Home » Customs & Trade, Maritime, Ports/Terminals » DoTr push barging of empty containers to Subic port

Subic port photo courtesy of Subic Bay Metropolitan Authority

The Department of Transportation (DOTr) said it will push shipping lines to return empty containers to North Port, Manila’s domestic terminal, where they can then be transported by barge to Subic port for pickup and evacuation by vessels, according to DOTr officer-in-charge Undersecretary for Maritime Fernando Juan Perez at a November 28 Lower House Committee on Transportation (COTr) hearing.

The return of empty containers is a longstanding issue that has especially escalated this year due to a confluence of events: bad weather that has delayed some vessels and led to berthing issues; high yard utilization at container terminals due to the peak season; limited capacity of container depots; and trade imbalance (three laden containers coming in against one laden container for export leading to more empty containers in the country at any given time)—all of which have caused a knock-on effect on the supply chain.

Shipping lines that do not call Subic but wish to evacuate their empty containers from Manila can co-load with shipping lines calling Subic port. The initial phase of the project is expected to start on December 4, Perez said.

He said three barge operators interested in the project are now holding talks with shipping lines.

Perez noted a feeder vessel bound for Singapore that calls Subic may also be tapped for co-loading.

He said DOTr has discussed this transfer plan for empties with International Container Terminal Services, Inc., the mother company of Subic port operator Subic Bay International Terminal Corp. DOTr will also coordinate plans with the Subic Bay Metropolitan Authority, which has jurisdiction over Subic port, whose terminal has a 40% yard utilization.

Shipping lines will bear the cost of barging the empty containers to Subic, which Perez claimed is cheaper than transferring empties via trucks.

Perez added that with this project, DOTr expects trucking rates to go down as market forces come into play and there are fewer empty containers to be delivered within Metro Manila.

But even with this project, Perez said the two Manila international terminals—Manila South Harbor and Manila International Container Terminal—will continue to accept empty containers for double transaction, which entails unloading an empty container at the terminal and then picking up a laden box.

90-day free container stay

On the part of the Bureau of the Customs (BOC), Assessment and Operations Coordinating Group deputy commissioner Atty. Edward James Dy Buco said the customs agency has drafted a customs order that will change the reckoning period for the 90-day regulation on free stay of containers in the country to ensure empty containers don’t overstay and are evacuated at the soonest time possible.

The draft rule, which implements certain provisions of the Customs Modernization and Tariff Act (CMTA), specifically orders that a container be re-exported after 90 days, with the count starting from the date of discharge of the last container from the vessel. This is against the current practice of basing the 90-day dwell time from the date in the equipment interchange receipt (EIR).

This same proposal was already mentioned a few months ago by BOC spokesperson Atty. Erastus Sandino Austria. Austria said the draft order has already been submitted to the Department of Finance for approval.

Austria explained that shipping lines–owners of the containers—are generally compliant with the 90-day period if the reckoning is based on the EIR. But in reality, the container’s dwell time is longer than 90 days if the period from the discharge of the last container from the vessel to the issuance of the EIR is also taken into account.

Under the law, if a foreign container exceeds the 90-day dwell time, it will be considered an importation and levied duties and taxes.

Aside from the draft order, Dy Buco said BOC will also be regulating container yards to ensure the 90-day rule is followed.

He said under the CMTA, BOC has the authority to supervise and regulate third parties, which include container yards, as defined in Section 1226 (Supervision and Regulation of Third Parties). This order is also with the DOF awaiting approval.

Dy Buco told PortCalls on the sidelines of the COTr hearing that six teams have been deployed by the customs bureau to inventory all overstaying empty containers at ports and container yards.

Association of International Shipping Lines (AISL) general manager Atty. Maximino Cruz earlier told PortCalls that AISL recommended maintaining the current rule of counting the 90-day dwell time from the return of the empty container to the shipping line’s nominated depot, as indicated in the EIR, because “only when the empty container is returned to the empty container depot that shipping lines regain full control of their container.”

AISL president Patrick Ronas, in an interview with PortCalls, explained that BOC has jurisdiction over containers only while they are still inside the port;  containers become the “property” or responsibility of consignees once released from customs custody. Shipping lines only gain control of containers once they are returned to container yards.

He said shipping lines understand that on-dock terminals are trying to control their space allocation for empty containers as they prioritize laden containers.

In a meeting with stakeholders on October 25 called by the Export Development Council-National Committee on Transport and Logistics, Container Depot Alliance of the Philippines (CDAP) president Roger Lalu said utilization at CDAP members’ container yards in Metro Manila was at 115%.

He noted that previously, members’ container yards had a capacity of 21,000 twenty-foot equivalent units (TEUs), but this figure has now dwindled to 13,000 TEUs after some members closed their depots.

He added that the dwell time of empty containers has also doubled to 30 days from 15 days.

Lalu said some members are already setting up container yards outside of Metro Manila, particularly in Bulacan. He noted a yard with a capacity of 3,500 TEUs is already operating in the area while another with a 4,000-TEU capacity will open this month.

At the Nov 28 COTr hearing, COTr chairman Cesar Sarmiento said the DOTr, Department of Finance and BOC should coordinate to create short-, medium-, and long-term measures to address the problem of empty container return. They should also discuss the matter with stakeholders and submit proposed measures before Congress goes on recess on December 13, he said. – Roumina Pablo

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