- Exporters have urged domestic ship owners to study the possibility of operating within the region.
- Last week, Philexport reported on the difficulties encountered by food exporter.
Exporters have urged domestic ship owners to study the possibility of operating within the region to expand vessel capacity and address lack of space, says an article published in Malaya.
Philexport Discussion
The Philippine Exporters Confederation Inc. (Philexport) in its newsletter said the Export Development Council-Networking Committee on Transport and Logistics (EDC-NCTL) tackled at an online discussion recently with the Maritime Industry Authority (MARINA) and domestic ship owners the problem of the unavailability of vessel space that has been affecting their operations.
Domestic Vessels Operations
Among the recommendations, which will be presented to the appropriate agencies, is to encourage domestic ship owners to operate within the region to expand vessel capacity.
Philexport committed to conduct a poll among its member exporters to identify the routes where domestic vessels can focus their operations. These priority routes are those that have sufficient volumes to and from the Philippines so local ship owners will see the viability of taking the risk to launch new services.
Service Provider’s Commitment
Philexport said Philippine-based logistics service provider Royal Cargo has committed to provide its ships to transport export cargoes to their ports of destination in the region.
It said Royal Cargo chief executive officer Michael Raeuber disclosed the company has already applied for a franchise with MARINA to be able to do so.
Also suggested is for MARINA to facilitate the issuance of a Certificate of Public Convenience so domestic ships can go ahead and provide the regional service.
Cargo Delay Problems
The recommendation comes after more exporters and shippers have joined calls for the government to step in and address the current maritime transport issues, including vessel capacity constraints and surging freight prices, which are leading to cargo delays and revenue setbacks.
After the processed food and fresh food exporters, garment and furniture exporters have taken their turn to express frustration and ask for help with the deteriorating container shipping situation in the Philippines.
Garment Industry Losses
Robert Young, Philippine Exporters Confederation Inc. (Philexport) trustee for the textile sector and president of the Foreign Buyers Association of the Philippines (FOBAP), said the garment industry is incurring millions of dollars in losses due to the supply chain squeeze.
A garment company said the issue of vessel space availability is a huge one for us and our clients. Delay is between two weeks to almost two months.
Domino Effect of Issues
Exporters said this situation is creating production space issues which are creating a domino effect, such as continuing delays in our shipment.
This, along with other issues such as the slow release of permits and import license, rising cost of natural materials, and shortage of raw materials, adds to manufacturing costs and leads to continuing loss of business in favor of Vietnam and Indonesia, the exporters added.
Uncompetitive Products
Meanwhile, furniture exporters have asked the Chamber of Furniture Industries of the Philippines to help them find slots on vessels and address soaring freight rates.
Cost of freight has gone up from around $4,000 per 40-foot container to $12,000, revealed one shipper, adding this makes their products uncompetitive.
A Global Issue
The exporters warned the third quarter and fourth quarter surge of exports might be a nightmare with this current setup.
Philexport president Sergio Ortiz-Luis, Jr. earlier said that while this is a global issue that may be beyond anyone’s control, the government and private sector must still work closely together to effectively address the logistics constraints.
Last week, Philexport reported on the difficulties encountered by food exporters in getting their shipments on international shipping lines to their customers overseas.
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Source : Malaya
