RDC-7: Port woes may cause food price hikes

CEBU, Philippines – The Economic Development Committee of the Regional Development Council 7 is calling on port authorities to urgently address the congestion at the Cebu International Port which has already affected importers and exporters.

And if the problem will not be addressed immediately, EDC Chairman Robert Go warned that consumers may have to suffer higher food prices brought by the port congestion.

“This year, now, today,” Go emphasized of the time when overcrowding at the CIP should be resolved, “because container vans are there being stocked up.”

“The business is being made to suffer… [The congestion] is a mess, it’s a big mess,” Go, who is chief executive of Prince Retail, told The FREEMAN in an interview on Monday.

“That is detrimental to our growth of Region 7… we are losing competitiveness,” he added.

Go said congestion is happening at the CIP because of the slow process in the release of shipments coming into the port, blaming the Bureau of Customs Port of Cebu for the hitch. Overcapacity of container yards has also contributed to the congestion.

The EDC also called on the Cebu Port Authority and Oriental Port and Allied Services Corp, the exclusive cargo handling services provider at CIP, to act on the problem which has significantly affected the business community.

Delays

Go said delays in release of imports should not be blamed on the importers but on the authorities for not having checked them within the usual three to six days of processing.

It now takes 20 days, he said, before shipments are released from ports, which could mean that importers have to pay for the daily storage fees per container in excess of the free of charge period.

“Importers have been unreasonably being charged and being penalized because of the delay,” the committee chair said. “They are also slapped with demurrage rates every day.” Demurrage charges are paid for the delay of taking delivery of shipments in excess of the FOC period.

Adding to the delay, he further said, are the alerts being issued by BOC Port of Manila to the BOC here to have shipments undergone a 100% examination to ensure that these are not smuggled goods. Each container costs at least P3,000 for examination. “If there are alerts, it probably goes to one to two months [before shipments are released],” he said.

He stressed that these port setbacks are delaying the delivery of raw materials which, as a result, are also making production of goods deferred. In turn, retail stores may lack stocks due to the delay in the manufacture of basic goods.

Exporters, for their part, also have to bear the shut-out and delays of containers for export, forcing them to spend for temporary storage of their products near the port while waiting the ships to arrive.

The official further warned shipping lines may have to go back to their port of origin because they cannot unload in the port and that they have to charge additional shipping costs.

Moreover, the daytime truck ban which is being implemented by some local government units has also added to the congestion.

Solutions

“One immediate thing is for BOC to process shipments faster. That should be solved because the business will suffer,” EDC’s Go said.

For a long-term solution, he said the international container terminal should now be built to address the rising number of port calls and volume of shipments. This should have existed already years ago, he said, but the implementation is very slow.

Various business groups in Cebu have already expressed urgency that the government should address the port congestion in Cebu to prevent it from becoming worst.

On March 20, the EDC is going to endorse the port congestion issue to the RDC during its full council meeting, he said. And this would hopefully make the issue known to the concerned national leaders.

In a previous interview, National Economic and Development Authority-7 Director Efren Carreon expressed hope the transfer of the container port would be hastened.

He said the proposed relocation for the port has not yet reached the Investment Coordination Committee of NEDA.