New PH license applications for off-dock CY/CFS practically closed for now

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ID-100367855Interested operators of off-dock container yard/container freight stations (CY/CFS) in the Philippines may not apply for a license to operate until the capacity of existing warehouses goes beyond a certain rate of utilization, according to a recent Bureau of Customs (BOC) order.

Customs Memorandum Order (CMO) No. 37-2015, dated October 23 and which took effect immediately, practically closes the door on new CY/CFS applicants until the aggregate capacity utilization (ACU) of existing warehouses for the immediately preceding 12-month period is in excess of 50%. In addition, the new application must be supported by figures pointing to a “definite upward trend” in the volume of consolidated container inbound traffic over the last 24 months.

The ACU criteria is enshrined in a much earlier bureau order, Customs Administrative Order (CAO) No. 5-1996, or the rules for the approval of an application to operate an off-dock CY/CFS facility, which CMO 37-2015 said should be complied with by new applicants.

Association of Off-Dock Container Yard Operators of the Philippines (ACOP) president Alexander Ong, in an earlier interview with PortCalls, said the last ACU data was taken by BOC around five years ago and showed ACU of less than 50%.

Since it is unclear when any new ACU data will be made available by BOC, this effectively means no new license applications could be entertained until then.

CMO 37-2015 is an addendum to CMO 32-2015, which was issued last September and details the revised rules and regulations on establishing, supervising, and controlling off-dock CY/CFS and other off-dock customs facilities outside of the customs zones. CMO 32-2015 was intended to impose stricter rules on CY/CFS operators.

READ: BOC gets tough on warehouses, other customs facilities

CMO 37-2015 was issued following protest by CY/CFS operators over CMO 32-2015; the operators said the latter order could be seen as allowing the entry of new on-dock and off-dock players in an industry not big enough to sustain more players.

Under CAO No. 5-1996, the ACU is computed as the total twenty-foot equivalent units transferred divided by the total capacities in TEUs of the existing off-dock CY/CFS multiplied by 100%.

New licenses, under the same CAO, will be awarded based on the following priority: to existing off-dock CY/CFS operators with room for expansion in their present location and whose capacity utilization is more than 50%; then to a new entrant with a proposed facility better than or equal to the best existing off-dock CY/CFS in terms of location, equipment, and management team.

Meanwhile, under CMO No. 37-2015, all existing CY/CFS will have to submit their application for the renewal of a license to operate and issuance of the Certificate of Authority (COA) to operate directly to the office of the Deputy Commissioner for Assessment and Operations Coordinating Group (AOCG), through the director of the Port Operations Service, and pay the annual supervision fees on or before October 31.

ACOP’s Ong said all association member operators have already complied with the required renewal of license. There are currently 11 ACOP members and one non-member.

The COA is valid for five years, and renewal of accreditation will be “deemed automatic in the absence of any violation provided under CMO 32-2015.”

CMO 37-2015 added that the “Office of the Commissioner, through the Deputy Commissioner, AOCG shall have direct supervision and control of all OCCS (offdock container yard/container freight stations) and OCFs (offdock customs facilities)” and the AOCG chief is “authorized to issue operating guidelines and to delegate such functions and responsibilities to the concerned Collection District as may be necessary.” – Roumina Pablo

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