Port congestion likely to persist – Drewry research


(Reposting for technical reasons)

Congestion at the Port of Manila may be a persistent side effect of a growing regional economy despite efforts by the government and port operators to relieve it, a report by a shipping industry journal said.

An analysis of a report by Drewry Maritime Research published in this week’s shipping industry trade public Journal of Commerce identified a number of ports worldwide that are currently experiencing congestion problems, including the Port of Manila and other key Asian ports such as Shanghai and Qingdao, China, Incheon, South Korea, Hong Kong, and Cat Lai (Ho Chi Minh City), Vietnam.

“While some congestion is caused by short-term issues,” such as local trucking restrictions, labor disputes, or adverse weather conditions, “certain world regions may be at greater risk of persistent congestion in the longer term,” the report said.

Southeast Asia, including the Philippines, is identified as one of those regions at risk of continuing port congestion, with growth in terminal utilization rates forecast to be 7 to 10 percent annually between 2013 and 2018.

The report noted that apart from the potential for short-term issues, the expected increase in trade volume from an improving world economy and the implementation of new trade regimes such as the Asean integration scheduled to take effect next year, as well as the increasing number of very large container ships calling at regional parts is likely to cause port congestion unless ports are expanded rapidly.

“Short-term port congestion will always be evident in certain places, but in the longer term, several world regions will need to be watched carefully as their susceptibility to congestion appears likely to increase markedly over the next five years,” the report concluded.

That news may dampen the optimism expressed by Cabinet Secretary Jose Rene Almendras, head of the Cabinet Cluster on Port Congestion (CCPC) when he announced on Wednesday that progress was being made in clearing Manila’s two main terminals.

Almendras’ assessment came as the CCPC imposed a new storage fee on shipping containers remaining in the Manila International Container Terminal (MICT) and Manila South Harbor, which came two weeks after the City of Manila lifted its truck ban.

Starting October 2, the Cabinet Cluster is imposing higher storage fee for Customs-cleared ready-to-go containers to discourage cargo-owners from using the terminals as their virtual warehouses, from the current P500 per TEU per day after the 5-day free storage period to P5,000 after a 10-day free storage period. This should further help relieve the ports’ congestion, which has already been significantly reduced, according to the Cabinet Secretary.

“We have already posted a 25-percent to 30-percent increase in the movement of cargoes to and from the port since September 13,” Almendras said. “The port operators are now working full-blast in their bid to reach the target yard utilization level in time for the expected influx of boxes brought about by the run-up to Christmas.”

The CCPC is targeting an 80-percent yard utilization level, or approximately 64,800 TEUs (20-foot equivalent units) inside the ports in order to provide enough room for optimum terminal efficiency and productivity.

“With the imposition of the higher storage fee starting Oct. 2, we expect to see further reduction of the volume of containers currently inside the two Manila ports,” Almendras said.

“More shipping lines are also now using the port of Subic and Batangas after being declared as extensions of Manila, which we expect to facilitate the decongestion of the Manila ports,” he added.

Currently, the two port operators are stepping up efforts to relocate Customs-cleared containers to Subic, Batangas and Cabuyao in Laguna after being slowed down by the twin tropical storms that affected the Metro on two consecutive weekends in September.

“We continue to appeal to the public to remain considerate as we are already going full-blast in our efforts to decongest the ports. We guarantee that the benefits after decongesting our ports will outweigh all the inconveniences they encounter if we have a congested port,” Almendras said.


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