Manila Bulletin
Philippines
National
Good practice: ARTA green-lights PPA's digital container registration, monitoring system
Philippines
National
Good practice: ARTA green-lights PPA's digital container registration, monitoring system
Good practice: ARTA green-lights PPA's digital container registration, monitoring system
Published Mar 5, 2023 04:49 am
The government agency tasked to ensure to eliminate red tape and facilitate ease of doing business in the country has given a go-signal for the implementation of the Trusted Operator Program – Container Registry and Monitoring System (TOP-CRMS) of the Philippine Ports Authority (PPA).
The TOP-CRMS uses technology for up-to-date container tracking that allows customers, carriers, freight forwarders, and shippers to access the status of their cargoes and containers but has been opposed by business groups.
In giving a green light for the TOP-CRMS, the government’s Anti-Red Tape Authority (ARTA) said the PPA was able to provide more concise and satisfactory evidence on all the sections of the Regulator Impact Assessments (RIA).
The ARTA also classified the Regulatory Impact Statements (RIS) on the implementation of the TOP-CRMS as a good practice.
“This means the ARTA acknowledged the problem on container deposits and empty container returns and recognized that the PPA through TOP-CRMS is providing the solution to the long-time problems of the port users and truckers,” said PPA General Manager Jay Daniel Santiago in a statement welcoming the ARTA decision.
"This is a welcome development, considering the concerns raised about the program, but the green light of ARTA means TOP-CRMS is the best option to solve the current problems” he added.
Ease of Doing Business
In its assessment, ARTA concluded that there is a lack of regulation to address the current issue which is also the main cause of the problem.
It stated that the PPA’s TOP-CRMS also meets the agency’s criteria for cost-saving mechanisms including the fee on container deposits, port access roads, and has reduced the dwell time of empty container returns to less than 72 hours.
Under Section 6 of Presidential Decree No. 857, PPA has the duty to supervise, control, regulate, construct, maintain, operate and provide facilities or services belonging to the Authority, thus, pursuant to this mandate, TOP-CRMS will provide efficient port services to the public.
Cost Benefit Analysis
Based on the Cost- Benefit Analysis that was required by ARTA to be submitted, Santiago said the TOP-CRMS implementation will be much cheaper than the highest net cost of Container Ledger Account (CLA) executed by Association of International Shipping Lines (AISL) which is currently at negative P472, 038, 745, 198 under the 10 year implementation.
He added that the TOP-CRMS is also wisely economical compared to the second highest net cost of negative P471, 889, 180, 692 from Electronic Tracking of Containerized Cargo (e-TRACC) System of the Bureau of Customs under the 10 year period.
“However, if shipping lines were to remove the imposition of container deposit, it will only have a net cost of negative P200, 803, 512, 082 under the 10-year implementation period,” said Santiago.
“While, if the public still remains under the status quo, or in short, do nothing, they will still experience a 10 year implementation net cost of negative P470, 019, 624, 356,” he added.
In explaining the Cost Benefit Analysis of the TOP-CRMS compared to other system, Santiago said the TOP-CRMS aims to lower logistics cost by replacing the status quo of container deposit that amounts to P10,000- P30,000 with a P250 container deposit insurance and P730 container monitoring fee.
TOP-CRMS, according to him, will also affect empty container handling costs as it will reduce the existing charge from P6,400 to P3,520.
He added that the PPA policy on Container Registry and Monitoring System will ensure that empty containers will be returned without delays as it is more efficient, transparent and less costly.
Santiago said the TOP-CRMS will eradicate the existing other fees under the return routine of every inbound foreign-owned container, such as Pre- Advise that is priced P1,500; Documentation fee that amounts to P1,200; Per lift-on and per lift-off that each cost P1,100; and Three days’ storage that is priced at P1,500.
“Also, it will erase the other surcharges that still happens today which are, Shipping Line Detention fee (per day paid by truckers) that charges P4,000; and Trucker Detention Fee (charged to the importer) that is priced at P15,000,” explained Santiago.
“Unfortunately, if TOP-CRMS will not intervene, the mentioned charges will still remain and continue under the policies of the current system, such as CLA and e-TRACC. Also, if given the fact that shipping lines were to remove the container deposit, the other surcharges will still continue,” he added.
Systematic long-term solution
The TOP-CRMS is part of PPA’s digital transformation initiatives in response to the call of President Ferdinand R. Marcos, Jr. for government agencies to digitize operations in order to make services to the public more efficient, more transparent and less prone to corruption.
Under the current system, the export of empty containers is managed by shipping lines with little or no government regulation.
Empty containers stored at the port terminals are occupying valuable space at the operational area, adversely contributing to port congestion which negatively impacts the quay crane production rate at the ports.
In 2022, empty containers accounted for more than 20 percent of yard utilization at the port terminals with an average dwell time of almost triple of the allowed 72 hours.
Santiago earlier said that the failure of shipping lines and their agents in the Philippines to return container vans on time and in returning container deposits are two of the main reasons why the TOP-CRMS was conceptualized.
He explained that the delay, and sometimes, failure in returning container vans, and the issue of the difficulty in getting back container deposits are decades-long problems that have been repeatedly raised by shippers, importers and custom brokers—complaints that he personally encountered since he first assumed the leadership of the agency in 2016.
Santiago said the TOP-CRMS will keep a registry and monitor all inbound shipping containers that will track every foreign-owned container’s location and movement using the industry- accepted data interchange formats through encrypted channels.
“PPA will continue to fine-tune the program and the implementation of PPA AO No. 04-2021 (TOP-CRMS) and its IOG (Implementing Operational Guidelines), will be constantly monitored and the necessary adjustments to the IOG will be done as necessary,” said Santiago.
“TOP-CRMS seeks to remove the payment of container deposits and to efficiently manage the return of empty containers. In fact, there have been a series of public consultations and we have adjusted based on the need of the stakeholders,” he added.