Port congestion solved, says PH gov’t; cargo community takes wait-and-see attitude

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Manila International Container Terminal. Photo courtesy of port operator International Container Terminal Services, Inc.
Manila International Container Terminal. Photo courtesy of port operator International Container Terminal Services, Inc.
Manila International Container Terminal. Photo courtesy of port operator International Container Terminal Services, Inc.

Congestion at the Port of Manila has been resolved and operations at international terminals have normalized, according to a government official.

But industry stakeholders contacted by PortCalls would much rather hold off commenting on the government pronouncement until they see a drop in transport charges, including trucking rates, to pre-port congestion levels.

In a statement, Secretary Jose Rene Almendras, head of the Cabinet Cluster on Port Decongestion (CCPD), said “operations at the port of Manila have been completely normalized and congestion has been resolved” due to “combined efforts of the … CCPD, the Technical Working Group of various agencies, and the cooperation from the private sector.”

Over the past three weeks, vessels with berthing schedules were accommodated accordingly and vessels arriving out of their scheduled window were able to dock within 24 to 60 hours from arrival, Almendras explained.

Since November last year, he noted more cargo has been moved at a faster rate than before the congestion.

The massive port congestion has been spawned by the Manila City daytime truck ban, adopted in late February and lifted indefinitely in September.

“By February 2015, the benefits of a fully-decongested port are in place,” Almendras pointed out.

From a high yard utilization of 105% during the height of the truck ban in May 2014, Almendras said present levels range from 79% to 84% for both Manila International Container Terminal (MICT) and Manila South Harbor. He added that both terminals “show improved efficiency, as ports are maximized to facilitate the flow of trade and cargo.”

Mikkel Puyat of the MICT Commercial and Risk Management Division at a maritime forum last week said yard utilization at MICT has further gone down to 76%, berth moves per hour have improved to 23-24 moves, and vessel waiting time has improved to one day only.

Puyat noted shipping lines are arriving earlier than their assigned window time so as not be late. “As long as they’re able to meet that window or commitment, they’re able to berth on arrival,” he explained.

Almendras said the enhanced truck ban hours and routes “have ensured efficient flow of cargo without causing traffic congestion.”

He, however, acknowledged the resolution of Manila port’s congestion was a “long process, which was complicated by many factors such as ship scheduling, loaded and empty container handling and the truck ban hours.”

While most of the solutions were implemented early in the last quarter of 2014, the sheer volume of the backlog needed several months to be resolved, Almendras said. Moreover, he noted that the long Christmas holidays, Typhoon “Amang”, the feast of the Black Nazarene, and the Pope’s five-day visit, all constricted cargo movements and extended the period of resolution.

“There was a time that the ports and all the container yards were flooded with empty containers. As of the end of February 2015, this is no longer the situation,” Almendras noted.

Container Depot Alliance of the Philippines president Carl Fontanilla last week told PortCalls that yard utilization of its member off-dock depots in Metro Manila has gone down to 84%.

In search of lower transport charges

Stakeholders reached by PortCalls for comment are looking for proof of port congestion resolution in rates charged by cargo service providers.

Ma. Flordeliza Leong, assistant vice president of the Philippine Exporters Confederation, Inc. (Philexport), told PortCalls their criteria for normal port situation is the return to pre-congestion transport rates and turnaround time.

When the Manila truck ban was imposed on February 24 last year, service providers jacked up their charges. Truckers increased their rates by at least 50% to defray cost of low truck turnaround. Shipping lines also imposed port congestion-related surcharges to recover losses due to long queues at the terminals.

Supply Chain Management Association of the Philippines (SCMAP) secretary general Norman Adriano told PortCalls in a text message “the final indicator is if the truckers bring down their rates” since “they are the ones using port congestion as an excuse to hold on to their rates.”

He added, “Our goal is to have these service providers revert to their rates prior to the port congestion.”

Asked if container yard utilization will increase after Chinese New Year, a period when cargo movements are traditionally down, he answered: “Only if truck bans are imposed again. The chokepoint is not the port but the roads leading to and from it.”

Both Philexport and SCMAP said they will conduct a survey among their members to check if they now feel the effects of normalization at Manila ports.

Samson Gabisan, director of the Chamber of Customs Brokers, Inc. (CCBI), told PortCalls that while it is true there is now more space inside the containers terminals, “we should not jump (to conclusions) like a chimpanzee.”

“The real barometer is towards the last week of April until May when China shipments come in,” the CCBI official added.

As for trucking rates Gabisan, who runs a truck business himself, said rates have “gone down to a reasonable level” especially since there are less cargo shipments due to the lull brought about by the Chinese New Year.

He noted that trucking rates are still market-driven and if there are truckers asking for high rates, importers can “bargain as there are 7,000 trucks chasing 4,000 trips” per day.

Ruperto Bayocot, director of the Confederation of Truckers Association of the Philippines, said they are still monitoring the situation but noted that truck turnaround has improved “a little”.

Return of empty containers are faster at some depots, he added.

As for rates, Bayocot said some truck operators had already lowered their fees.

Association of International Shipping Lines general manager Atty. Maximino Cruz told PortCalls in a text message that AISL “is reserving its comment as it closely monitors whether the overall improvements made will reach stable normal levels in so far as the average turnaround of vessels is concerned.” – Roumina Pablo