PH domestic shipping lines agree to cut cargo, passenger rates

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North Harbor_MinesDomestic shipping operators in the Philippines have begun adjusting passenger and cargo rates as directed by the Maritime Industry Authority (MARINA) amid falling oil prices.

MARINA late last year issued Advisory No. 2014-30 enjoining all domestic shipping companies operating passenger and cargo ships to “reasonably adjust” rates in response to the series of rollbacks in the price of petroleum products in the local and global markets.

MARINA is complying with a Department of Transportation and Communications directive last year to attached agencies (MARINA, Civil Aeronautics Board [CAB], and Land Transportation Franchising and Regulatory Board [LTFRB]) to implement in their respective jurisdictions strict monitoring of rates charged by public service providers.

CAB early this year disallowed domestic and foreign airlines from levying a fuel surcharge. LTFRB also ordered a rollback in jeepney fares in certain areas, and plans to do the same with bus fares.

Passenger and cargo rates in the domestic liner shipping industry have been deregulated since 2004 through Republic Act No. 9295 (Domestic Shipping Development Act of 2004), but MARINA noted it has the reserved/plenary power to intervene in the rates set by carriers “to protect and safeguard the interests of the riding public by ensuring that the rates being charged remain just and equitable.”

Based on preliminary reports from MARINA Regional Offices, domestic shipping operators in Davao, Batanes, Cotabato and Cagayan Valley have adjusted their rates from P1 to as much as P50 for passengers (depending on destination) and P0.75 to P3 per kilo for cargoes.

Moreover, some roll-on/roll-off (ro-ro) operators have cut passenger fares by 20% for the Batangas to Romblon route.

The Visayan Association of Ferryboat and Coastwise Shipping Operators operating ro-ro ships have agreed to implement a rollback after reviewing current rates. Rate reduction will be on an individual company basis, as operators have different operations and costs.

Tacloban operators have, however, sought an exemption from the MARINA rollback proposal, pointing to higher maintenance, repair, and labor costs in the aftermath of typhoon Yolanda; they noted they have also not recovered their investments after other typhoons Ruby and Seniang.

Meanwhile, MARINA said members of the Philippine Liner Shipping Association are considering a 16% rollback in the bunker surcharge for cargoes, for ships originating from Manila going to the Visayas and Mindanao.

As for cargo rates, operators have accommodated requests to lower such rates for construction materials intended for the rebuild and repair of houses of typhoon victims. For instance, cement rates have been cut from P10 or P12 per sack to P5 per sack. – Text and photo by Roumina Pablo