PPA container registry system faces renewed opposition from stakeholders

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  • Stakeholders raised concerns anew on the Philippine Ports Authority’s (PPA) container registry and monitoring system for foreign containers
  • The requirement for container insurance, system redundancy, additional registration and procedures, and added costs are the key points of contention at the Jan 4 PPA public consultation
  • Stakeholders have five calendar days from the public consultation to submit their position papers on the proposed operational guidelines

The Philippine Ports Authority’s (PPA) container registry and monitoring system for foreign containers faced renewed opposition from various stakeholders at the January 4 public consultation called by the agency.

The requirement for container insurance, system redundancy, additional registration and procedures, and added costs are the key points of contention.

The public consultation tackled the proposed implementing operational guidelines (IOG) of Administrative Order No. 04-2021, which requires foreign containers to register in PPA’s Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS) and to secure a container insurance policy.

Stakeholders have five calendar days from Jan 4 to submit their position papers on the proposed IOG.

Even during the first public consultation on the proposed CRMS in June 2021, stakeholders have raised concerns against the system.

Fourteen industry associations and organizations last year called for the immediate revocation of AO 04-2021, citing its potential negative impact on port operations and the economy.

RELATED READ: Groups seek recall of PPA container registry, monitoring order

Another group of customs brokers and truckers sought its deferment and even nullification, claiming the policy has no legal basis and contradicts ease of doing business and trade facilitation.

CRMS is an electronic system to monitor and track the location of all foreign-owned containers originating from foreign ports, and entering and leaving ports under PPA’s jurisdiction.

TOP, meanwhile, is a know-your-customer mechanism that aims to help eliminate redundant procedures in container registration and monitoring.

The TOP-CRMS will initially be implemented at Manila International Container Terminal and Manila South Harbor.

The joint venture of NextIX, Inc. and Shiptek Solutions Corp., the lone bidder for the TOP-CRMS, won the project with a bid price of P877.6 billion. The award of contract was signed in April 2022 and the notice to proceed issued the month after.

PPA assistant general manager for finance and administration Elmer Nonnatus Cadano said the TOP-CRMS is part of the port authority’s efforts to digitalize processes and aims to further make port operations efficient and prevent port congestion. He said it is also part of their campaign against smuggling, and to help the Bureau of Customs (BOC) enforce its 90-day policy for re-exporting foreign containers.

Moreover, Cadano said the system took into consideration the longstanding issue on the return of container deposit by foreign shipping lines, which he noted was one of the top complaints submitted by stakeholders to the Shippers’ Protection Office (SPO). PPA’s Port Operations and Service Department is the secretariat of the SPO created in 2020 to handle shippers’ complaints against domestic and international shipping lines.

Cadano said of the 110 complaints received by the SPO from 2020 to December 2022, 81 were about unreturned container deposits by various foreign shipping lines.

Under the proposed IOG, forwarders, customs brokers, importers, and consignees should secure container insurance through TOP-CRMS as proof of container insurance coverage per container; this will be a requirement for container discharge from the port.

PPA said the container insurance will in lieu of the container deposit and ensure that the containers are returned to shipping lines.

Stakeholders, however, questioned the purpose of the container insurance, noting this is an expense as opposed to the container deposit, which gets to be returned albeit at a longer period.

At the January 4 public consultation, Philippine Multimodal Transport and Logistics Association, Inc. president Fernando Juan Perez noted freight forwarders who have the volume can negotiate with shipping lines to waive the container deposit.

He added that freight forwarders are now using the Container Ledger Account, an online system that simplifies and speeds up container deposit refund.

Discussions revealed that not all shipping lines (such as Maersk) also require a container deposit.

Association of International Shipping Lines (AISL) director Joselito Ilagan questioned why PPA is requiring insurance for containers, a resource owned by shipping lines and not by the ports authority.

When asked if PPA has the authority to prevail on shipping lines and accept the container insurance in lieu of the container deposit, AISL president Patrick Ronas answered “no”.

Ronas suggested that PPA instead wait for the passage of a Lower House bill that will address the issue of container deposit returns.

House Bill 1397 aims to regulate the application of local charges of destination imposed by international shipping lines. It also requires all container deposits to be refunded by the shipping lines and shipping agents within a period of 15 days following the receipt of empty containers in the yard or container terminal of the shipping line. A similar bill was approved on third and final reading by the Lower House last year, but was overtaken by the change in Congress.

RELATED READ: PPA container monitoring system to jack up logistics cost, carriers say

Stakeholders also took umbrage at the TOP-CRMS, which they claimed is contrary to ease of doing business and the administration’s push to lower logistics costs.

Supply Chain Management Association of the Philippines executive director Corazon Curay said they believe the system “does not (add) value” but only adds to cost and processes.

For container monitoring and container insurance, the importer/consignee will be charged P980 exclusive of value-added tax (VAT) per container.

For the use of the PPA container staging facility and other container depot or yards owned and operated by PPA terminal operators, the shipping line will be charged container yard handling and storage fees of P3,520 exclusive of VAT per container.

Philippine Exporters Confederation, Inc. vice president Ma. Flordeliza Leong also reiterated their strong opposition to the system.

For their part, truckers noted the requirement to register with the CRMS is on top of PPA’s requirement for accreditation and permit to operate.

