Mindanao shipping costs to drop with new RoRo policy

April 20, 2016 at 16:00

DAVAO CITY — Shipping costs in Mindanao are expected to fall significantly with the inclusion into a government incentive scheme of container chassis roll-on, roll-off (Cha-Ro) systems, which permit containers to be shipped with their own trucks and chassis, the Mindanao Development Authority (MinDA) said.

EO 204-2016 expands the definition of Ro-Ro operations to include:

“a. 1 Self-powered (such as cars, trucks, containers on chassis attached to a prime mover, buses, motorcycles) and/or

a. 2 Containers on chassis loaded unto the Ro-Ro ship by prime mover (or tractor head) at the port of origin and unloaded from the Ro-Ro by a different prime mover (tractor head) at the port of destination.”

“We welcome this development and consider this as a huge feat among Mindanao’s business players who have been seeking this amendment,” said Secretary Luwalhati R. Antonino, MinDA chair, in a statement released over the weekend.

Ms. Antonino said based on the assessment of her office, cargo shippers can reduce their handling cost by as much as 78% with cargo handling being reduced to a minimum with the prime mover going directly into the ship and placed in the cargo hold.

Wharfage fees can also be eliminated as the prime mover goes straight into the ship and does not need to be stationed for long at the wharf.

Based on MinDA estimates, the inclusion of Cha-Ro in the policy allows operators to spend only P516 per twenty-foot equivalent unit of container from a high of P1,161 for shipping between Cagayan de Oro City and Manila.

“We strongly advocated for this amendment especially that Char-Ro is one of the widely adopted shipping services among the major ports in Mindanao,” Ms. Antonino said.

In 2014, the total volume of cargo using the Cha-Ro in the ports of Zamboanga, Cagayan de Oro, Nasipit, Davao, and General Santos was 3.74 million metric tons, which was 88% of the total cargo volume of Mindanao.

The amendment will also help Mindanao improve its sea linkages with the rest of the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) as well the rest of the member nations of the Association of Southeast Asian Nations (ASEAN).

The EO applies to both domestic and international RoRo operations.

“Now that Cha-Ro is enjoying similar incentives with the regular RoRo, we can expect the transport costs to be further cut down and for trading activities to increase in Mindanao and its counterparts in the BIMP-EAGA sub-region,” the MinDA official said.

She added, “The inclusion of Cha-Ro as RoRo service also supports the ASEAN Masterplan on Connectivity and promotes the development objectives of Mindanao as it will maximize the economic impact of maritime transport in the country and our connectivity with the neighboring economies.”