and duplicates some systems of the Bureau of Customs.

READ: AISL: PPA container registration system encroaches on BOC mandate

PPA recently issued Administrative Order (AO) No. 04-2021, which provides the policy on the registration and monitoring of containers entering and leaving PPA ports, and which will replace container deposits with a container insurance policy.

CLA target implementation is on December 1, 2021, initially for Manila ports. Mahen said that in the beginning it might take shipping lines more than 10 days to approve the release of container deposit but this will eventually be reduced to seven to 10 days over time.

Asked if AISL members have already shown interest to implement CLA, Ronas told PortCalls some have, while others have referred the matter to their principals.

AISL and D&D will present the system in the coming days to members of industry organizations present during the Oct 26 meeting.

The return of container deposits is a long-standing industry issue, with some shippers claiming it takes some carriers years to refund the deposit. The government tried to address the issue earlier through a proposed joint administrative order on local charges imposed by international shipping lines; the order never got off the ground. Two bills are currently filed in the Lower House aiming to regulate charges of international shipping lines, including container deposits. – Roumina Pablo

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