Groups seek recall of PPA container registry, monitoring order

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  • Groups seek recall of PPA container registry, monitoring order
  • The Philippine Ports Authority policy is “uninformed”, redundant, will cause congestion, hike business costs, according to 14 groups
  • They urged the Office of the President and the National Economic and Development Authority to investigate the measure
  • The groups accused PPA of acting beyond its jurisdiction
  • They say the policy was issued without proper public consultation, and violates the Ease of Doing Business Act, and creates inefficiencies

Industry groups are seeking immediate recall of the Philippine Ports Authority (PPA) order implementing a container registry and monitoring system, which they described as “uninformed”, redundant and will only create port congestion, jacking up business costs.

The 14 associations and organizations requested the Office of the President and the National Economic and Development Authority to “investigate why this measure was introduced despite its harmful potential to stunt the economic recovery of the country still tottering from the coronavirus pandemic.”

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

The group consists of the Alliance of Concerned Truck Owners and Organizations, Alliance of Container Yard Operators of the Philippines, Association of International Shipping Lines, Association of Off-dock CFS Operators of the Philippines, Confederation of Truckers Associations of the Philippines, Customs Brokers Federation of the Philippines, Philippine Association of Meat Processor Inc., Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Philippine Liner Shipping Association, Philippine Multimodal Transport and Logistics Association Inc., Philippine Ship Agents Association, Supply Chain Management Association of the Philippines, and United Portusers Confederation of the Philippines Inc.

PPA in October 2021 issued Administrative Order (AO) No. 04-2021, prescribing registration and monitoring of containers entering and leaving PPA ports, including the scheduling, loading, unloading, release, and movement of all containers. The AO will be implemented under the Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS) and Empty Container Storage Shared Service Facility (ECSSSF).

READ: PPA proposes import container monitoring system

In seeking to recall the container monitoring order, PPA “acted outside of its jurisdiction” with the issuance of AO 04-2021, saying monitoring the movement of containers that pass through international ports handling containerized cargo do not fall under the authority of the PPA, such as those administered by other port authorities and jurisdictions like the Cebu Port Authority, Cagayan Economic Zone Authority, Poro Point Management Corp., Subic Bay Metropolitan Authority, PHIVIDEC Industrial Authority, and Regional Ports Management Authority.

Contrary to the TOP-CRMS general description, the group noted container traffic that goes through the Port of Manila and Manila International Container Terminal is only 68% of the total traffic and not 98%. “This means that AO 04-2021 is incorrectly applied to at least 32% of the total container traffic in Philippine ports, many of which are major ports outside the jurisdictional control of PPA thus, usurping the authority of other independent port authorities.”

They said the real time monitoring of the location, status and movement of containers is already being done by the Bureau of Customs (BOC), which has institutionalized its own monitoring policy under Customs Administrative Order (CAO) No. 08-2019 and has been in effect since August 2019.

READ: BOC formalizes tracking, control procedures for container movements

“The involvement of the Philippine Ports Authority using TOP-CRMS is an unnecessary redundancy outside of PPA’s own scope of responsibilities,” the group pointed out.

The group also claims PPA A0-04-2021 violates Republic Act (RA) No. 1032, or the Ease of Doing Business Act, and its implementing rules and regulations, as well as international standards of good governance.

Moreover, PPA failed to make a regulatory impact assessment before issuing AO04-2021, they said.

Section 5 of RA 11032 provides that “all proposed regulations of government agencies shall undergo regulatory impact assessment to establish if the proposed regulation does not add undue regulatory burden and cost to these agencies and the applicants or requesting parties.”

In designing PPA AO 04-2021 and the Terms of Reference for TOP-CRMS and ECSSSF, the group said PPA failed to consult key stakeholders and even BOC. While there was a public consultation in June 2021, only several representatives were present.

Various stakeholders had also submitted position papers expressing their opposition to the project, but have received no written response from PPA to date.

The group claimed PPA AO 04-2021 violates the Philippine Competition Act and Administrative Order No. 44, Series of 2021, or the National Competition Policy.

They explained the Terms of Reference (TOR) for TOP-CRMS and ECSSSF requiring truckers and other service providers to register under one system–which would then nominate and assign them to the individual transactions (i.e., empty reposition)–demolishes the autonomy of shipping lines to negotiate, manage and monitor their current and prospective vendors.

“This feature in the proposed system creates a monopoly where multiple service providers are at the mercy of the winning bidder for TOP-CRMS, violating the Philippine Competition Act,” the group said in justifying its petition for recall of the container monitoring order.

PPA AO04-2021 is also seen to “create inefficiencies and lead to dramatically higher costs for consumers and businesses especially the micro, small and medium enterprises.”

Should the installation of the tracking device be done inside the terminal, the expected delays caused by waiting, from loading thousands of containers onto the chasses to device installation up to exiting the terminal will add approximately five hours to the movement of containers in the ports.

The expected disruption will not only impact truck availability but also terminal productivity, yard space availability and vessel port stay. The delay will cause disruption and confusion at the two major ports which are already sensitive to even the slightest road blockages, weather disturbances and equipment breakdowns, the group said.

“Imposing such unreasonable and unnecessary requirements for thousands of containers each day will inevitably lead to a repeat of the 2014 port congestion fiasco,” the group warned.

The additional tagging and untagging time will also cause trucks to stay longer in the ports, directly and substantially increasing trucking costs, and ultimately lead to dramatic price increases for businesses and consumers.

The requirement for a 10-hectare facility where tagging and untagging will be done “creates further inefficiencies and disregards the geography of the port and its surrounding areas”, the group added.

They said they are unanimous in emphasizing that this “uninformed idea will only create additional bottlenecks for all containers going in and out of the Manila Ports” and will also most certainly create congestion in surrounding areas in Metro Manila.

Lastly, the group said PPA AO 04-2021 “will derail the country’s recovery from COVID-19” as it “will not improve port efficiency and attract more commerce through the country’s two international seaports but has the potential to derail any improvements made in recent years and discourage the flow of more cargo.”

Improving trade facilitation

PPA AO 04-2021 was issued following a June 2021 public consultation attended by some stakeholders wherein PPA introduced its proposal to monitor the movement of import containers to improve trade facilitation and address concerns about logistics efficiency and costs, such as the long-standing issue of unreturned container deposits.

During the June public consultation and in several meetings and forums, stakeholders voiced their concerns about the system which they said could just duplicate monitoring systems already in place for containers, and can prolong truck delivery cycles and increase logistics costs.

READ: PPA container monitoring system to jack up logistics cost, carriers say

In March, PPA bid out the contract for the TOP-CRMS and ECSSSF.

READ: PPA seeks contractor for P980M container registry, monitoring system

On April 27, PPA awarded the project to its lone bidder, the joint venture of NextIX Inc. and Shiptek Solutions Corp. The contract and notice to proceed were issued on May 2 despite calls by truckers and customs brokers to suspend the policy pending a consultation with stakeholders.

READ: PPA proceeds with P877.6M container monitoring project

A public hearing on AO 04-2021’s implementing operating guidelines was scheduled on May 11 but was postponed until further notice.

PPA Port Operations and Service Department manager Hiyasmin delos Santos said during a recent webinar that this was postponed “after due consideration of the issues raised and the acknowledgement that there’s a need for us to address certain operational issues.”

“We’re continuously working on to ensure that the policy, once we decide to implement it, would be able to address not really all but most of the issues raised against the policy. Again, our appeal is for to give that policy a chance,” Delos Santos said. – Roumina Pablo