Greater consensus needed to lower shipping costs urged

The European Chamber of Commerce of the Philippines (ECCP)-Southern Mindanao is pushing for a greater consensus from the Mindanao business community to lower the cost of shipping.

Republic Act 10668, which amended the Cabotage Law of the Philippines, was signed into law by then President Benigno S.C. Aquino III on July 21, 2015 while its implementing rules and regulation were completed in May 2016. The IRR carried amendments intended to lower logistics cost and ease restrictions by allowing foreign ships to transport cargo directly to and from any local port.

However, up to now the impact on improving logistics and lowering shipping costs in Mindanao has yet to be felt.

“This cannot just be done overnight. There is got to be greater consensus of the Mindanao business community to really push for the lowering of shipping costs. I think it will happen,” said Antonio Peralta, ECCP-SMBC chairman.

Peralta is hopeful that the business sector and the government would be more proactive in inviting foreign shipping companies to serve ports outside Manila.

“I am hoping for the very pro-active and pro-business environment espouse by the current administration. I think there should be changes that are forthcoming for the improvement of the shipping rates as well as the condition of vessels,” he said.

The shipping cost, which is calculated by the shipping rate nautical per mile and basically used Manila as point of reference for the shipping port: Manila to Kaoshiung, $0.55 and Manila to Hong Kong is $0.39 but Manila to Davao is $0.97. Basically this excludes terminal fee and documentation fee.

“It’s very hard for us to accept na mataas yung shipping cost natin, biruin mo it’s like almost over 31 percent of your product cost sa Luzon its 17 percent lang,” he said.

The high shipping cost was among the highlights of ECCP’s Business Conference on Logistics in the Visayas and Mindanao last January 31 in Davao City.

“Why after all these years there was no decline on our shipping cost?” he said.

It was also discussed during the conference the number of maritime accidents, ageing vessels, low incentives given to shipping companies, and lack of coordination between the producers and the shipping companies.

 “That was only half- day conference and normally it was meant to just open up the issue for the basis to a larger conference,” he said.

Peralta said the sequel of the said conference will discuss how high shipping cost impact plans of foreign companies to come to Mindanao.

From the original schedule in March this year, the conference is postponed to June or July this year. Peralta said they decided to cancel the March conference in Davao City following the pronouncements of Mayor Sara Duterte-Carpio banning events here due to novel coronavirus 2019 (COVID-19) scare.

“Yun lang because of the present situation of the COVID we have to cancel some conferences that is supposed to happen here this March and hoping that the situation will be back to normal this July for our conference of Cabotage Law or shipping situation in Mindanao,” he said.