Overloading, increased rice prices
Last June 1, new truck overloading guidelines were put into effect. Instead of axle weight, gross vehicle weight (GVW) is now the basis for determining the required carrying load.
If all 13 categories of vehicle classification are made to comply with the new guidelines immediately, rice prices will increase significantly because of the imminent jump in freight costs and possible shortages.
This is one reason given for issuing the new guidelines: “Overloaded vehicles, particularly trucks and trailers, have tremendous damaging effects on highway safety and traffic operations, and cause a heavy toll on government investments in infrastructure”.
However, given the short notice to the truckers on the implementation deadline, there will be expected large rice price increases.
The good news is that only 2 of the 13 vehicle categories have to be exempted for now from complying with the new guidelines to avoid this problem. These are for 18-wheelers and 22-wheelers.
Last June 3, I met with rice truckers, millers and farmers. We discussed the consequence of the short notice given. The rules were amended on April 5, 2013. But for many truckers, they learned about it only a few weeks before the June 1 deadline.
The Cebu Truckers Association stated in a May 22 letter: “May 18, 2013 an advisory was received through the DPWH weighing station in Minglanilla, Cebu, regarding implementation of the amended RA 8974.” In the same letter, they said that there would be a 50 percent increase in transport cost alone. As an example, they gave the current per ton cost of a shipment of soybeans from the US to increase from P4,270 per ton to P6,400. But their main complaint was that 13 days was not enough time to buy the trucks needed to comply with the June 1 deadline.
Philcorngrains spokesperson for this issue Juancho Barretto stated that he expected a 40-percent increase in freight cost. Instead of the 200 trucks carrying the needed rice and corn supplies from Isabela to Manila, they would now need 300 trucks since they will no longer be able to load as much grain per truck.
A truck will carry only 475 bags per trip under the new guidelines, a decrease of 40 percent from the current 800 bags per trip.
Barretto adds: “The major problem is that we will have to buy 30 percent more trucks to comply with the June 1 deadline. However, there simply are not enough trucks available for purchase at this time. The large price increases will mainly be because of the expected 30 percent supply shortage.”
Yesterday, Roberto Suansing, spokesperson of the Confederation of Truckers Association of the Philippines, has requested a one-year moratorium for only 2 of the 13 vehicle categories. He says: “It is simply not possible to have 30 percent new trucks delivered within 2 weeks. Some trucks with special specifications even need one year”.
The guideline objectives should be considered with a broader view. This way, all implications resulting from the guideline implementation can be addressed. The obvious one is the timing of the implementation, which should consider the period it takes to order 30 percent more trucks.
The second is the impact on costs, considering the import threats from the 2015 Asean economic integration. The Cabinet cluster approach so well-managed by Secretary Rene Almendras should be harnessed in this area.
Having just achieved a record-breaking 7.8 percent growth in the first quarter of this year, we do not wish to jeopardize this impressive growth trajectory.
Though the DPWH Secretary is recognized as one of our best government officials, his views can still be supplemented by those of the DA, DTI, and Neda Secretaries.
This is because the price and supply availability of critical commodities will be affected by these guidelines.
When I was Flagship Secretary under the Office of the President, former President Fidel Ramos insisted on Complete Staff Work (CSW).
This required all the Secretaries affected significantly by another Secretary’s recommendation to sign off on proposals, with comments if appropriate.
In this case, we believe the additional sign offs can come from the DA, DTI and Neda Secretaries.
If the cluster approach is applied to the overloading issue, we will see both price stability and product availability not only in rice, but other important agricultural and industrial commodities as well.
(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail [email protected] or telefax 8522112).
