ARTA clears PPA container monitoring system

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  • The Anti-Red Tape Authority cleared the Philippine Ports Authority policy on the registration and monitoring of containers along with its implementing operating guidelines
  • ARTA described the PPA regulatory impact statement on the TOP-CRMS as “good practice”, giving the RIS a rating of 36- “Good Practice RIS”
  • PPA said it will continue to fine-tune the program amid opposition from some sectors

The Anti-Red Tape Authority (ARTA) has approved the Philippine Ports Authority (PPA) policy on the registration and monitoring of containers along with its implementing operating guidelines (IOG), PPA said in a statement.

The policy, contained in Administrative Order (AO) No. 04-2021, prescribes the implementation of the Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS).

ARTA described the PPA regulatory impact statement (RIS) on the TOP-CRMS as “good practice”, giving the RIS a rating of 36- “Good Practice RIS”. PPA submitted the TOP-CRM RIS to ARTA on February 2, 2023.

“This is a welcome development, considering the concerns raised about the program, but the green light of ARTA means TOP-CRMS is the best option to solve the current problems,” PPA general manager Jay Santiago said.

“TOP-CRMS seeks to remove the payment of container deposits and to efficiently manage the return of empty containers. In fact, there have been a series of public consultations and we have adjusted based on the need of the stakeholders,” he added.

According to PPA, TOP-CRMS aims to lower logistics cost by replacing the container deposit amounting from P10,000 to P30,000 collected by shipping lines with a P250 container deposit insurance and P730 container monitoring fee.

TOP-CRMS will also bring down empty container handling costs as it will reduce the existing charge from P6,400 to P3,520, PPA added.

Santiago said “PPA will continue to fine-tune the program and the implementation of PPA AO No. 04-2021 and its IOG will be constantly monitored and the necessary adjustments to the IOG will be done as necessary.”

The PPA Board initially deferred implementation of the program following much opposition among stakeholders in the shipping and allied industries.

Some are saying TOP-CRMS will only replicate functions of certain agencies and jack up business costs while others claim it will solve the perennial problem of late return of container deposits.

RELATED READ: Scrap PPA container monitoring system, 17 business groups urge Marcos

Good practice

“PPA has provided concise and satisfactory evidence on all RIA sections. Hence, the RIS was assessed as Good Practice,” ARTA said. (RIA is regulatory impact assessment.)

According to PPA, “This means the ARTA acknowledged the problem on container deposits and empty container returns and recognized that the PPA through TOP-CRMS is providing the solution to the long time problems of the port users and truckers.”

Under the existing system, PPA noted there is “little or no government regulation” on the
export of empty containers managed by shipping lines.

“Empty containers stored at the port terminals are occupying valuable space at the operational area, adversely contributing to port congestion which negatively impacts the quay crane production rate at the ports.

“In 2022, empty containers accounted for more than 20% of yard utilization at the port terminals with an average dwell time of almost triple of the allowed 72 hours,” PPA said.

The port agency said ARTA “also concluded there is a lack of regulation to address the current issue which is also the main cause of the problem.”

The TOP-CRMS “also meets ARTA’s criteria for cost-saving mechanisms including the fee on container deposits, port access roads, and has reduced the dwell time of empty container returns to less than 72 hours,” PPA noted.

The agency pointed out the agency has the duty to supervise, control, regulate, construct, maintain, operate and provide facilities or services belonging to the Authority, Section 6 of Presidential Decree No. 857.

In keeping with such mandate, PPA said “TOP-CRMS will provide efficient port services to the public.”

Cost-benefit analysis

Based on a PPA 10-year cost-benefit analysis on the net cost of implementing TOP-CRMS, the policy will have a net cost of P470,726,367,724, compared with the P472,038,745,198 net cost of implementing the Container Ledger Account (CLA), a program supported by the Association of International Shipping Lines.

CLA is an online system that aims to simplify and speed up container deposit refund.

RELATED READ: DTI, DOTr push Container Ledger Account use to carriers

TOP-CRMS is also more economical than the 10-year net cost of implementing the Bureau of Customs’ Electronic Tracking of Containerized Cargo (e-TRACC) System (P471,889,180,692), according to PPA.

And if shipping lines were to stop imposing the container deposit, “it will only have a net cost of negative P200,803,512,082” over 10 years, the port authority said.

Assuming the status quo, the 10-year implementation net cost will still be P470,019,624,356, the agency added.

It said TOP-CRMS will ensure empty containers will be returned without delays; it will also scrap existing fees associated with the return of every inbound foreign-owned container, such as Pre- Advise (P1,500); Documentation fee (P1,200); lift-on and lift-off each costing P1,100; and three days’ storage (P1,500).

In addition, it will stop collection of other surcharges such as Shipping Line Detention fee (paid daily by truckers), P4,000; and Trucker Detention Fee (charged to the importer), P15,000.

If TOP-CRMS is not implemented, such charges will remain even under the policies of the current system, such as CLA and e-TRACC.

And even if shipping lines were to remove the container deposit, other surcharges will continue, PPA said.