Empty containers may soon have to be returned to depots outside Metro Manila as off-dock depots within the metro are fast filling up even before the peak season, according to an official of the Container Depot Alliance of the Philippines (CDAP).
Utilization of off-dock depots in Metro Manila is already at 90% of capacity, CDAP president Roger Lalu told PortCalls in an email. The average dwell time of empty containers has also doubled to 30 days from 15 days previously.
“Due to high utilization of container depots in Metro Manila and the slow-paced container evacuation of shipping lines, CDAP members who are all operating in Metro Manila may not be able to accommodate empty container return even before the peak season,” Lalu said.
“Sooner or later shipping lines will have no other option but to use depots outside Metro Manila,” he added.
Empty containers are part of a ship’s gear and shipping lines decide where empties should be returned to.
Lalu pointed to the country’s trade imbalance as the reason for the high utilization of Metro Manila off-dock depots. He cited the Association of International Shipping Lines (AISL) statement that there are three import containers for every one export container in the country. The situation has led to more containers in the Philippines awaiting repositioning to other countries.
AISL general manager Atty. Maximino Cruz earlier said the return of empty containers may eventually be done outside Metro Manila as space in off-dock depots in Manila and in the Camanava (Caloocan, Malabon, Navotas, Valenzuela) area has been decreasing with the closure or downsizing of some depots due to rising lease cost.
He said the problem will be exacerbated further by the country’s expected higher import volumes (annual increase of 6% to 7%) as well as the reluctance of local governments in Metro Manila to issue business permits to depot operators.
Lalu said off-dock depot space in Metro Manila has been declining “due to rising land rentals and other landlords are converting their vacant lots to a more profitable business.”
He also noted how cut-throat competition among container yard operators has resulted in lower rates.
CDAP data on its members’ total yard space in Metro Manila showed there isn’t enough space to accommodate around 20,000 twenty-foot equivalent units (TEUs) that need to be serviced.
“Unfortunately, most depot operators are adamant to invest in setting-up off-dock depot outside Metro Manila, fearing the same fate that they encountered during the onset of the 2014 port congestion wherein they ended up closing the business due to lack of support from shipping lines,” Lalu said.
He explained that at the height of the Manila port congestion in 2014, several CDAP members heeded the call of some government agencies and industry stakeholders to invest in depot facilities outside Metro Manila such as Batangas, Bulacan, Cavite, and Laguna to cater to demand for more space.
But when port operations normalized, those CDAP members “did not gain support” and “ended up closing their business and [being] left with financial debt,” he said.
Lalu said this time around, CDAP members are taking a wait-and-see attitude.
As the newly elected president of CDAP, Lalu said he will continue programs that will advance various initiatives to improve members’ services and profitability.
He noted that most members of CDAP have invested in technology innovation and safety of operations.
“I wish to continue and support those initiatives of our alliance and will continue to encourage the cooperation and support of our members to achieve the fruition of those initiatives that we have started,” Lalu said.
He added that CDAP will also work actively and “embrace new ideas and approaches of business activities to match our customers’ needs, even if it will require some changes in our organization.” – Roumina Pablo