• A revealing port call

    Ben D. Kritz

    Ben D. Kritz

    On Monday, I was invited to visit the Manila International Container Terminal (MICT) by its general manager, Christian R. Gonzalez, who is also the vice president of operations and Asian regional director for the terminal’s parent company, International Container Terminal Services Inc. (ICTSI). As we sat and talked in the administration building’s dining room, which overlooks the main truck entrance to the terminal, I was struck by something very odd:

    There were no trucks.

    At ten o’clock on a Monday morning after a holiday weekend, at a major seaport that directly serves a population of close to 30 million people, no trucks were arriving to pick up any of the thousands upon thousands of shipping containers stacked as high as they safely can be in every available space in the terminal.

    It was not that trucks weren’t available; in a holding area near the entrance gate, I counted about 40 units—trucks, empty trailers, and drivers—idly standing by, waiting for someone to call for their services. And it wasn’t that they had all arrived earlier and I had simply missed them; during our tour of the vast facility, the largest part of which is dedicated to container storage, I counted exactly seven trucks in various stages of the process of retrieving goods to deliver. Seven.

    Obviously, something is very wrong here. The local business community, individually and through the various chambers of commerce, having been howling for months about how port congestion is hurting their operations and the economy as a whole by keeping them from being able to retrieve their shipments, seem to be exerting very little effort—on some days, like this past Saturday, no trucks at all arrived for pick-ups—to help solve the problem.

    It is certainly not the fault of the port itself. Without prejudice to the smaller, but similarly well-equipped and well-managed South Harbor terminal of Asian Terminals Inc. (who Mr. Gonzalez affectionately refers to as “our neighbors”), the MICT is a legitimately world-class facility, already capable of handling ships larger than the 14,000 to 18,000 TEU-capacity behemoths that are quickly becoming commonplace in the shipping industry. Its operations are almost entirely driven by sophisticated automation, minimizing human intervention. Although the details are not for public consumption, it is apparent that the MICT has just had one of its best months ever in October in terms of productivity and the amount of freight moved.

    At least as far as operations in and around the MICT are concerned, it is not the fault of the Bureau of Customs, either. While acknowledging that there were some inefficiencies with Customs’ processes due to overlapping operational orders, Gonzalez also pointed out most of those were old problems that predated the congestion provoked by Manila’s truck ban, and that the high productivity of the terminal indicated that the agency’s work was not really slowing things down at all.

    Bureau of Customs personnel were also unfairly tagged in an accusation made by Secretary of Miscellany Rene Almendras, who heads the Cabinet Cluster on Port Congestion, at the beginning of last month, when he said that certain parties were extorting P500 to P1,500 or more from truckers in order to enter the port.

    While I would not go so far as to say Sec. Almendras was lying outright—only as a matter of courtesy and not because that forbearance actually represents my own opinion—his allegation was certainly a gross exaggeration. The procedure for entering the terminal is completely automated; an arriving trucker checks in at a remote kiosk at a toll booth-like structure, where his biometric information (fingerprint, picture), and the pertinent identifying details of the truck he is driving are automatically scanned and recorded. Truck departures from the terminal are handled in similar fashion. There is not even an opportunity for any money to change hands, as the process is entirely controlled by computer; the human overseers of that system are in a control room half a kilometer away, and in turn have another part of the computer system overseeing what they are doing. The garden-variety corruption Almendras described would require the conspiratorial cooperation of probably 20 or 30 people, including a number of upper managers, and a major hack of an extremely complex computer system.

    The dire condition of the road infrastructure connecting the port is an obvious problem; the road access to the MICT is probably the best of the three main terminals (MICT, North Harbor, and South Harbor), and it is frankly atrocious. Improving access is the most critical priority for the ports going forward—the men in charge of Manila’s other two terminals, ATI’s Andrew Hoad and North Harbor’s Richard Barclay, have expressed precisely the same sentiment—but when the road is not even being used, the issue takes on an entirely new wrinkle.

    A slowdown in weekend port traffic is understandable; the costs of higher trucking fees and paying factory or warehouse workers overtime to handle incoming freight might very well outweigh storage fees charged by the port terminals for overstaying containers, even though there have been incentives offered to encourage importers to pick up their goods on Sundays and other off-peak times. But there are few, if any, sensible explanations for a lack of traffic during regular business hours.

    Gonzalez pointed out that Metro Manila locators typically pull out their freight at night when traffic conditions in the city’s routinely clogged streets are better, but that those customers only account for a little more than half of the cargo arriving at the port; the rest, which at a minimum comprises several hundred containers per day, is carried away to provinces north and south of Manila, and is easier to transport during the day.

    Apart from “sheer laziness,” there are only two possible explanations that make any sense for the evident lack of ardor on the part of importers to retrieve the cargo they’ve been crying has been logjammed by the port congestion: Either Philippine businesses have in general been carrying excess inventories for most of this year—since at least April, which is when the truck ban implemented in February first began to have a critical impact on the port terminals—or they are intentionally shorting their inventories now.

    Both of those possible scenarios have dire implications, serious enough, in fact, that the business community ought to be afforded the opportunity to offer their own explanation before those implications are discussed, because what would likely come out of that discussion are conclusions that approach the definitions of unpleasant things like “wholesale fraud” and “economic sabotage.” No one really wants to go there, but go there we shall if that’s the only place the road of reality leads us. So speak up, business people. Anyare?



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    1 Comment

    1. Isn’t this too big a conclusion for something that is based on a single observation only? When the story of this port congestion first broke out the culprit being blamed was Erap’s truck ban. Then in one of your articles you said congestion was a worldwide phenomenon caused by the use of very large container ships disgorging their extraordinarily huge volume on inadequate handling systems. Then today you are bringing up the specter of economic sabotage because of the importers’ unexplained delay in collecting their cargo due either to excess inventory or deliberate shorting. This is getting harder to follow than a conspiracy theory. If it were up to me I will wait until Christmas. If the congestion evaporates like the morning dew then it could partly confirm my theory that this is smuggling related that is timed for the coming season. If not, then I will admit that the mystery of this port congestion is harder to unravel than the question of who is really behind the Islamic State of Iraq and Syria (ISIS).