Exporters cry over continuing high port charges

Published March 17, 2021, 4:24 PM

by Bernie Cahiles-Magkilat

Exporters scored the exorbitant and duplication of port charges, making the country’s logistics and transportation cost the highest in the Southeast Asia region. 

Dr. Henry Basilio, chairman of PhilExport networking committee on logistics and transportation, reported at the PhilExport 1st Quarter General Membership Meeting that they are still awaiting for the Philippine Ports Authority (PPA) to act favorably by issuing revised administrative order on their recommendation to remove the high cost of port charges.

In particular, Basilio cited doubling of cost in the proposed collection of P1,587 in cranage in addition to the existing arrastre fee of P1,575. Shippers are also faced with a 5-7 days of delayed shipments because ships are assigned different terminal. 

MB File (Photo by Ali Vicoy)

Traders argued against the proposed cranage (the price paid for the use of a crane) stressing that a crane is supposedly a part of the ship’s gear.

With the cranage, Basilio said, the cargo handling cost is effectively doubled. “This logistics cost will eventually be borne by the consumers,” he said.

Business groups led by the PhilExport, Philippine Chamber of Commerce and Industry and the Supply Chain Management Association have already raised this issue of doubling cost and the new berthing procedure at the North Harbor as a test case of the newly created Shippers Protection Office. The matter, however, was referred to the PPA which has yet to act on their letter of complaint.

The business community has recommended for a review of this new fee and procedure to determine the level of impact of this regulatory  burden to exporters, said Basilio. 

In addition, traders have complained of the mandatory weighing of containers at the port as this also entails another cost. In addition, shippers argued that this service has been paid for already by an existing provider and therefore there is no need for another weighing procedure. 

Exporters also said that they have a hard time getting vessel space allocation.  Because of the pandemic, shipping firms also imposed lockdown measures resulting in some of the ships being laid up. But as trade reopened in the second quarter, there was a resultant container imbalance. Shipping firms said there is enough containers for Philippine shippers but space allocation is not guaranteed.

They were, however, told that the market is seen to normalize after the Chinese New Year.

Already, comparative data from the Association of International Shipping Lines showed that the

Philippines’ stevedoring/arrastre in Manila is 25 percent higher than Batangas and 233 percent higher than General Santos port for a 20 footer empty container.

In South Asia, the Manila stevedoring cost is 31 percent higher than Singapore for  20-footer laden container, and 258 percent more than Saigon.

In addition, the demurrhage fee in the country ranges from $18.90  for the 6th-10th day that the cargo remained at the port, $37.60 a day for the 11th-15th day, and $47.50 for the 16th day onwards. These are higher than Korea ($13 for the 8th day onwards), Malaysia ($21 for the 8th day-10th, $23 for 11th -14th, and $34.70 for 15th -20th; and China’s $12 for 8th day to 14th and $24 from 15th to 20th. 

These countries also grant 7 free days to shippers or free storage period as against the Philippines’ 5 days. Although shippers are now allowed up to 8 days of free days, the reckoning period has been changed resulting in shortened free days. 

The additional cost of logistics and transportation would further aggravate the already high cost of doing business in the country.