Inland Haulers and Truckers Association president Teodorico Gervacio also pointed out the system takes away from truck owners’ control over driver dispatch. Under the terms of reference for the bidding of TOP-CRMS, the system should be able to manage assignment of driver to a specific truck and dispatch the same to fulfil a work order.

On monitoring foreign containers to comply with the 90-day re-export policy of BOC, Ilagan said the customs agency is already monitoring the period of stay of containers.

Under BOC Customs Administrative Order No. 08-2019, containers arriving in the country, whether loaded or empty, should be re-exported within 90 days from the date of discharge of the last package; otherwise, they will be considered as importation requiring payment of duties and taxes.

As for stakeholders’ claims that TOP-CRMS will be a redundant system as BOC is already implementing its Electronic Tracking of Containerized Cargo (E-TRACC) System, PPA’s Cadano said the customs bureau has acknowledged that PPA’s system has its own purpose and is separate from the purpose of the E-TRACC System.

Cadano said there are discussions between PPA and BOC on the possibility of entering into a memorandum of agreement for the latter to avail of the data that the TOP-CRMS will generate. He said BOC “appreciates” the value of the information and data that the TOP-CRMS will generate that can help them better perform their functions.

Under the proposed IOG, the list of containers enrolled in the TOP-CRMS that continue to remain in the country for more than 90 days will be transmitted to BOC.

Tweaks welcome

While many aired their opposition to the system, Chamber of Customs Brokers, Inc. president Adones Carmona said he is “looking at the brighter side” and noted that for the first time, the government, through PPA, “flexed its muscles” to address the issue on container deposits. He hopes the system can be considered “with some changes”, taking into account the concern of other stakeholders.

Eugenio Ynion, Jr., whose company Shiptek is one of the joint venture partners that won the TOP-CRMS project, noted the system would benefit small freight forwarders that do not have the volume and are thus unable to negotiate for waiver of container deposit from shipping lines.

Cadano said they will take into account all concerns raised on the IOG and the system and will submit a recommendation to the PPA Board. He did not provide a timeline on the implementation of the system.

He noted though that previous PPA digitalization projects faced opposition from stakeholders as well, which he described as normal; he claimed stakeholders later on appreciated the value of the PPA projects.

Coverage

The proposed IOG will apply to all foreign-owned containers originating from foreign ports that will be unloaded at government and/or private ports under the administrative jurisdiction of PPA.

It will not apply to foreign or locally-owned container assets that have entered or are scheduled for re-exportation prior to the effectivity of the IOG.

Containers requiring registration under the TOP-CRMS but exempt from monitoring are the following:

  • Containers originating from foreign ports that do not leave the port of discharge such as, but not limited to, containers classified for foreign transshipment, return-on-board, and foreign cargo remaining on board. The monitoring of these containers will be limited only to its inclusion in the pre-arrival registry of inbound containers uploaded by each shipping line into the TOP-CRMS at least 48 hours prior to vessel arrival.
  • Containers that do not leave the operationally-controlled environment of a PPA-authorized container yard operator and containers that will be moved to other premises or facilities controlled by the same operator, but are not discharged for delivery to importers or consignees.
  • Containers that are uploaded or enter economic zones under the jurisdiction of the Philippine Economic Zone Authority and other freeport zones. Containers leaving or exiting any PEZA jurisdiction, however, will be subject to container monitoring immediately after exiting the PEZA facility.
  • Containers onboard vessels scheduled to dock and are to be unloaded in ports that are not within the jurisdiction of PPA.
  • Containers stored in shipping line-designated container yard that are scheduled for re-export prior to the lapse of the 90-day maximum dwell time period and conveyed or transported to the PPA designated container re-export staging facility at least 72 hours prior to the scheduled loading and departure date, or directly conveyed to the port of departure for loading onto the designated vessel.

PPA will monitor the movement and utilization of all foreign containers while these are within the Philippines. Using the TOP-CRMS, the PPA port management office will remotely monitor the location of foreign-owned containers and ensure that the 90-day period prescribed for their re-export is observed, in accordance with rules issued by BOC.

The container staging facility, meanwhile, will be a shared service facility to be provided by PPA and other container depot or container yard owned and operated by PPA terminal operators, and enrolled in the TOP, which will serve as a staging facility for empty foreign containers scheduled for re-export.

All empty foreign containers scheduled for re-export must be registered with the TOP-CRMS at least four days prior to the estimated date of departure. At least 72 hours prior to departure, the empty containers for re-export are required to be endorsed to the PPA container staging facility.

Monitoring devices will be issued to all PPA-accredited trucking companies after successful enrollment. The accredited trucking company will be responsible for ensuring that each device is functioning, fully charged prior to any registered trip, or plugged in to a power source while conveying containers.

Cadano, in a press briefing after the public consultation, said there are about 3,000 trucks that will be equipped with the monitoring device and assured enough devices for more trucks.

Location tracking of containers will only be activated when conveying a container, whether laden or empty, from and to any location beyond the port of discharge or the container storage area.

CRMS users may store empty containers at the PPA container staging facility, free of charge, for up to three days provided that the storage service is availed within 90 days from entry (inbound/importation) into ports under PPA.

Empty containers staying at the staging area beyond three days but not more than 90 days will incur additional storage charges to be determined and subject to existing approval procedures by PPA. – Roumina Pablo