Palace touts improvement at ports

October 15, 2014 at 13:13

Cabinet Secretary Jose Rene D. Almendras, in a news briefing in Malacañan Palace, attributed the improved port situation mainly to the lifting last Sept. 13 of the extended Manila truck ban, although he said government measures such as opening of 24-hour truck lanes along select main roads and increased use of Batangas and Subic ports also helped.

“The good news here is that things are now improving,” Mr. Almendras told reporters. “We have successfully addressed the congestion since it’s (port utilization) below 100 [%], so technically, you can say it’s not congested.”

Utilization rate at Manila’s two ports was “significantly down,” the Cabinet official said, while noting that the ideal level “is still in the lower 80s” and the government targets to reach that level in “about a month’s time.”

According to Mr. Almendras’ presentation, yard utilization at Manila South Harbor, operated by Asian Terminals, Inc. (ATI), was at 85% as of yesterday, down from 93.28% when the truck ban was lifted last month; while it was at 95.5% from 102% for the International Container Terminal Services, Inc.’s (ICTSI) Manila International Container Terminal (MICT).

“If you remember, we were at 104%, 105%, even 106% at the height of the port congestion. So, we’re happy to show you that since the truck ban was lifted, we can now show that ATI is down to 85% from the 93.2% and the ICTSI down to 95.5% from 102%,” he said.

ATI confirmed the figures, while Christian R. Gonzalez, ICTSI vice-president and Asia Region head, said it was actually already down to 94% as of yesterday.

Utilization rates at Batangas and Subic ports as of Oct. 1, the Cabinet official said, ere at 89% and 42%, respectively.

Despite improvement, Mr. Almendras admitted that the problem with empty containers remained and the government is bracing to address more cargoes expected to arrive starting this month.

“Are we through with the problem? No, we’re not yet through. Why? Because we expect… our peak inflows or imports in October and November,” he said.

“Remember earlier we told you that there were cargoes that were also kept in Shanghai, Kaohsiung, Singapore, and Hong Kong? These are those that were not sent here because of the congestion that’s been happening here. The imports that were supposed to come in, in August and September, but were held back because of the port situation here, have started to arrive and now, we’re actually processing a lot more inflows than historically because we are already addressing the backlog… outside the country,” Mr. Almendras explained.

In the next three to four weeks, he said, the government will “concentrate on making sure that we continue to move as much volume out so that we can reduce the utilization of the port.”

He noted that neighboring ports Hong Kong, Shanghai and Kaohsiung are now also congested.

‘WE HAVE TO MOVE’
“That’s why we have to move. So, we’re watching the volume from October and November. We are going to continue to operate as a task force until we bring down the levels to the 80% level,” Mr. Almendras said.

“Volume out is moving cargoes by trucks… to container yards… utilizing Subic, utilizing Batangas.”

Logistical bottlenecks caused by the congested ports had prompted industry leaders and business groups to press for government action and a time frame for resolving the problem ahead of the holiday peak season.

The government has since implemented various measures to address port congestion, including opening customs and port offices during weekends, extending foreign shipping lines’ operating hours, prioritizing release of shipments with food items and other perishables, leasing a 15-hectare lot at the Philippine International Convention Center to serve as a temporary holding area for empty containers, and implementing 90% discount on direct callers of the Batangas and Subic ports.

Two weeks ago, President Benigno S.C. Aquino III also signed an executive order declaring Batangas and Subic ports as extensions of the Port of Manila, to encourage use of these options.

The government also significantly raised fines on overstaying cargoes to prod faster flow of goods through Manila and other key ports.

CRUCIAL FACTOR
Sought for comment yesterday, ICTSI’s Mr. Gonzales said “the congestion situation is certainly improving.”

“We are seeing very positive signs that it can be solved sooner rather than later,” he said in a text message.

“I also agree that we may have a surge coming in, but this will certainly not mean that we will be cutting shipments,” he said.

“The flow of trucks now is such that any surge in utilization because of a surge in imports can be managed. What is key is that the truck ban was lifted.”

In a separate text, ATI Spokesman Dominador A.T. Bustamante said: “Essentialy the lifting of the truck ban has improved the situation at the port.”

“Since this positive development, yard utilization has eased, production has picked up and truck transactions have increased at the Manila South Harbor,” he said.

“These gains should be sustained to achieve long-term positive results. We are continuously investing on port infrastructure and equipment to cope with furture growth.”

But the group of exporters of electronics products — which make up nearly half of the country’s outbound shipment of goods — was not as optimistic. Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines, Inc., said separately via text: “While the movement of containers has improved, I don’t think the congestion is over.”

‘FAR FROM OVER’
“Manila port is at 95% utilization which is much higher than the ideal 70%,” Mr. Lachica noted.

“There are three factors to consider: accumulated containers at the ports will take about two to three months to decongest; there are containers offloaded in HK, Singapore, Kaohsiung and Shanghai that have to be shipped back to Manila, and the Christmas shipments are around the corner.”

He said the government “should have an agency to regulate the shipping lines; reduce the 150-day maximum stay of empty containers before fees are levied for the overstay period; and that empties should be picked up within 30-40 days.”

European Chamber of Commerce of the Philippines Executive Director Henry J. Schumacher said “port congestion is far from over.”

“We need a ban on all truck bans and need the DoTC (Department of Transportation and Communications) to step back from franchising trucks for hire; we need all available trucks to reduce yard utilization from 100% to 80%,” he said in a text message.

“Additionally, many ports around the world are holding cargo for the Philippines and will ship soon as the situation here is more manageable. In other words, the issue will continue to affect business for quite some time.”

John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, pushed for long-term solutions, saying via text: “Port congestion will not be over until road and rail infrastructure is in place to move containersin and out smoothly.”

MORE STEPS
The Cabinet Cluster on Port Congestion — composed of the heads of the Finance, Socioeconomic Planning, Transportation, Trade and Public Works departments; the Metropolitan Manila Development Authority; Land Transportation Franchising and Regulatory Board; Philippine Ports Authority; and the Bureau of Customs — is also taking more steps to address “persistent” complaints, including a scheme by which truckers are told to pay P500-1,500 to gain entry to the port area.

“Let me explain this. We have a dispatch system in place.If you have a scheduled pick up, you’re supposed to go there. If you have scheduled delivery, you’re supposed to go there. What we’re trying to avoid is trucks queueing outside the ports, waiting that they be allowed to enter,” Mr. Almendras noted.

“The new scheme is that — for between P500 to P1,500 — you’ll be allowed to entry even without a schedule.”

He said the government has also put a bulletin system in place showing shipping line space allocations, with color coded indicators to show status of specific areas. “If it’s red, allocation for that particular shipping line is already full for that day or for that period.” Mr. Almendras explained. “If it’s yellow, there are still 10-20 slots. It it’s green, it means they could still get accommodated inside.”

Mr. Almendras said the Trade department will be meeting with representatives of shipping lines and importers to discuss and clarify the new port procedures.