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PhilExport urged government to resolve port congestion

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Despite the peak season where port congestion occurs during Christmas season is over, the exporters are still in quagmire as empty containers in the ports continue to pile up unabated that inevitably affect the operations due to  delivery problems on both imports and exports and consequently would result to financial losses to the companies affected.

The Philippine Exporters Confederation Inc. (Phil-Export) asked the government to act with urgency and refrain from denying there is port congestion going one. Instead, they want to government to deal the issue directly by coming up with both short term and long term solutions to the perennial problem of both exporters and importers of the country.

Phil-Export President Sergio Ortiz-Luis Jr. lamented the apparent denial of the government on the said problem.

“The government must first acknowledge that there is a problem. If they continue to deny this, they would never be able to come up with the right solution to the issue. For so many years, this has been a problem, but nothing has changed. They ought to solve this problem first in terms of short term and later on with institutionalized long-term measures. The government should accept that this is a real problem that is causing very serious cash flow and delivery problems to the micro, small and medium enterprises, especially exporters,” Ortiz-Luis said.

Even Designs Ligna President Nicolaas de Lange said this issue is badly affecting his company’s production and cash flow.

“We have been experiencing delays of an average of two weeks on our imports. For us MSME-exporters who rely on imported raw materials, it heavily affects our schedule and cash flow,” de Lange said.

The Philippine Business and News sought the comment of MITA (Meat Importers and Traders Association) President Jesus Cham, another industry affected by the port congestion on how the government can address the problem, and he made very good suggestions.

According to Cham, there are three important issues that the government needs to address and these are the “container imbalance”, high cost of shipping companies which is around 3-4 times compared with ASEAN counterparts and “risk based procedures” to be implemented by the Bureau Of Customs.

“The importers have been paying the shipping lines in their built in cost on empty containers. This is around 3-4 times more than what is being paid for by other ASEAN countries. I think it would be best if the government particularly the Department of Trade Industry should start benchmarking from the ASEAN Peers. There’s overcharging from the shipping companies because the empty containers are not being shipped back and there is demurrage (detention fee). Therefore, the turnaround time of the truck is greatly affected”, Cham said.

In closing Cham said, “As long as the government does not come with a long term solution, the same problem will occur all over again. There is a problem, they must address it head on not avoid it.”

Meanwhile, exporters remained very disappointed as the government continue to deny that port congestion is real,  despite the fact that there have been meetings before at the Export Development Council that include truckers and container yard operators confirmed the problem in port congestion.

The truckers and container yard operators explained the need for the shipping lines to build their own yards to park these empty containers. On short term, these shipping lines must also send sweepers to remove these empty containers to decongest the ports and container yards and maximize its capacity.But the shipping lines apparently have not done any move yet probably due to the high cost it will incur. But De Lange lamented that MSMEs have to bear all these charges imputed by shipping lines which is roughly around $275 for container imbalance fees, and said “this should be enough for them to move their empty containers out.”

The container imbalance fees are charged for relocating large numbers of empty containers between countries where there is trade imbalance.

Phil-Export reported that they are closely coordinating with the government, particularly the Department of Trade and Industry, Bureau of Customs, Philippine Ports Authority, Association of International Shipping Lines, Philippine Chamber of Commerce and Industry and container yard operators and hopefully come up with a long term solution not just a band aid solution which has always been the case in the past years.

Read related stories:

DTI, BOC assure no port congestion in Manila

“Day of Rest” for truckers, brokers to trigger price increase

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