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Tales of port abuses (Part 1)

Lack of regulatory power to oversee foreign shipping lines

WITH the advent of the world trade, foreign commercial vessels bringing in and taking out cargoes worth billions of pesos for the market are not paying enough taxes and have subjected local port stakeholders to various abuses because of lack of regulatory power on the part of the Philippine government.

Unfortunately, as the situation now stands, existing domestic laws and regulations are not able to cope up with the fast-evolving trend in the world market in regulating the operations of these foreign commercial shipping vessels within Philippine ports.

Shipping operations is an aspect of transportation that is supposed to be under the regulatory ambit of the Department of Transportation and concerned attached agencies.

To date, there is no definite law, rule or regulation that regulates the conduct of these foreign commercial vessels that are plying to and from Philippine ports. This regulatory vacuum seemingly emboldens these foreign commercial shipping lines to act with impunity and impose whatever  charges on hapless port stakeholders.

In the continuously prevailing scenario, there are two opposite sides in a mutual but inequitably disproportionate spectrum. On one side are the port stakeholders composed of importers, exporters, brokers, truckers, forwarders, etc.; and on the other side are foreign commercial shipping lines.

Of the two, the port stakeholders are at the receiving end for, whether they like it or not, they are forced to avail themselves of the services of these foreign commercial shipping lines that can continue with their unhampered operation in the Philippines because of the absence of a specific regulatory body.

Based on the above factual illustration, port stakeholders are saddled with, but not limited to, the following problems, to wit:

1)  Imposition by foreign commercial shipping lines of various shipping charges without the port stakeholders’ rights to question the propriety or basis of the same. These seemingly questionable shipping charges are as follows:

  1. a) Container deposits
  2. b) Container demurrage charges
  3. c) Etc.

Example (Actual) Wallem Shipping 1×40 container

Imposed Charges:

Terminal Handling Fee        —      $172.00

Cleaning & Disinfection       —      $20.00

Delivery Order Fee             —      $65.00

Empty Equipment Imbalance

& Hanover Charges             —      $900.00

Documentation Fees           —      $65.00

Bank Charge                      —      $1.00

Total                                  —      $1,223.00

Plus:

Container Deposit

Fee    P9,000.00

2)  Capricious policies of foreign commercial shipping lines with
regard to:

  1. a) Return of empty containers;
  2. b) The matter of container deposits, refund of the same, procedure for refund; and
  3. c) Processing of shipping documents.

The above problems have tremendous incalculable negative effects on port stakeholders and ultimately to the chain of goods in the Philippines. As it usually happens, port stakeholders are at the mercy of these shipping lines.

With regard to shipping line impositions, port stakeholders cannot make any complaint. They must pay those impositions under the pain that any delay in payment thereof will entail delay, or worse, non-release of imported or exported goods, which for sure has multiplier negative consequences on consumers and the entire supply chain of goods.

Whatever charges that these international shipping lines impose, port stakeholders have no choice but to comply. Otherwise, they cannot release goods from them, or worse, cannot transact with them.

As a result, the upward inflation effect sets in as port stakeholders pass on the additional cost of operation to the consumers.

Shipping line cargo operation is quasi-public service in nature. Though the principal motive is profit-making, the activities involved that deal with the transacting public is highly imperative and, therefore, the government must regulate the conduct of these international
shipping lines.

Worse, the newly passed Philippine law, Republic Act 10668, or the Philippine cabotage law, complicates this problem. Under this law, foreign vessels engaging in carriage conducted in accordance with the law shall not be considered common carriers and neither shall such foreign vessels be considered as offering a public service.

This law clearly conveyed that dealings and transactions within the Philippines of a foreign shipping line is not deemed a public service. The implication is that these foreign shipping lines, specifically their actuations within Philippine ports, are outside the scrutiny of Philippine authorities.

The only time that Philippine authorities can intervene is when vessels engaged in foreign trade, including those engaged in barter trade, that enter any port, whether private or government, shall be charged port dues on each call based on Gross Registered Tonnage and also charged dockage at berth per GRT calendar day or fraction thereof, and for purposes of computation, a maximum of 50,000 GRT shall be used. On other charges involving containerized goods, the port authority has no jurisdiction.

References:

About Cecilio Arillo

Cecilio T. Arillo, a veteran author-journalist. He taught undergraduate and MBA interdisciplinary studies at International Academy of Management & Economics and was president of the Philcoman Council of Management and Research Institute. Arillo is a member of the American Economic Association, the American Sociological Association, American Association for the Advancement of Science, Philconsa and lifetime member of National Press Club. He is also a columnist at the BusinessMirror, the Philippines' top business newspaper.

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