Port congestion forcing buyers to source from PH competitors-A A +A
Sunday, July 27, 2014
THE congestion and shipment delays at the Manila ports are making Philippine exports highly uncompetitive, as most ports do not have to contend with a similar cause, like a truck ban policy, according to two prominent leaders of the business community.
Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation, Inc. (PhilExport), said congestion at the Manila terminals has reached “110% of capacity” and warned that the situation could go from bad to worse unless “some real remedies” are applied.
There’s a real problem now as shipments can’t be loaded or unloaded, he added.
Robert Amores, president of the Philippine Food Processors and Exporters Organization (PhilFoodex) and PhilExport Trustee for the Food Sector, explained that shipments should normally be cleared out within 72 hours. But with the congestion, clearance sometimes takes “15 to 30 days,” he added.
The ports of Hong Kong or Busan in South Korea also experience traffic jams, but they can address their problem because there is “no truck ban to compound” the overcrowding issue, so “they can cope,” said Amores.
Both Ortiz-Luis and Amores were invited on the public affairs program Biz News on July 14 to air the business sector’s perspectives and suggestions on the congestion problem at the Manila ports.
Amores said food exporters are losing business because what buyers are doing now is to accept what local exporters can ship out, then fill the rest of their orders by importing from other sources, such as Thailand.
The food industry is “suffering,” he stressed. Manufacturers of fresh produce, for example, can’t fully commit to ship out 100% of the orders due to spoilage from the long wait.
Moreover, many are forced to use the costlier air transport system to meet deadlines, further increasing their expenses.
And, unfortunately, they can’t raise their export prices because other countries are not experiencing the situation they are in.
As a result, said Amores, many food makers have reduced their output, leading to lower production levels, adoption of the rotation system, and other similar measures, affecting the “total supply chain.”
Ortiz-Luis shared that he recently learned from the leaders of the semiconductor industry that a few firms plan to go on a temporary production shutdown because of the long wait for raw materials.
He criticized the seeming lack of coordination among government agencies that aggravates the situation, such as the construction of the skyway and the ill-timed implementation of the anti-colorum drive in the middle of the truck ban debacle.
Though there are Cabinet cluster meetings involving the different departments, the agencies seem to be “doing their own thing,” said Ortiz-Luis. He lamented how the opening of the Roxas Boulevard trucking lane took months to do. Then just when it was finally done and traffic was easing up, the anti-colorum campaign came up. “Walang katapusan,” he said.
Amores said that only the truckers have benefitted from the truck ban policy and the anti-colorum drive. This is because they have managed to raise their rates significantly, citing the long turnaround due to the truck ban.
Meanwhile the anti-colorum campaign effectively reduced the number of trucks on the road because as much as 40 percent of truckers have no franchise, causing a shortage of haulers.
Ortiz-Luis called on the administration to heed the call of the business community, and urged the agencies to “orchestrate” their moves in addressing the Manila truck ban and port gridlock. This, he emphasized, is “a national problem, not just a departmental problem, and must be treated as such.” (Philexport)
Published in the Sun.Star Cagayan de Oro newspaper on July 28, 2014.