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The Philippine Exporters Confederation, Inc is seeking further study of the proposed increase in storage fees for foreign containerized cargoes
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The group said the proposal should undergo a regulatory impact assessment in keeping with Republic Act No. 11032 or the Ease of Doing Business law
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It also suggested waiving fees for uncontrollable delays in container retrieval and encouraging shipping lines to provide parking yards or monitor available storage space
The Philippine Exporters Confederation, Inc. (PHILEXPORT) is seeking further study on the proposed Philippine Ports Authority (PPA) hike on storage fees for foreign containerized cargoes, noting the policy would jack up charges and adversely affect shippers and the overall economy.
In a letter to PPA general manager Jay Daniel Santiago, PHILEXPORT said the proposed rate hike should undergo a regulatory impact assessment (RIA), as per Republic Act No. 11032 or the Ease of Doing Business law.
“This is to prevent causing undue regulatory harm that might arise from the higher charges,” the letter dated November 8, 2023 and signed by PHILEXPORT president Sergio Ortiz-Luis, Jr., said.
PPA is seeking to raise storage charges for foreign containerized cargoes beyond the free storage period (FSP) by 32%, and introduce a 150% surcharge on reefer container storage to alleviate congestion at terminals by encouraging timely container withdrawals.
RELATED READ: PPA seeks hike in foreign container storage charges beyond free period
In an October 18 public consultation on the proposal, the PPA Commercial Services Department noted storage rates for foreign containerized cargoes, which include imports, exports, and transshipments, have remained unchanged since 2014.
It must be noted though that a similar increase in 2014 did not alleviate the buildup of containers exceeding the free storage period at PPA ports.
PPA said the rate increase is not intended as a revenue source but aims to optimize yard space usage and expedite the withdrawal of import containers, preventing congestion. The 150% surcharge on reefer storage rate is meant to compel importers to pull out their customs-cleared containers, ensuring essential storage space inside the ports, the agency explained.
In its letter, PHILEXPORT complained it has yet to be provided a copy of the proposed order, saying: “We were informed that the deadline for the position paper is five days after the hearing on October 18. However, that assumes that PPA has already provided us with a copy of the proposal.”
It said that as of Nov 8, it has not received the proposal, “which should have been the basis of our position despite our repeated email request for a copy. This position was then made based on the pieces of information that were quickly flashed on the Zoom screen during the hearing,” PHILEXPORT said.
During the consultation, PHILEXPORT emphasized “any additional cost will hurt the economy and stakeholders that are facing inflation and a weak global economy.”
The Supply Chain Management Association of the Philippines criticized the timing of the proposal, given recent increases in transport fare, minimum wage, and basic commodity prices.
Aside from the RIA, PHILEXPORT recommended the following:
- No fees should be imposed when containers overstay due to reasons beyond the shipper’s control.
- Exclude national and local holidays when counting days beyond the FSP.
- Base the rate increase on the average inflation level since the last fee adjustment, as PHILEXPORT finds PPA’s proposed increases too burdensome.
- Urge shipping lines to provide yards for parking containers or monitor container yards with available storage space.
As port regulator, PHILEXPORT noted PPA has the authority to levy dues, rates, or charges for port services. Stakeholders and business groups have, however, long recommended that PPA’s regulatory and commercial functions be separated to avoid conflict of interest.
