Traders hit rate hike by international shipping lines

MANILA, Philippines - The issue on whether the Philippine government has any power to stop international shipping lines from arbitrarily increasing their rates came to fore recently when the Philippine Shippers Bureau called a public hearing over a notice the freighters sent importers and exporters telling them they are hiking bill of lading rates.

Trade officials were surprised when some importers showed them other notice of rate increases of other shipping services which indicated that the shipping lines had adopted the strategy of increasing their charges piecemeal.

They told the protesting shippers that the hearing that day was only on the bill of lading rate adjustment brought to their attention earlier. The other notices would be tackled in another forum.

A representative of one shipping line admitted that the notice to increase the bill of lading rates was sent to their clients only last Feb. 15 and was due for execution by March 1. When the importers and exporters brought the issue to the government, the rate hike was postponed to April 1.

It turned out that of the four international lines that gave out notices of rate increases, only one sent a representative to the public hearing.

Philexport representative to the hearing commented that the shipping lines have always been arbitrary in adjusting their rates without the usual consultations and public hearings practiced in the Philippines whenever transport and other public utility rates are adjusted.

He expressed doubts on the ability of the government to stop the rate increases or at least bargain for more reasonable adjustments.

Trade officials answered that the government is not totally powerless on the issue. Foreign companies with operations in the country must follow Philippine laws. Otherwise, the government can pull some levers to get them to follow local laws.

They explained that rate increases must be made known to those affected at least 30 days before these take effect to allow them to make adjustments. In the case of exporters, they must be notified at least three months in advance so they can also make adjustments in adding the cost to products they ship.

Export orders are normally booked and prices agreed on three months before shipment.