Better ports for growth

2

Last of two parts

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The Ports Summit this past Monday has drawn up an action plan, with key recommendations to be announced in full-page ads tomorrow. The full summit report will be given to the Cabinet Cluster under Cabinet Secretary Jose Rene Almendras for consideration in its own conference on November 27 at the Diamond Hotel. Here are The Ports Summit’s most urgent recommendations:

Recommendation: Make the present 24/7 truck routes permanent, and institute consultation mechanisms for future regulations. This will help avoid a repeat of the truck ban which led to port congestion. The all-day routes include special lanes for haulers in major thoroughfares. On consultations, the Metro Manila Development Authority should persuade its 16 cities and one municipality to consult affected sectors before instituting measures like the truck ban.

Recommendation: Designate 24/7 truck lanes to eastern Metro Manila, for cargo going to the Marikina and Antipolo area. Right now, truck routes go north and south, but a lot of cargo also goes east of the ports. This destination also needs 24/7 lanes.

Recommendation: Grant a one-year moratorium on the required franchising of cargo trucks, which are now in short supply. Many truckers had to sell vehicles for lack of drivers, who quit amid extended work shifts lasting 14-48 hours. Cargo flow would again slow to a crawl if many haulers are idled for lack of franchise.

Recommendation: Revise Customs procedures for cargo alerts and seizures, which cause container delays and abandonment. As recounted in the first part of this article, these actions by the Bureau of Customs (BoC) can impound containers for weeks or even months. Perishable or seasonal cargo held up that long, could be rendered worthless. Then importers just abandon them, rather than paying hefty tax, storage and other charges.

Recommendation: Streamline Customs accreditation for companies to avoid delisting legitimate importers. This recommendation has to do with requiring certification from the Bureau of Internal Revenue for importers and brokers to be accredited by the BoC. This has greatly lengthened and complicated accreditation. The BIR must thoroughly investigate the thousands of firms being accredited, since its certificates could be used to contest future findings of tax deficiency.

Yet the BIR certificate requirement doesn’t stop smugglers. They routinely set up companies once old ones get blacklisted. And since new firms don’t have tax filings yet, they are not required to submit BIR certificates for Customs accreditation. Thus, longstanding legitimate importers and brokers go through the wringer before getting accredited, but new firms set up by smugglers do not.

Recommendation: Upgrade and enhance Customs equipment and facilities for greater efficiency and transparency. This may sound like a no-brainer motherhood recommendation, but it’s not as straightforward as one might think. Money isn’t the problem, since budget beancounters usually oblige revenue agencies enhancing capabilities, since that increases the tax take.

A bigger issue may be the reluctance of some Customs units or personnel to make document processing faster, with greater transparency and less human intervention. Especially if new machines and office facilities might lessen the take from importers and brokers keen to grease papers through the present snail-paced process.

Recommendation: Weekend container x-ray, shipping lines reprsentatives, and warehouse opening for more weekend cargo withdrawals. In his summit keynote speech, Transportation and Communication Secretary Jose Emilio Abaya urged companies to pick up and deliver more containers on low-traffic weekends. For that to happen, however, some essential processes must be manned and moving all weekend.

Customs people must operate container x-ray machines Saturday and Sunday. Some shipping lines representatives need to report for work; so do staff at warehouses where weekend cargo would go. And truckers must persuade overworked drivers to give up family time to drive metal boxes on their day of rest.

Recommendation: Rationalize fees imposed by shipping lines, which should include all charges with cargo arrival notices.

There were many complaints over fees imposed by local agents of international shipping lines, including cash deposits amounting thousands of dollars per container, which often take 2-3 weeks to refund after containers are returned. The summit further urged the designation or creation of an agency to regulate international cargo carriers just as the Civil Aviation Authority of the Philippines oversees airlines. Right now, shipping lines can do as they please with no government oversight.

Recommendation: Accelerate the removal of empty or abandoned containers from the ports. This action requires several measures. On abandoned cargo, the Bureau of Customs needs to speed up procedures for declaring it abandoned and disposing of it. For empties, shipping lines must accelerate their removal by ship, or provide ample container yards outside the ports for returned boxes. It’s hoped that ICTSI’s revived container yard in Cabuyao, Laguna, could also take empties carried there by train.

Recommendation: Expedite decision on proposed NLEX-SLEX elevated expressway with connection to Port Area. The long-term solution to congestion as well as traffic is the proposed elevated expressway connecting the NLEX and SLEX expressways going north and south of Metro Manila. The government should expedite action on projects put forward by Metro Pacific and San Miguel.

The eventual project should include an elevated connection to the ports. This would greatly alleviate traffic and ensure that future growth in trade would flow efficiently between the ports and Luzon’s industrial and commercial areas.

The Ports Summit proposed about 80 action recommendations in all, covering such issues as cargo terminal operations, customs procedures, traffic management, shipping lines, and ports development. Over to you, Secretary Almendras.

(Former Cabinet Secretary Ric Saludo heads the Center for Strategy, Enterprise & Intelligence (CenSEI), conference planning consultant for The Ports Summit.)

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2 Comments

  1. If the only the government gets its priorities right. The IMF already said that smuggling since BS came into power has risen to more than $20 Billion a year. You don’t have to be a mathematician to imagine the size of the tsunami of containers that will swamp the ports with imports of that magnitude. Thats the reason for the congestion and its concomitant problems. The decades-old suggestion that the local customs be stripped of the power to establish the taxes payable on a shipment and give this instead to the Philippine consular office in the exporting country based on that country’s export documents will drastically cut down this deluge currently overwhelming our ports, but we know why this brilliant idea will never be adopted.. But if it were, there will be no need to spend all this attention and resources on a problem that is caused primarily by the country’s dollar users, many of whom are smugglers. We should help instead the dollar earning OFWs, the single biggest reason the economy is still afloat in spite of our corrupt leaders. The money to be used in unnecessary port improvements can be used improve the airports as thats what the dollar earners use, everyday. That this BS prefers to please the corrupt dollar users instead of the dollar earners shows us who his real boss is, and its not Juan dela Cruz.

  2. Many thanks po, Sir Ricardo Saludo.
    Truly without the kind of efficient PORT SYSTEM that you describe and will come to existence in our country once the recommendations of the Ports Summit you have listed, we will never be able to rise above Singapore, Malaysia, Indonesia and Thailand when Asean Economic Integration starts to beome a reality starting 2016.