Tuesday, October 26, 2021
HomeBreaking NewsForwarders, brokers welcome PPA’s container insurance requirement

Forwarders, brokers welcome PPA’s container insurance requirement

  • Freight forwarders and brokers’ associations welcomed the new Philippine Ports Authority policy requiring a container insurance in place of container deposits and container maintenance fee
  • Chamber of Customs Brokers, Inc president Adones Carmona said taking out an insurance is cheaper than container deposits required by shipping lines, and may be billed to the importer
  • While she welcomed the PPA requirement, Philippine Multimodal Transport and Logistics Association, Inc president Marilyn Alberto said a container guaranty may be a better option as this involves zero cost
  • The new PPA policy also required registration and monitoring of foreign containers entering and leaving ports under PPA jurisdiction
  • Alberto said she shared concerns of other stakeholders that the container registry and monitoring system may duplicate work of existing systems

The Philippine Multimodal Transport and Logistics Association, Inc. (PMTLAI) and Chamber of Customs Brokers, Inc. (CCBI) welcomed the Philippine Ports Authority’s (PPA) new policy requiring foreign containers to be covered by container insurance instead of container deposits and container maintenance fee required by shipping lines.

CCBI president Adones Carmona, in text messages to PortCalls, said PPA Administrative Order No. 04-2021 is “a welcome development to our members and the importers” as it will lift the “burden of the container deposits, especially the claim of refunds after the return of empty containers” that usually takes months.

READ: PPA to require registration of foreign boxes, container insurance

AO 04-2021 also requires recording in real-time of all containers passing in and out of the port terminals – tracking their location, status, and movements from the time of discharge from the vessel to the time the container is loaded for export. All inbound containers should be enrolled under the system. The order takes effect on October 19.

PPA said it is requiring a container insurance policy in lieu of container deposit and container maintenance fees required by international shipping lines “to protect local importers from additional transaction costs.”

Stakeholders have had a long-standing issue with container deposits, which they said could take months or even years for carriers to return. Foreign shipping lines operating in the Philippines started requiring container deposits in 1995 after many instances of importers not returning empty containers, which are vital parts of a container ship.

It must be noted though that not all shipping lines collect a container deposit, its imposition being a carrier’s business decision, according to the Association of International Shipping Lines (AISL).

Adones said requiring container insurance is better as “premiums are usually cheaper compared to the deposit and may be billed to the importer.”

PMTLAI president Marilyn Alberto told PortCalls they also welcome the idea of a container insurance policy “so that we can do away with the container deposits and container maintenance fee as long as the premium cost is reasonable.”

She noted, however, that some PMTLAI members raised issues with the collection of insurance, such as the insurable interest on forwarders, and hoped the container insurance premium/fee is lower than container deposits and maintenance fees.

A container guaranty may be a better option since this involves no extra cost, Alberto said.

Meanwhile, the PMTLAI chief said she shares the concern of some stakeholders that the container registry and monitoring system under AO 04-2021 may duplicate existing monitoring systems for containers.

AO 04-2021 said the monitoring facility should interface easily with existing container monitoring and tracking systems of other concerned government agencies as well as those of port terminal operators.

Using AISL’s digital platform

Alberto said she supports the proposal of AISL to just develop and expand the association’s GoFast container monitoring system and use it as PPA’s container registry and monitoring system. This eliminates the need for tagging devices and can be integrated with existing port user systems.

Under AO 04-2021, PPA will acquire the technology to implement the registration and monitoring system and maintain and manage tracking devices for the system.

AISL earlier informed PPA of its proposal to develop, manage, and implement a platform that will constitute the port authority’s proposed container registry and monitoring system.

READ: AISL to PPA: Use GoFast as container monitoring system

The platform will “operationalize the concept of monitoring container movements from port of discharge to their return and loading onboard outbound vessel”, which is what PPA’s proposed system intends to do.

AISL’s proposed digital platform will expand its GoFast Container Monitoring System, a web-based trade and logistics platform providing digital connectivity among foreign shipping lines, importers and their authorized customs brokers, terminal operators, off-dock container freight stations (CFS), and off-dock container yard (CY) depots.

GoFast system’s features encompass foreign shipping line import container monitoring, shipping line electronic delivery order, data interface with terminal operator webCRO (container release order), reservation for empty container return to off-dock CY, and automated tagging of container arrivals at off-dock CFS after transfer from terminal (port of discharge).

AISL’s proposed platform aims to facilitate the realization of PPA’s proposed system “that is acceptable to and supported by international shipping lines.”

It will also “eliminate the need for expensive tagging devices and container tracking infrastructure and imposing an entirely container monitoring system that is not integrated with existing port user systems.”

The proposed platform will leverage on the container electronic data interchange (EDI) data that form an integral part of current shipping line operational processes and data exchange with terminals and CY depots.

AISL president Patrick Ronas earlier said GoFast’s import container monitoring system will be expanded to accept and process industry standard container EDI messages for discharge/load (COARRI) and gate-in/gate-out (CODECO).

“Information on containers and their movements [is] owned by shipping lines themselves. EDI messages will be directly transmitted to AISL GoFast expanded system,” Ronas noted.

He said the use of EDI messaging will also not affect movements in the terminal as there are no telematics that need to be physically attached prior to exit or be recovered prior to loading.

The proposed platform also aims to align and harmonize PPA port operations with existing systems for container monitoring and tracking currently operational and implemented, such as BOC’s Electronic Tracking of Containerized Cargo (E-TRACC) System, and multiple track and trace systems maintained by port operators, shipping lines, and off-dock CY depots.

AISL proposed to undertake the project at no cost to PPA and the government. – Roumina Pablo

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