ATI, ICTSI seek double-digit cargo-handling tariff hikes

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ATI, ICTSI seek double-digit cargo-handling tariff hikes
Manila South Harbor operated by Asian Terminals Inc. Image by PortCalls from Pixabay
  • Asian Terminals Inc. and International Container Terminal Services, Inc. are seeking a double-digit increase in cargo-handling tariff for their respective terminals in Manila
  • ICTSI is asking for a 17% hike in cargo-handling tariff, excluding transshipment, for Manila International Container Terminal
  • ATI is proposing a 16.55% upward adjustment in the cargo-handling tariff and other related and miscellaneous charges for Manila South Harbor
  • The terminal operators said their petitions would have a less than 1% impact on the cost of basic goods and commodities

Asian Terminals Inc. (ATI) and International Container Terminal Services, Inc. (ICTSI) are seeking a double-digit increase in cargo-handling tariff for their respective Manila terminals.

ICTSI is asking for a 17% hike in cargo- handling tariff, excluding transshipment, for Manila International Container Terminal (MICT).

On the other hand, ATI is proposing a 16.55% upward adjustment in the cargo-handling tariff and other related and miscellaneous charges for Manila South Harbor.

No stakeholder raised questions during the April 19 virtual public hearing on the petitions but some said they will submit positions paper. Stakeholders have five working days from the conduct of the public hearing or until April 26 to submit their position papers for consideration in the technical working group’s evaluation of the petitions.

The petitions are pursuant to PPA Administrative Order (AO) No. 02-2018, which prescribes the ports authority’s standard and uniform formula and procedures for cargo-handling tariff adjustment, and PPA AO 11-2019 or the new omnibus rules of procedure on private service provider-initiated applications for new tariff and adjustment of fees and charges in ports.

Under AO 02-2018, which took effect in March 2018, the cargo-handling/terminal operator may apply for a cargo-handling tariff adjustment if the consumer price index (CPI) has increased by at least 5% within a three-year period.

CPI, computed and provided by the Philippine Statistics Authority, is a statistical measure of the average retail pricing of goods and services commonly purchased by a particular group of people in a particular area.

Both ATI and ICTSI said CPI had increased by at least 5% since the effectivity of the last tariff increase.

The last cargo-handling tariff rate adjustment for the two ports was in 2021, when PPA granted a 10% rate increase implemented in two tranches—2% in 2021 and 8% in 2022.

Both terminal operators also said they are eligible for tariff adjustment after having complied with requirements of AO 02-2018. They also cited investments they made from 2020 to 2023 as well as ongoing and future projects for the next three years.

ATI vice president for business development Adrian Edward Baking said they invested P2.99 billion on infrastructure, equipment, and other projects in Manila South Harbor from 2021 to 2023.

For 2024 to 2026, the planned capital investments are estimated to be P2.230 billion, of which P1.553 billion will be on equipment and P649 million on infrastructure.

For MICT, management, sustainability and government affairs director Voltaire Wycoco said that for the last 10 years, or from 2014 to 2023, ICTSI has invested P20.912 billion in MICT, and forecasts P15.372 billion additional investments for the next three years.

For Manila South Harbor, the proposal includes the following:

Stevedoring (containerized)

  • 20-foot laden – $135.20 from the current $116
  • 20-foot empty — $113.65 from the current $97.51
  • 40-foot laden — $189.13 from the current $162.27
  • 40-foot empty — $146.41 from the current $125.62

Arrastre (containerized)

  • 20-footer import – P5,522.14 from the current P4,738
  • 20-footer export – P4,508.15 from the current P3,868
  • 40-footer import – P12,667.82 from the current P10,869
  • 40-footer export – P10,354.30 from the current P8,884

Stevedoring (non-containerized)

  • General cargo non-palletized – P265.73 from the current P228
  • General cargo palletized – P103.73 per revenue ton (RT) from the current P89 per RT

Arrastre (non-containerized)

  • General cargo non-palletized – P391.61 from the current P336
  • General cargo palletized – P173.66 from the current P149

Miscellaneous charge

  • Truck weighing – P160.84 from the current P138 per truck

For MICT, proposed rates include the following:

Vessel tariff rates

  • 20-footer laden — $135.724 from the current $116.003
  • 20-footer empty — $114.088 from the current $97.511
  • 40-footer laden — $190.347 from the current $162.690
  • 40-footer empty — $146.979 from the current $125.623

Cargo rates

  • 20-footer laden – P5,543.46 from the current P4,738
  • 20-footer empty – P4,525.56 from the current P3,869
  • 40-footer laden — P12,716.73 from the current P10,869
  • 40-footer empty – P10,394.28 from the current P8,884

Both terminal operators said that based on their calculations, their petitions would have a minimal impact (less than 1% increase) on the cost of basic goods and commodities.

For example, based on ATI’s computation, tariff adjustment for a 20-footer will only have a 0.15% upward impact per kilogram (kg) on the retail price of rice, 0.11% per kg of sugar, and 0.21% per 25 kg bag of flour.

Based on ICTSI’s computation, the tariff increase will have a 0.1% impact per kg on the import value of roasted coffee from Malaysia, 0.2% per kg for cooking oil from Indonesia, 0.1% per kg on frozen beef from Canada.

Wycoco said ICTSI also looked at the impact of the tariff adjustment on the cost of logistics. He noted that terminal charges make up roughly 8% to 10% of total logistics costs depending on the origin and commodity, based on a study by independent consultant Blue Focus commissioned by an international manufacturing group.

He said ICTSI’s proposed 17% adjustment in tariff “will not increase the share terminal charges significantly”, remaining in the 8% to 10% range.

Moreover, Wycoco noted that from 2020 to 2023, several economic indicators have trended upward, including CPI (by 17%), foreign exchange rate (by 12%), and minimum wage (by 14%). Prices of fuel and power, which the terminal’s operations rely heavily on, also saw increases of 89.5% and 57%, respectively, over the last three years.

Stakeholders have five working days from the conduct of the public hearing or until April 26 to submit their position papers for consideration in the technical working group’s evaluation of the petitions. – Roumina Pablo