PH loses $2B-$5B in shipping surcharges: study

Government is losing billions of dollars each year from the surcharges imposed by some shipping lines on Filipino import-ers and exporters, according to a joint report on the cost of inter- national shipping presented to the Lower House recently.

The report, “Potentially Avoidable International Shipping Cost and Other Charges,” said the state is losing from US$2 billion to $5 billion (P101.6 billion to P253.9 billion) annually due to various shipping charges local shippers have to pay international shipping lines.

In addition to freight, which the study said is “a valid expense,” Filipino shippers are also required to pay other charges that include the terminal handling cost, container imbalance charge, emergency cost recovery surcharge, contain-er deposit fees, container cleaning fees, container detention and demurrage charges, docs fees, online release fee, foreign currency adjustment, and bunker price adjustment.

“A quick analysis of the impact indicates that, on the low side, these surcharges (economic burden) are estimated to cost the economy roughly $2 billion annually (to a high of $5 billion) annually,” said the report jointly undertaken by the National Competitiveness Council-Transport, Infrastructure, and Trade Logistics Committee and the Export Development Council Networking Committee on Transport and Logistics last year.

Highlights of the report were presented during a Lower House public hearing conducted by transportation committee last Jan. 17, 2018 that tackled high shipping charges.

The study stressed, however, that not all international shipping lines levy all of these surcharges.

The document, based on a series of forums and a survey conducted last year, disclosed that for imports, freight on the average accounts for only 39 percent of the total amount paid to international shipping lines, while the so-called “destination charges” levied on Philippine importers by the carriers account for 61 percent.

For exports, freight on the average accounts for only 25 percent of the total amount paid to international shipping lines while the so-called “origin charges” levied on Philip-pine exporters by the carriers account for 75 percent, con-tinued the report.

The impact of these costs can be felt five ways, the study added.

These include undermining the country’s export competitiveness by increasing the cost of importing raw materials and intermediate goods and making Filipino consumers pay a higher price for imported products (for final consumption) since added import costs are passed on.

“It may be argued that these charges are not only excessive but undefined as to their nature of freight, recoverable actual cost or penalties,” said the report.