Foreign liners post 2.5% rise in Q1 volume at PH ports

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Patrick Ronas
Patrick Ronas
Patrick Ronas, president of the Association of International Shipping Lines

Cargo throughput of international shipping lines servicing major Philippine ports rose 2.5% in the first quarter of the year to 774,818.5 twenty-foot equivalent units (TEU) from 755,653.5 TEUs year-on-year, according to data from six port operators.

Imports accounted for 385,951 kg of the total and exports, 388,967.5 TEUs, based on statistics culled from International Container Terminal Services, Inc., Asian Terminals Inc., Cebu International Port, Davao Integrated Port and Stevedoring Services Corp., Mindanao International Container Terminal Services, Inc., and South Cotabato Integrated Port Services, Inc.

Laden containers represented 534,445.25 TEUs while empties reached 241,422.25 TEUs.

Patrick Ronas, president of the Association of International Shipping Lines (AISL), said for the full 2014 he expects “flat” volume growth with imports “sustained” at current levels.

“Ships are growing but the trade is not really growing. Exports, for example, are far lagging behind its previous performance about four or five years ago.  There was a time when exports were the main driver of our economy; now it’s what, third?” Ronas, who is also executive vice president/general manager of Mstar Ship Agencies, Inc., told PortCalls in an interview.

Trade wise, the ASEAN economic integration in 2015 offers the possibility of increased exports across the region although based on a report, the AISL president cited, integration has already begun in 2010, with most tariffs now down to zero.

“If there should be any impact, we’ve been feeling it since 2010 because most tariff are now at zero amongst partner countries.  There are only a handful of commodities that remains to be negotiated.  In terms of investments, shipping lines have always been very careful considering the marginal upswing in the trade. We do not foresee anything dramatic in the near term,” Ronas said.

Asked if new players are expected with ASEAN integration, he replied “almost all” are in the Philippines, and if they are not, their partners or alliances are.

“We are already squabbling over a small volume of Philippine trade,” he said, noting that shipping lines “actually have enough competition at the moment.”

 

Truck ban

A greater more immediate concern is the Manila truck ban, which has affected not just the container business but all players in the supply chain.

The truck ban has resulted in 300 to 400 containers unable to get out of terminals every single day, according to one of Ronas’ sources. “So at the end of one working week you have at a minimum 1,500 containers stuck in the terminals – and this number continues to balloon”.

There is also a problem of moving the empty containers around the port as they are only allowed to enter Manila in the evening.

Ronas said the Philippine Ports Authority could help identify potential container yard sites, which must be near the ports to ensure lower costs.

In order to mitigate the effects of the ban, he said some shipping lines have been “flexible, providing longer freetime on container demurrage and detention. This would, however, depend on the commercial decision of the individual shipping line.”

He pointed out that fixing the problem does not lie with terminals. “The terminals are very efficient, both terminals, no doubt about that. The problem is you’re not getting your containers out. It’s not the call of terminals. Terminals are actually ready anytime to handle all of these ships.  But if the containers do not undergo their usual cycle then the problem begins and it takes some time for them to recuperate.”

He said consignees, exporters and other supply chain players could look at operating on Sundays to help alleviate effects of the truck ban.

 

Overstaying containers

“At the Manila International Container Terminal, you have about 5,800 overstaying containers and around 2,100 at the South Harbor to date,” Ronas said.

“Over the years, we’ve been appealing to them (Bureau of Customs) to immediately auction off or dispose of (overstaying containers). As you know, Customs has no warehouse and our containers are being used as a temporary warehouse facility to store these goods. This present situation deprives shipping lines from making use of their empty containers for export purposes.”

In other countries, he said it is the Customs agency that looks for a warehouse where seized goods can be stored and empty containers returned to shipping lines.

Ronas said that for the longest time, the auction of seized and abandoned shipments was being carried out at a snail’s pace, save for those that came with high duties. He added that this is due to the absence of well-coordinated, streamlined Customs procedures on such an auction. He lamented that some of the overstaying containers have been sitting at the ports for almost seven years.

“What they (BOC) have to do is to follow their own rules,” the AISL president said, citing the Tariff and Customs Code of the Philippines, which states that if no entry is filed within 30 days from the day of last discharge, the shipment is impliedly abandoned and becomes government property and subject to auction.”

 

Container deposit arrangement

Meanwhile, Ronas said there may be another foreign shipping line participating soon in the AISL and Philippine International Seafreight Forwarders Association’s container deposit agreement.

“I think there’s a fourth one coming soon,” he said, adding that the plan is to have five by the end of the year.

Under the program which is purely voluntary, a PISFA member company will be allowed to deposit company checks as container deposit with AISL participating carriers. The check will be returned to the PISFA member within three to seven days upon return of the container within the freetime period. – Text and photo by Roumina M. Pablo