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HomeBreaking NewsNorth Port operator eyes 15.33% hike in cargo handling tariff

North Port operator eyes 15.33% hike in cargo handling tariff

  • Manila North Harbour Port, Inc. is seeking a 15.33% increase in cargo-handling tariff and passenger terminal fee in North Port, the domestic terminal in Manila North Harbor, covering the period 2015 to 2020
  • The Supply Chain Management Association of the Philippines and the Philippine Exporters Confederation, Inc. want the tariff hike postponed, noting that businesses are still reeling from COVID-19’s impact
  • The Philippine Liner Shipping Association said they will pass on any increase to cargo owners

The Manila North Harbour Port, Inc. (MNHPI) is seeking a 15.33% increase in cargo-handling tariff and passenger terminal fee in North Port, the domestic terminal in Manila North Harbor.

The petition covers the years 2015 to 2020, MNHPI corporate affairs and claim head Mark Vincent Escalona said in a presentation during a virtual public hearing on July 2. Escalona said MNHPI’s last cargo-handling tariff adjustment covered only up to 2014 and no adjustment requests were made from 2015 to 2020. Its passenger terminal fee, which was set in 2014, has also not been adjusted since.

The petition does not cover cranage, roll-on/roll-off terminal fee, storage charges, parking fees, and porterage rates. Neither does it cover other services such as hustling of containers, administrative fee, non-standard lifts, crane standby, extra labor services, equipment rental/hire, weighing fees, lifting and closing of hatch covers, lids and supporting beams, handling of gearbox, dangerous cargo fee, and collection of garbage.

MNHPI’s petition is pursuant to Philippine Ports Authority (PPA) Administrative Order (AO) No. 02-2018, which prescribes a new standard and uniform formula and procedures for cargo-handling tariff adjustment.

Under AO 02-2018, which took effect in March 2018, the cargo-handling/terminal operator may apply for a cargo-handling tariff adjustment if the consumer price index (CPI) has increased by at least 5% within a three-year period.

Escalona noted that MNHPI has complied with AO 02-2018 requirements. He also cited investments made by the terminal operator, which have reached P11.47 billion as of December 2020. For the period 2015 to 2020, actual investment cost was P3.93 billion. For 2021 to 2024, MNHPI estimates expenditures would top P2.60 billion.

Escalona explained the 15.33% increase is derived from two components.

The first is the 7% tariff increase in 2018, which was based on the CPI adjustment factor for the years 2015 to 2017 and was approved by PPA for Manila South Harbor and Manila International Container Terminal (MICT)—both situated in Manila like North Port. Escalona said they would like a similar increase to be implemented in North Port as well.

The second component is the 8.33% tariff increase based on the CPI adjustment from December 2018 to December 2020. Escalona noted the 15.33% computation is lower than the actual CPI adjustment from December 2014 to December 2020 of 18.27%.

In a sample computation, Escalona said the 15.33% increase would mean arrastre and stevedoring for a 20-foot container will incur an additional charge of P147.15. Iron and steel arrastre and stevedoring will carry an additional P42.41 charge per ton.

SCMAP, PHILEXPORT push back

Both the Supply Chain Management Association of the Philippines and the Philippine Exporters Confederation, Inc. (PHILEXPORT), however, want the tariff increase postponed, noting businesses are still reeling from effects of the COVID-19 pandemic.

More than half of the stakeholders who answered a quick survey during the public hearing also opposed the petition.

PHILEXPORT assistant vice president for advocacy Ma. Flordeliza Leong, during the public hearing, asked if the petition could be reconsidered and implemented at a “better time” when businesses have recovered and the pandemic has been declared officially out.

In response, MNHPI general manager Romeo Salvador said that while they take note that businesses are having a hard time during the pandemic, the port operator has also been affected and needs to recover its costs.

Salvador also said MNHPI’s contract with PPA comes with development commitments and “without this kind of tariff increase, we will not be able to meet those commitments.”

He added they have not been given leeway on implementation of their commitment despite the pandemic.

On the part of shipping lines, Philippine Liner Shipping Association president Mark Matthew Parco said they can no longer absorb the additional cost the petition would bring if approved by PPA.

He noted that while carriers have not increased their freight rates of late and have no plans of doing so, they will pass on any new increase to cargo owners. The carriers will also push that charges be paid by cargo owners directly to the port operator.

Stakeholders have five working days from the conduct of the public hearing to submit their position papers. – Roumina Pablo

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