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ID-100197850A draft memorandum order adjusting off-dock container yard/container freight station (CY/CFS) rates in the Philippines has been released by the office of the Bureau of Customs Assessment and Operations Coordinating Group (AOCG).

The draft was released on Jan 17, a day after AOCG deputy commissioner Atty Agaton Uvero attended a public forum organized by PortCalls in partnership with various industry organizations. Almost 200 forwarders, cargo consolidators, customs brokers, importers, and CY/CFS operators attended the half-day meeting meant to address confusion over warehouse charges.

Download draft from http://www.scribd.com/doc/200719651/CMO-24-2001-Amendment-15jan14

Apart from Uvero forum panelists included officials from the Association of Off-Dock Container Yard Operators of the Philippines (ACOP), Association of SEIPI (Semiconductor and Electronics Industries in the Philippines) Logistics Managers, Chamber of Customs Brokers Inc, Philippine International Seafreight Forwarders Association (PISFA), and Portusers Confederation.

At the forum Uvero said he will await industry feedback on the draft memo before making a decision on rates, which he will then endorse for Customs Commissioner John Phillip Sevilla’s signature. Uvero admitted it would be hard to gain consensus among all industry players, but hoped for a decision acceptable to many.

There have been complaints on rates charged by offdock CY/CFS operators, a situation partly arising from an ACOP resolution which prescribed interim rates, pending the release of a BOC memo that would update a 2001 Customs memorandum order, CMO 24-2001. The interim rates are higher than those under CMO 24-2001.

ACOP president Alex Ong explained that their interim rates, formulated last November, were drawn up to standardize charges among members. He said the adjusted rates — for voluntary action by its individual members — factored in higher costs from the time CMO 24-2001 was promulgated 13 years ago.

Ong pointed out that as it is, prevailing industry charges are way higher than those prescribed under CMO 24-2001. ACOP rates, on the other hand, are somewhere in between.

Uvero noted that until there are new offdock CY/CFS rates, the CMO 24-2001 charges apply. He said warehouse operators charging otherwise run the risk of being the subject of complaints, some of which have already reached BOC mother agency, the Department of Finance.

Offdock CY/CFS rates have been an issue of contention for some time. There have been complaints of sky high warehouse rates which some industry insiders traced to so-called rebates. These “rebates” are said to either be offered by warehouses to forwarders or requested by forwarders in exchange for exclusive business. Such alleged arrangements, industry players say, have resulted in the destruction of the BOC rate structure.

With warehouse operators facing much-reduced collections (interim ACOP rates being lower than prevailing industry charges), Ong surmised some rebate arrangements could have been stopped.

But this seems to have given rise to yet another problem: some forwarders reportedly jacking up local charges to make up for the “lost” rebates.

The Philippine Shippers’ Bureau (PSB), which regulates freight forwarders and should oversee local charges by forwarders, was invited to the forum but officials said they had previous engagements.

Uvero said while BOC had no jurisdiction over freight forwarders, the bureau still has a stake in ensuring overall logistics costs are reasonable. In the case of overcharging forwarders, he said he can elevate the issue to the National Competitiveness Council (NCC). Uvero as AOCG deputy commissioner has been designated public sector champion of the Customs/National Single Window, a working group under NCC.

According to its website, the NCC is a public-private task force set up by the Aquino administration to address the improvement of the country’s competitiveness. The council is chaired by Trade and Industry Secretary Gregory Domingo for the public sector.

Forwarding industry regulator PSB is a Department of Trade and Industry (DTI) agency.

PortCalls sources said Uvero’s warning is a roundabout way of solving overcharging by forwarders, but it is a solution nonetheless in a situation where there seems to be no immediate relief forthcoming.

While PSB should in principle regulate the entire freight forwarding industry, its current focus is on balikbayan (personal effects) boxes, ensuring that overseas Filipino workers do not get duped by fly-by-night forwarders. PSB is also in the midst of a transformation. PortCalls sources said the bureau will very soon be downgraded to a division called Supply Chain and Logistics Division, under the Competitiveness bureau of the DTI. The new division will reportedly have the same functions as the old PSB, mainly accrediting and renewing licenses of forwarders.

Finally, even if forwarding association PISFA can police its ranks, it only has jurisdiction over its more than 100 members; it has no say over the 300 or so other accredited forwarders by the PSB that are not PISFA members.

There have been similar earlier attempts to strictly implement the customs order on offdock CY/CFS rates. Former Manila International Container Terminal district collector Ricardo Belmonte issued a memorandum on Jan. 31, 2013 directing Romulo Pagulayan, chief of the Piers and Inspection Division, to ensure that the provisions of CMO 24-2001 were followed. Nothing came of the order.

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