First of two parts
The family of six driving north from Manila weeks ago didn’t know much about the city’s truck ban or the resulting mammoth cargo pileup at its container terminals. Nor did they think the port congestion would lead to an accident that would kill them, except an infant protected by her grandmother’s body, when an untrained driver lost control of a trailer truck, and its massive shipping container fell on their family van.
Despite nil skill, the trailer driver took the wheel because the regular one quit due to extended working stints. The truck ban made drivers wait so long before driving to or from ports, turning their 8-hour workdays into shifts of 14-48 hours.
Many quit, and trucking firms had to scramble for new drivers, including a cargo hand who had only maneuvered trucks at the depot a few times. On the road he broke the trailer rule never to overtake a moving vehicle, and the family in the van paid for it.
That tragic accident was one among many distressing results of Manila’s truck ban and port congestion. More widely reported consequences are escalating prices and tight supplies of imported goods, disrupted factories and idled workers due to lacking raw materials, and exporters losing money and orders for late shipments.
This two-part article covers leading causes of the problem, of which hauler restrictions are but one. It will also report key recommendations under discussion in ports forums on November 17 and 27. Those of us who care about jobs, prices, profits, investment, growth, and competitiveness should pay attention and, if we can, support speedy action.
Here’s how bad things got. Congestion imposed a debilitating drag not only on growth and profits, but also on competitiveness and investor confidence. It’s one reason why the country’s most recent competitiveness rating dropped. August exports too fell, by a hefty 10.5 percent. One company was $3 million in the red after shipping goods by air to meet deadlines, while three apparel firms lost $6 million in orders, according to the Export Development Council.
In July, the Philippine Chamber of Commerce and Industry warned that the cargo crunch would make it hard for 2014 economic growth to match last year’s 7.2 percent rise. And in both July and August, inflation hit 4.9 percent, the highest in nearly three years. The price surge began in April, the month after Manila Mayor Joseph Estrada reduced the hours when trucks could ply city streets in a bid to ease traffic.
The national government finally took action in September, belatedly ending hauler restrictions and shifting tens of thousands of containers from the city’s overcrowded terminals to Subic and Batangas ports. Cabinet Secretary Jose Rene Almendras, head of the Cabinet cluster on ports, recently said congestion had eased. But he admitted that things would normalize only in January. That’s when shipments drop sharply after the crush of Christmas cargo.
Public-private dialogue for effective action
Thankfully, government and business are putting their heads and hands together to devise and roll out lasting solutions to end the present squeeze and prevent its repeat. This public-private partnership for ports includes two high-powered forums, one held yesterday at the Manila Hotel, and another on Thursday next week, called by the Cabinet cluster under Almendras.
Yesterday’s The Ports Summit, attended by some 200 mostly business people, was convened by the Port Users Confederation (PUC), which groups sectors using or providing port services, with advice and planning support from think tank Center for Strategy, Enterprise and Intelligence (CenSEI), headed by this writer.
Sponsoring the summit were the country’s leading port operators, International Container Terminal Services, Inc. (ICTSI) and Asian Terminals, Inc. (ATI). Attending yesterday were PUC member associations representing major industries including manufacturing and retailing, other importing or exporting sectors, customs brokers, trucking firms, shipping lines, port operators, and other stakeholders. Also invited were major business chambers, including PCCI and leading foreign associations.
More than just the truck ban
Many think the truck ban was the only problem: not so. Another was personnel and procedural changes at the Bureau of Customs. In fighting contraband, BoC Commissioner John Sevilla and his boss Finance Secretary Cesar Purisima idled dozens of longtime customs people, and replaced them with new ones, most with little or no knowledge of the bureau’s complex laws, rules and processes.
Result: the new team, unsure about what’s allowed and what’s not, raised alerts far more frequently than before, holding up countless containers, as many as 100 or more at a time, for rigorous inspection. Clearing the cargo for release took weeks or even months, with the process going up to Commissioner Sevilla himself.
Even perishable and seasonal items were covered, and many got rotten or out of season long before release. For such shipments, it made sense for importers to just abandon them, since their value was nil or not enough to cover the huge storage and other port charges piled up.
Though unbanned, truckers now lack men and machines. Many drivers had resigned, as noted earlier, and operators unable to find replacements often sold unmanned haulers. Many more may be taken out of service if authorities goes ahead with plans to phase out vehicles older than 15 years—which comprise the bulk of fleets.
More problems on Thursday —and what to do about them. Stay tuned.