Cold Chain Association of the Philippines (CCAP) president Anthony Dizon, in a recent email to PortCalls, said a combination of factors is behind the buildup of inventories in cold chain facilities.
“Most warehouses today are operating close to full capacity mainly as a confluence of past and present events, particularly ASF [African Swine Fever], which has caused some market areas in the Visayas and Mindanao to refuse shipments of pork products from Luzon, and more recently, the ECQ situation which has forced businesses like the HORECA [hotel, restaurant, catering] accounts to shut down, thereby creating a market slowdown,” Dizon explained.
Moreover, the agribusiness production sectors continue to operate “because they cannot abort their grow-out cycles.”
Pressure on capacity
Dizon said utilization faces even greater pressure once the approximately 800 reefer containers at Manila ports are released and end up in cold chain facilities, Dizon added.
On March 27 port operator International Container Terminal Services, Inc. said that for the period March 1 to March 26, cleared containers sitting at Manila International Container Terminal added up to 8,201, of which over 850 twenty-foot equivalent units (TEU) were refrigerated containers. There were also 21,387 TEUs, over 1,400 TEUs of which were reefers, waiting for clearance and release after being discharged since March 1.
The Bureau of Customs on April 16 said 914 overstaying and abandoned containers at MICT had already been transferred to the depot of Pacific Roadlink Logistics, Inc., 2,287 containers to the Manila North Harbor domestic terminal, and 106 containers to the Laguna Gateway Inland Container Terminal. (The bureau did not say how many of the containers are reefers.)
The transfer of overstaying containers was facilitated by a joint administrative order (JAO) signed by several government agencies. The JAO contained rules that seek to expedite release of refrigerated containers and dry cargoes from Manila ports during the ECQ.
Another concern post-lockdown for CCAP, according to Dizon, is “if business resumption is implemented in one swoop, (which) may lead to a chaotic situation for logistics operators.”
He said this concern presumes the HORECA accounts have disposed of their food inventories during the lockdown and will therefore need to replenish.
“We also need to consider that the market of the QSR’s [quick service restaurants] could also consist of the C, D and E economic sectors which have gone through severe economic difficulties and may need time to recover before they can afford to eat out again,” Dizon said.
“We foresee the need for a calibrated reopening of businesses as well as the traffic of people to enable us to manage the post-lockdown scenario,” he noted.
For now Dizon said he has yet to receive information on operation disruption from CCAP members.
He said CCAP is working closely with the Inter-agency Taskforce on the Management of Emerging Infectious Diseases through the Department of Trade and Industry “to enable our members to continue operations and make deliveries to the distribution network to ensure continuing availability of food products.” – Roumina Pablo