Korean manufacturers decry port congestion, mull departure

MANILA, Philippines — Korean manufacturing companies are on the brink of leaving the Philippines as they struggle with port congestion issues, a problem that led to the exodus of some firms and layoffs of thousands of workers in 2014.

Korean Chamber of Commerce of the Philippines president Ho Ik Lee told The STAR that Korean investors, particularly those in the manufacturing sector, are complaining of the “terrible” congestion at the Manila ports and are thinking of packing up their bags and transferring their operations elsewhere.

“They said no raw materials. They are considering to move their factory to Vietnam,” said Lee, following a meeting last week with Korean investors from the Cavite Economic Zone.

“The problem is Manila port. Due to slow transaction, there’s no space for discharge of the containers from the vessel,” he said.

With port congestion issues affecting production, Lee said many of the Korean manufacturers’ buyers who ordered from the US, EU, and Japan would now have to replace their orders to other countries.

“I think the Philippines lost its competitiveness in manufacturing. Who can do manufacturing here under such terrible situation? The business in the Philippines, especially manufacturing, is getting harder and tougher,” Lee said.

Port congestion became a major concern in 2014 when the City of Manila imposed a truck ban which affected Manila’s shipping system.

“Manila port congestion was a serious problem couple of years ago with the so called truck ban. I think this is second big  congestion,” said Lee, noting that the situation in 2014 led to the exodus of some Korean companies who left the country for Vietnam and Cambodia.

The Philippine Ports Authority (PPA), however, denied that the Manila ports are suffering from congestion.

PPA general manager Jay Daniel Santiago told The STAR that the Manila ports utilization rate has been down since the holidays.

“We are currently not experiencing any congestion at the terminals,” Santiago said.

“There may be some other factors why the shipments are delayed such as delays from the originating ports or issues with their brokers or with the Bureau of Customs. Now, if they’re talking about slow transaction usually the problem is the clearing process with the Bureau of Customs not with the terminal because the terminal would always want to move the containers as fast as it can,” he said.

Santiago said that if a vessel leaves the originating port out of schedule and they do not meet their slot schedule in Manila, then they will have to wait for an opening where they can be accommodated out of schedule or will have to line up.

He said vessels arriving on schedule are always given slotting priority.

“If their vessels arrive on schedule slot and if they have no problems with the Bureau of Customs, their cargoes are released within three days from docking of the vessel,” Santiago said.

“It is not true that there’s no space for the containers when they are unloaded because our utilization is below 84 percent now and still going down. And containers do not stay in the terminal longer than five days unless the shipment has a problem with the Bureau of Customs in which case they are moved to the customs designated area because the areas for unloading are always being cleared to accommodate the unloading of new cargoes and containers,” Santiago said.