DTI readies draft bill regulating shipping rates

MANILA, Philippines — The Department of Trade and Industry (DTI) is planning to come up with a draft bill to address high shipping rates this month. 

Trade Undersecretary Rowel Barba said the agency is working on the draft bill on shipping charges to be endorsed by Trade Secretary Ramon Lopez to Congress. 

“Hopefully, we will have one before the end of January,” he said. 

Lopez said the DTI would push for a legislation to regulate shipping rates instead of an earlier plan to ask President Duterte to issue an executive order.

The decision to go with the legislation route was made upon consultations with lawyers, as an EO might not be sufficient to cover what is needed. 

Under the bill, there would be a government agency to regulate the shipping charges and rates being imposed. 

Prior to the plan to ask the President to issue an EO for addressing shipping charges, the government was initially going to release a joint administrative order (JAO). 

Targeted for release in February last year, the JAO was supposed to contain rules and regulations governing fees and charges of shipping lines, port operators, truckers, and port users to lower operating costs and improve logistics efficiencies.

This JAO was supposed to be government’s response to concerns being raised by the private sector including the Philippine Chamber of Commerce and Industry and Philippine Exporters Confederation Inc. on high shipping charges and congestion at Manila’s ports.

To address the high shipping rates, Lopez said earlier, the government wants to set a cap or range on fees to be charged. 

Based on a 2018 study conducted by the DTI and the World Bank, the Philippines had the highest logistics cost in Southeast Asia at 27 percent as a percentage of sales.

This is higher than the 21.4 percent in Indonesia, 16.3 percent in Vietnam, and 11.11 percent in Thailand.