Export, logistics players nix 15% port tariff hike
EXPORT industry stakeholders have asked the Philippine Ports Authority (PPA) to postpone the proposed increase in cargo handling tariff and passenger terminal fee by a port in Manila.
The Export Development Council (EDC) and the Supply Chain Management Association of the Philippines (SCMAP) appealed the 15.33-percent tariff increase proposal by Manila North Harbour Port Inc. (MNHPI) as this is seen to further burden the already ailing economy.
“We strongly recommend the postponement of the proposed rate increases of MNHPI to give ample time for struggling business to recovery from the pandemic-inflicted losses,” the parties said in a position paper recently sent to PPA Port Manager Annie Lee Manese, a copy of which was obtained by the Businessmirror.
The EDC and SCMAP noted that the “untimely proposal” will take a toll on the micro, small and medium enterprises (MSMES), whose operations—for most cases—are either temporarily closed or scaled down amid the lockdown protocols.
“Reports showed that exporters, primarily the MSMES, are still experiencing difficulties getting back to normal business operations,” the joint paper read.
The export industry stakeholders pointed out that the pandemic has forced logistics service to be more expensive amid mobility restrictions, limitations in personnel and other related capacity concerns. “The new policy of MNHPI forcing ships calling at the port to use their quay cranes—therefore subjecting shippers, and ultimately business, to cranage fee—also was an additional burden, one that did not go through consultation with affected stakeholders,” they added.
Ultimately, the EDC and SCMAP stressed, the increased cost will be passed on to consumers, which means slower economic recovery. They noted that higher costs will derail the rebound in consumption and consumer confidence.
Citing MNHPI’S statement, the signatories of the position paper said the proposed tariff increase was aimed at meeting the port’s development plans.
The parties, with this, sought a copy of the port’s financial statements to review if the proposed increase—which is also deemed essential for cost recovery—is justified.
“We understand that the port operators were not spared from the impact of the pandemic. However, logistics costs must not cause more burden for importers, exporters, and consumers,” the export industry representatives said.
Letter to Congress
LAST month, EDC and SCMAP, along with the Philippine Exporters Confederation Inc. and Philippine Chamber of Commerce and Industry, sent a letter to the House of Representatives’ Committee on Transportation requesting the implementation of standardized shipping fees.
The stakeholders stressed that shipping charges based on International Commercial Terminology—a globally-accepted standard for international trade—will allow businesses to have better cost management. As such, shipping lines can also be more competitive as it levels the playing field in terms of pricing, they added.
Following a standardized shipping fee scheme will help relevant authorities better assess petitions for increase in rates, they said. The exporters explained then that price increases will be based on quantitative pricing mechanisms instead of a unilateral move by a company as a cost recovery measure.
The industry groups blamed the high logistics fee on lack of regulatory oversight, as no agency monitors local charges imposed by international shipping lines.
In response, the Department of Trade and Industry submitted a draft of the Philippine Shippers Act of 2021 to Congress in May. The proposed measure seeks to grant the Maritime Industry Authority power to oversee the freight charges—which industry players complained to be higher amid the pandemic— being imposed by the logistics service providers.