Container monitoring system deferred indefinitely

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Container monitoring system delayed indefinitely
Image by Freddy from Pixabay
  • The Philippine Ports Authority’s Board of Directors has deferred indefinitely implementation of the container registry and monitoring system for foreign containers amid calls from stakeholder groups to scrap the program
  • Still, PPA chief Jay Santiago said the program will continue to be improved so it can be immediately implemented once it is green lit by President Ferdinand Marcos, Jr
  • Santiago claims there is a disinformation campaign against the system by those who stand to lose heavily from its implementation

The implementation of the Philippine Ports Authority’s (PPA) container registry and monitoring system for foreign containers has been deferred indefinitely amid calls from various stakeholder groups to scrap the program.

Sa ngayon kasi dine-fer ng mayorya ng PPA Board ang implementasyon ng programa at wala pang kasigraduhan kung kailan ito magsisimula (Right now majority of the PPA Board decided to defer the program and there’s no telling when it will start.),” PPA general manager Jay Santiago said in a statement.

Still, Santiago said they will continue to improve the program so it can be implemented once green lit by President Ferdinand Marcos, Jr.

Seventeen organizations recently called on Marcos to intervene and immediately scrap PPA Administrative Order 04-2021, saying it will add to cost and “threatens to cripple the transport and logistics industries and the national economy as a whole.”

PPA AO 04-2021 prescribes the policy on the registration and monitoring of foreign containers entering and leaving PPA ports. It requires foreign containers to register in the Trusted Operator Program-Container Registry Monitoring System (TOP-CRMS) and to secure a container insurance policy.

CRMS is an electronic system to monitor and track the location of all foreign-owned containers originating from foreign ports, and entering and leaving ports under PPA’s jurisdiction. TOP is a know-your-customer mechanism that aims to help eliminate redundant procedures in container registration and monitoring.

Since PPA introduced the idea of the system in June 2021, it has been opposed by various stakeholders and business groups who claim it adds to cost, and is a non-value adding regulatory burden that encroaches on the functions of the Bureau of Customs (BOC), claims that the port authority has repeatedly denied.

PPA earlier said TOP-CRMS addresses the long-standing issue on return of container deposits imposed by foreign shipping lines, and the return of foreign empty containers.

The 17 organizations that wrote Marcos, however, estimate the direct financial cost alone from the additional insurance, transaction, and trucking fees required by TOP-CRMS will result in an almost 50% increase in the cost of importing goods or, in real terms, an additional annual import cost estimated to be at least P35 billion.

They added the system will worsen inflation, will not be a solution to port congestion, and is a “clear usurpation of Customs function.”

Two stakeholders’ organizations, said they support the system though, saying they see it as the solution to the return of container deposit and empty containers.

Disinformation campaign

Santiago also claims there is a disinformation campaign against TOP-CRMS by certain groups.

Ang problema po kasi natin kahit na anong eksplanasyon po ay di sapat kung ang motibo po ng mga tumututol ay dahil nga ayaw nilang mawala ang napakalaki nilang kinikita mula sa mga  kaawa-awang importers at shippers. Mahirap po talagang tanggapin ang paliwanag lalung lalo na kung sila pong mga tumututol ay may kapasidad at mas may pera para maglahad ng mga di accurate na impormasyon para basagin at para mawalan po ng kredibilidad ang pagbabagong ating nilalayon. (Any explanation won’t be enough because those against the system do not want to lose their huge earnings from poor importers and shippers… and they have the resources and funds to spread disinformation against our push for change.”

He said there is strong pushback against the system, especially by foreign shipping lines and big businesses that will lose huge earnings once TOP-CRMS is implemented.

He noted TOP-CRMS will make unnecessary the imposition of container deposits by foreign shipping lines, which he said ranges from P10,000 to P30,000. The return of container deposits is a long-standing issue in the industry as it takes months, even years, for some shipping lines to return container deposits.

Santiago claims if TOP-CRMS was implemented last year, stakeholders would have paid only about P1.1 billion instead of P25 billion to shipping lines.

Under the proposed implementing operational guidelines (IOG) of AO 04-2021, a container insurance of P980 plus value added tax (VAT) will be required in lieu of the container deposit.

Stakeholders earlier pointed out though that a container insurance is an outright cost while container deposits are returned albeit over a longer period. They also noted that posting of the container deposit is not the real issue but the delays in its return, an issue which they said will be addressed by a bill already being deliberated in the Lower House.

Santiago earlier acknowledged PPA cannot assure that container deposits will no longer be imposed by shipping lines once TOP-CRMS is implemented as the ports authority does not have jurisdiction over foreign carriers.

On the claimed duplication of TOP-CRMS with BOC’s Electronic Tracking of Containerized Cargo System, Santiago said the latter only covers cargoes destined for customs warehouses and facilities, while the former will apply to all containers passing through PPA’s terminals.

He denied TOP-CRMS will add to the bureaucracy, saying truckers will not need to submit additional documents and that manual intervention by the system is limited and only requires truck drivers to input information to a tablet provided by PPA during deliveries.

Moreover, Santiago said TOP-CRMS will solve the issue on the return of empty containers as they will provide shared staging facilities where empty containers can be returned to.

Stakeholders, however, said the transfer of empty containers to PPA-authorized staging facilities outside the ports will create additional bottlenecks for containers going in and out of Manila ports, the pilot areas of implementation for TOP-CRMS.

Under the proposed IOG, all empty containers for re-export are required to be endorsed to a PPA-designated staging facility at least 72 hours prior to departure and this entails a service fee of P3,520 plus VAT per container beyond the first three days.

Santiago also denies claims of lack of public consultation for AO 04-2021. He said public consultations started in 2019 before the PPA Board approved AO 04-2021, adding that the PPA has changed the draft IOG a few times in consideration of inputs proposed by stakeholders.

The first PPA public consultation that introduced the idea of monitoring foreign containers was held in June 2021 with some stakeholders and no trucking organizations present. AO 04-2021 was issued a few months after, in September 2021. PPA in March 2022 had bid out the contract for TOP-CRMS and the lone bidder, the joint venture of NextIX, Inc. and Shiptek Solutions Corp. won. The contract was awarded in April 2022 and the notice to proceed in May 2022.

A public consultation on AO 04-2021’s IOG was scheduled also in May 2022 but was postponed until further notice. It was again scheduled in December 2022 but was postponed and was finally conducted on January 4, 2023. Prior to the January 4 consultation, PPA also called focus group discussions. – Roumina Pablo