Ports agency studying ways to implement DoTr directive to cut shipping, travel costs

THE Philippine Ports Authority (PPA) is looking into reducing port costs by reviewing statutory and regulatory expenses paid by users, Officer-in-Charge General Manager Manuel A. Boholano said, noting that the agency is under orders to effect such reductions from the Department of Transportation (DoTr).

“Our first order of business is to comply with the directive of (Transportation Secretary Jaime J. Bautista) to lower travel and shipping costs,” Mr. Boholano said in his anniversary message delivered during the 48th anniversary of the agency on Tuesday. 

Port users have been complaining about increasing shipping costs and the impact of higher fuel oil prices.

Shipping companies have raised their freight charges by an average of 25% starting March, logistics companies said.

“Fuel prices continued to increase with the Ukraine conflict and this pushed the group’s bunkering cost to P486 million, a 43% increase year on year. Consequently, cost of sales and services escalated to P1.22 billion,” Chelsea Logistics and Infrastructure Holdings Corp. said in its first quarter report.

Lorenzo Shipping Corp. said in its report for the first quarter that it saw “an increase in direct cost amounting to P796 million from last year of P711 million mainly due to soaring fuel prices.”

Industrial designer Kenneth Cobonpue said during The Chiefs on One News program last week that cargo shipping rates have risen significantly.

“In terms of exports, shipping, logistics (are) a big problem. Before, a 40-foot (container) shipping from Cebu to Los Angeles used to cost $3,000. Now the price is anywhere from $15,000 to $18,000. That price really wipes out all the margins. That’s the problem with exports,” Mr. Cobonpue said.

The PPA said that any possible reduction in port-related costs will come on top of the current terminal fee exemptions enjoyed by students, senior citizens, differently-abled persons, uniformed personnel, and Medal of Valor awardees and their first-degree kin.

“Since its first application prior to the pandemic, the free terminal fee is equivalent to a benefit (that costs) P7 million a month (on) average,” it noted.

The agency also said that its ports “continue to climb out” of the pandemic, citing an increase of 130% to 20.87 million passengers handled from January to May 2022, from 9.07 million passengers a year earlier.

Containerized cargo traffic grew by 3.84% to 3.12 million twenty-foot equivalent units (TEUs) from 3 million TEUs previously.

Meanwhile, ship calls rose 13.4% for the period compared to 153,007 ship calls in the same period last year.

Total cargo volume remains flat at 101.74 million metric tons, the PPA said. — Arjay L. Balinbin