High fees, poor infrastructure hamper local shippers

By Chito Junia

THE HIGH cost of doing business at the country's domestic ports, poor infrastructure, high cost of fuel and drydocking are the local shipping industry’s biggest setbacks.

Industry stakeholders however say there is still room for improvement, if only real reforms will be introduced particularly in the country's various domestic ports.


Part of the Problem

According to Philippine Interisland Shipping Association (PISA) Executive Director Pedro “Peter” Aguilar, the government is part of the local shipping industry's problem. 

“They (government officials) keep on complaining about the high domestic shipping cost and yet they keep on increasing the regulatory fees.” Aguilar said.

“The government increased the fees by 25 % last year and they are again planning to implement another round of increase” he added.

The country's port operations, particularly the domestic ports, are monitored and regulated by the Philippine Ports Authority (PPA).

Local shippers also feel neglected by the government for its not being granted tax free privileges for its fuel oil consumption, raising the cost of doing business at the ports among other concerns. 


Not on the Radar

“We're not on the radar of the Duterte administration yet. We wrote the Philippine Coast Guard (PCG) about our problem with piracy in some areas in the Visayas and Mindanao and asked the PCG to increase its sea patrols, especially in the seas between Basilan and Zamboanga” he continued. 

“And although the PCG promised to increase its patrols in the area, we have yet to see PCG's complete steps to address this concern.” Aguilar lamented, even as he also added that consistency of government regulatory functions is also a concern for local shippers.

According to Aguilar, the lack of facilities at domestic ports is also a major problem in the local shipping industry. There are not enough cranes at domestic ports and there are ports that can only accommodate a few vessels. 

“There are ports where domestic ships will have to wait for days before it can dock because a foreign vessel is docked at the pier.” Aguilar said, adding that “This is an added cost to local shipping companies.”.


Manila North Harbor (MNH)

At the Manila North Harbor (MNH), the country's premier domestic port where its number of ship calls each day is bigger than the number of ship calls at the country's two premier international ports, the Manila International Container Port (MITCP) and the Port of Manila (POM) combined, the cost of doing business has also risen. 

The volume of container vans handled by NMH is also bigger than the combined volume of both the POM and MICP  

According to Aguilar, the Manila North Harbour Port, Inc. (MNHPI), the private port cargo handling operator of the country's premier domestic port, was granted an increase of 17% for its services by the PPA in 2015. 

And last year the MNHPI requested for another 34% increase. This request is still pending. According to Aguilar, these are outside the other increases allegedly imposed earlier by the MNHPI, even without PPA approval.


International Cargo

The passage of the Co-Loading Act, the law that will allow foreign vessels to dock at domestic ports will now open the Manila North harbor to foreign vessels. 

But local shippers are opposing the new port policy saying the Manila North Harbor is dedicated for domestic shipping.

“Why should the government allow foreign vessels’ use of the Manila North Harbor, when records will show that the Manila North Harbor already gets more ship calls than both the Port of Manila and the Manila International Container Port combined?”  Aguilar asked.

Local shippers also lament the fees being charged by NMHPI saying that the private port operator practically wants to charge port users for almost everything. 

According to Aguilar, the MNHPI even wants to charge port users for the cost of lighting the port.

“Their (MNHPI) cost of power is very high partly because of its inefficiency.” Aguilar said, adding that, “Fortunately the PPA did not act on their request. But sooner or later, if they (MNHPI) insist on this increase, we will strongly oppose it.”

Local shippers believe that being an archipelago, domestic shipping will still play a key role in the nation's economic development, even with a nation connected by bridges. 

The local shipping industry currently moves about 80% of the country's cargo from Luzon, Visayas and Mindanao. 

And should the Duterte administration considers their plight, the local shipping industry could be looking at a brighter future after all.


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Tuesday, 19 February 2019
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