The Philippine government should review its policy on increased storage rates for overstaying foreign inbound containers because it has led to increasing overall logistics costs.
Management Association of the Philippines National Security Head Fernando Martin Peña said Philippine Ports Authority Memorandum Circular (MC) No. 12-2014 must be reviewed because “instead of encouraging importers to move their cargoes, bottlenecks in the process just keep importers from moving the cargo with the additional costs being passed on to the consumers.”
Under MC 12-2014 which took effect on Oct 2, 2014, a twenty-foot container now comes with a storage fee of P5,000 per day beginning the 11th day of storage. This is in contrast to the old rate of P481.30 per day for the sixth to 10th day of storage, and P529.43 per day from the 11th to the 15th day.
The policy was meant to discourage cargo owners from using ports as virtual warehouses and in the process help decongest Manila ports.
At the sidelines of the Jan 8 Private Sector-Technical Working Group press conference on the port congestion, Peña told PortCalls that because of the 2,000% increase in fees to P10,000 (for 40-footer boxes), importers are now having trouble pulling out their cargoes because they need to pay “hundreds of thousands, if not millions” in storage rates.
He noted that for an importer with 15 containers at the port but with capacity to pull out only one per day, he has to pay P150,000 up front for all the containers before he is allowed to pull out one.
“This is not just bad for the traders, it is ultimately worse for the customers and the country,” Peña said.
“It is just unfortunate that this comes at a time when the Philippines needs to compete not just with its neighbors but on a global scale,” he added.
The Export Development Council (EDC) is also asking for a government review of the efficacy of increased storage rates for boxes staying at the port.
Meanwhile, Andrea Hibe of EDC said importers are still “in a great deal of pain largely because of the difficulty in getting a provisional Importer’s Clearance Certificate because of the new cumbersome requirements from the Bureau of Internal Revenue (BIR).”
The group is asking BIR to streamline its processes for issuing clearance to importers and customs brokers because the long wait for accreditation means longer stay for shipments inside the port.
(BIR recently issued Revenue Memorandum Order No. 1-2015 that amends the documentary requirements for prospective importers and customs brokers, as well as for those granted with provisional clearance. The memo has trimmed the documentary requirements of importers and customs brokers who have transactions at the Bureau of Customs in order to expedite provision of their Importer’s Clearance Certificate and Broker’s Clearance Certificate.) – Roumina Pablo
Image courtesy of Victor Habbick at FreeDigitalPhotos.net
