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Manila Bulletin devider Business devider Moratorium on port fees pushed

Moratorium on port fees pushed

Published Apr 25, 2020 12:00 am
By BERNIE CAHILES-MAGKILAT The government has been urged to implement a moratorium on port fees among 9 “doable” recommendations put forward by the business community to improve efficiency and reduce logistics cost as a form of subsidy to the ailing business sector and consumers at large. In a position signed by 15 associations, businessmen cited Inter-Agency Task Force (IATF) Resolution No. 24 approving the recommendation of the National Economic and Development Authority (NEDA) to pursue Supply Chain Regulatory Impact Assessments and to develop the Supply Chain Analysis (SCAN) Dashboard. Based on this, the business community has put forward nine “doable” recommendations. Foremost, businesses would like government to implement a moratorium on demurrage/detention fees, port congestion surcharges, and other penalties imposed on cargoes/shipments stuck at the port due to slow DO issuances/bank processing /customs clearance and apply this retroactively to all shipments affected. The group noted that a recent forum, it was mentioned that international shipping lines are imposing port congestion surcharges of $1,400 per reefer container. On top of this, demurrage charges (₱1,400-2,800 per 40’ dry container; ₱2,800-3,200/day for reefers), and other penalties are likewise imposed. As early as 03 April 2020, the Export Development Council (EDC) already wrote a letter to the Philippine Ports Authority (PPA), Department of Finance (DOF), and Department of Transportation (DOTr) requesting for a waiver on demurrage fees. Businessmen also lamented the failure of the DOF to sign a 2019 Joint Administrative Order (JAO) with the Department of Trade and Industry and DOTr establishing guidelines in the application of local charges imposed by international shipping lines, freight forwarders or logistics companies, customs brokers, cargo truck operators, terminal operators and container yard operators to comply with existing laws and instruct¬ing the Bureau of Customs (BOC) and Philippine Ports Authority (PPA) to improve productivity in the handling of cargoes. Secondly, the groups have bat¬ted for and extension of the free storage period from 5 days to 10 days. Currently, shippers pay storage fees to port terminal operators (after the 5-day free storage pe¬riod) of ₱962-1,443/day for 40’ dry containers and ₱192.50 per hour for reefers. Third, businesses would like the implementation of ‘super green lane’ (SGL) process for Philippine Economic Zone Authority, Clark Development Corp., and Subic Bay Metropolitan Authority shipments/ transshipments. Fourth in their list is for the lifting of truck ban/number-coding since there have been fewer trucks operating during the ECQ period. The groups further called for the improvement in the automation of the Bureau of Customs (BOC). “We do not know when the lockdown will be lifted. Therefore, there is an urgent need to improve the automation process at the BOC. For a start, something drastic must be done to address the downtime arising from inefficient servers of the BOC. Delay or failure to process documents online is a critical factor behind port congestion,” the group said. Businesses also urged for the use of Subic and Batangas as ‘extension’ ports as specified in Executive Order (EO 172 s. 2014) in cases of port congestion and emergency situations. They also appealed to ensure that all shipping lines have sufficient container yard space for empty containers and expedite the accreditation and activation of Inland Container Depots (ICDs) as needed and to rescind Letter of Instruction (LOI) 1005-A issued during the Marcos administration. According to the group, by rescinding LOI 1005-A, it will reduce transport logistics cost by re¬moving the share of the Philippine Ports Authority (PPA) from cargo handling revenues. “We have to put a stop to this policy of sharing from cargo handling revenues (10-20%) which unnecessarily increases logistics cost. The negative impact such a policy brings to the economy is definitely greater than whatever the government does with the revenue it generates,” they said. The strategic impact is that it will correct the conflict of interest where the regulator can increase rates not based on merit or financial justification but based on the benefit that accrues to it.
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