Amid the looming increase in cargo handling tariff next month, a study conducted by an international advisory services company revealed that the customs duties and maritime transportation costs are significantly driving up logistics expenses for imported and domestic containers in the Philippines.
In the paper published in April titled “Analysis of Logistics Costs for Imported and Domestic Containers in the Philippines”, Bluefocus Infrastructure Advisors’ Pablo Corralo Llorente explained that the fees for Customs clearance processes contribute to 35 percent to 60 percent of the total cost, followed by maritime transportation, which includes shipping line freight rates and surcharges at 20 percent to 40 percent.
“In both international and domestic logistics, port and terminal charges comprise the smallest portion of the total logistics cost, while the highest cost is represented by customs clearance and maritime transportation expenses,” said Llorente.
“Maritime transportation is costlier in the Philippines than in neighboring countries in Southeast Asia, with destination charges playing a larger role,” he added.
Meanwhile, Llorente said inland logistics represent 10 percent to 25 percent of the total logistic costs due to trucking and warehousing charges.
Lastly, port and terminal charges at destination contribute only five percent to 10 percent, mostly due to terminal handling rates.
“All in all, the average logistics cost for an imported container in the Philippines is USD 5,300 or around P 311,372, representing a little over 10 percent of the stock value,” the paper read.
“The same trend is seen in domestic logistics with maritime transportation and inland logistics costs at 45 percent to 50 percent, and port and terminal charges at only six to eight percent,” it added.
Llorente said food-related products, such as processed goods and agricultural produce, make up the largest share (40 percent) of outbound containers from Manila.
Other significant commodities include clothing and textiles, construction materials, and healthcare supplies, the study showed.
Llorente disclosed that the study was commissioned by a large overseas manufacturer planning to invest in a high-volume production factory in the Philippines, noting that the cost and efficiency of container logistics operations were crucial for the investment decision.