Mindanao-No. Sulawesi sea route to open this month

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Friday, May 2, 2014

TRADE and economic ties between Mindanao and Indonesia expect to get further boost with the opening of the Davao-General Santos-Tahuna-Bitung sea route this month that will operationalize shipping services between Mindanao and North Sulawesi.

An agreement to operationalize the shipping service was sealed in Jakarta on April 11 by the representatives of the Indonesian shipping line PT Kanaka, the North Minahasa Chamber of Commerce of Indonesia, Philippine-based cargo company ARREE Freight Express and the Davao City Chamber of Commerce.

The sea route has expanded to include Tahuna, a fishing and trading center in Sangir Talaud group of islands in the province of North Sulawesi, situated in between Bitung and General Santos City.


In the agreement, PT Kanaka will provide shipping services to the route with its conventional cargo-type vessel with a 120 TEU capacity. ARREE Freight Express on the other hand will handle the cargo consolidation requirements for the shipping route.

“We have always looked into this route as one of the cheapest and fastest ways to transport goods from Mindanao to Indonesia, and vice versa,” said Dr. Malou Monteverde, former president of Davao City Chamber of Commerce and Industry and one of the primary proponents of the sea route.

The shipping service is also seen to significantly increase trade and economic relations not just between the two countries, but in the entire Brunei Darussalam Indonesia Malaysia the Philippines East Asean Growth Area (BIMP-Eaga).

Monteverde added that the vessel is initially expected to ply the route twice a month.

Among the products eyed by Mindanao traders to export to Indonesia through the new shipping service are canned beverage, fresh and dried tropical fruits, processed coconut, corn feeds, construction supplies, meat, poultry, and fish products.

Currently, sea links that connect Mindanao to Indonesia have to pass through Manila and Jakarta before reaching the provinces of North Sulawesi.

Monteverde said that the new link will allow the direct exchange of goods between Mindanao and Indonesia through a less costly and more proximate route.

Prior to the commencement of this route, consumer items for East Indonesia are usually sourced from Jakarta, almost a thousand nautical miles from North Sulawesi. The direct sea route is estimated to span only 350-nautical miles. Tahuna was added to the route due to the area’s strategic location and its significant contribution to trading activities.

“We commend the continuous efforts of the private sector in making this route possible, which will significantly cut shipping costs and thereby allow our small and medium entrepreneurs to engage in international trading between these two points in the BIMP-EAGA,” said Luwalhati Antonino, chair of the Mindanao Development Authority (MinDA) and Philippine signing minister for BIMP-Eaga.

Antonino added that the private sector-led sea route is identified as a priority route under the masterplan on ASEAN connectivity, and is seen to strongly contribute to efforts towards Asean integration.

Currently, shipping companies that provide services to areas covered by BIMP-Eaga are given 50 percent discount on port and dockages fees as part of the incentives for serving within the sub-region.

Published in the Sun.Star Davao newspaper on May 02, 2014.


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