TROUBLE AT THE PORTS by Chito Junia
In the early part of 2014, the country’s two major ports, the Port of Manila (POM) and the Manila International Container Port (MICP) experienced its worst congestion problem ever. Triggered by the City of Manila’s implementation of its expanded truck ban which limited the movement of trucks within the streets of Manila to only a few hours each day, container yard utilization at the Asian Terminals, Inc. (ATI) and the International Container Terminal Services, Inc. (ICTSI), the private companies operating the Port of Manila (POM) and the Manila International Container Port (MICP) respectively, were virtually maxed out leaving no space for new container arrivals.
Ship berthing schedules were gravely affected and cargo ships had to wait at the Manila Bay anchorage for days and weeks before they could unload their cargoes. The truckers’ delivery turn-around time was also affected when the usual one-day delivery turn-around time prior to port congestion took days to a week or more at the height of port congestion.
The country’s import/export industry were first to feel the crunch. The manufacturing sector took a big blow as deliveries of raw materials from the ports to the factories were mostly delayed, forcing some factories to cut down its production. There were even factories that reportedly closed shop at the height of port congestion.
The export industry also took a beating when it could no longer meet timely delivery of finished products to its foreign clients. The president of a Marikina City shoe manufacturers association said, they could no longer meet delivery commitments because of the delays in the delivery of their much needed imported raw materials.
Cost of Importation Shoots Up
The situation also caused a sharp increase in the country’s cost of importation. Truckers more than doubled their rates to recover losses caused by port congestion and shipping lines collected as much US$ 1,500.00 per containerized van in additional port congestion related fees. The fees included the port congestion fee, emergency recovery fee, terminal handling fee and container detention fee among others.
The condition at the two ports reached alarming levels prompting the government and private sector to intervene. And after months of negotiations with the City of Manila to lift its expanded truck ban and the implementation of corrective measures at the ports, the government, in March 2014, declared that port congestion at POM and MICP had been resolved.
Shipping Lines Continue to Collect Port Congestion Related Fees
The government’s March 2014 declaration was received by industry stakeholders with optimism, even if there were those who were skeptic about it. Most industry stakeholders believed that the government’s declaration would bring down the cost of importation to its pre-congestion levels as shipping lines would no longer be collecting port congestion related fees.
But they were wrong. Over a year after the government’s declaration that congestion at the country’s two major ports had been resolved, international shipping lines still continue to collect port congestion related fees.
According to Port Users Confederation (PUC) President retired Col. Rodolfo T. De Ocampo, the continued collection by the shipping lines of port congestion related fees, even if the government had already declared the problem as resolved over a year ago seems unreasonable.
“There must be a resolution to this issue, if only to save port users and consumers the burden of carrying these unnecessary fees.” De Ocampo said.
For her part, Aduana Business Club, Inc. (ABCI) President Mary Zapata said, shipping lines are still charging as much as P 60,000.00 per 40-footer container van, most of which are still port congestion related fees.
“They may have stopped collecting port congestion fees, but the total amount we were paying the shipping lines for every containerized van at the height of port congestion barely moved.” Zapata said.
An officer of the Chamber of Customs Brokers, Inc. (CCBI), an association of licensed and Bureau of Customs (BOC) accredited customs brokers also questioned the shipping lines’ collection of recovery fee.
“Why are they still collecting a recovery fee. What is this amount for and what are they trying to recover”, she said.
Government Helpless on Shipping Lines
When the shipping companies started collecting port congestion related fees at the height of port congestion, the issue on what the government can do on the unregulated charging of fees by shipping companies took center stage.
During a 2014 Federation of Philippine Industries (FPI) forum on port congestion where Department of Trade and Industry (DTI) Secretary Gregory Domingo was its keynote speaker, Domingo was asked on what government agency regulates the shipping lines. Unfortunately, Domingo could not make a categorical answer.
In another port congestion related forum organized by the PUC where Cabinet Cluster Head Secretary Rene Almendras was its keynote speaker, Almendras stressed that the government cannot regulate the shipping lines since these are international companies. Not even Department of Transportation and Communication (DOTC) Secretary Joseph Emilio Aguinaldo Abaya, the government agency that has supervisory control over the Philippine Ports Authority (PPA) and MARINA, could clarify the issue. Bureau of Customs (BOC) officials for their part say their mandate is only revenue collection.
Port Users and Consumers Hostaged?
Amidst the confusion on where port users can go and what they can do to address their concern over the unregulated collection of fees by shipping lines, some groups have chosen to take the radical move of holding protest rallies, while there are those who still hope for the government’s intervention.
International shipping line companies have their representations in the country through the Association of International Shipping Lines (AISL), a locally registered association. Shipping lines also have their local agents, where importers and customs brokers can transact for their shipping needs.
But according to some port users, while they have had meetings with the AISL on this regard, the association seems helpless on the issue and allegedly avoids, as much as possible, discussing the matter.
Meanwhile, some port users have raised skepticism on the government position on the issue saying that, there must be a connection between the international shipping lines and Philippine laws where the government can regulate, or at least, monitor the charging of fees by shipping companies.
“If international shipping lines, through its local agents or other authorized entities, are able to collect payments from the Philippines for its services, these entities must be registered in the Philippines to enable them to issue receipts, making them subject to Philippine laws,” a port user said.
But while port users are still hopeful for a resolution on the issue, some industry stakeholders, however, believe that without government intervention, resolving the issue on the unregulated collection of port congestion related fees by shipping lines could be far from over. Which brings to mind the question, “If we are the bosses, have we been abandoned by our servant?”.