Shipping lines’ losses due to truck ban mount

Not only the shipping industry, but also—and ultimately—the national government stands to lose revenues from the daytime truck ban in the city of Manila, warned the Association of International Shipping Lines Inc. (AISL).

AISL president Patrick G. Ronas said that, as a result of the truck ban being implemented since February, shipping lines have been incurring losses as ships get delayed for days awaiting to berth at the Port of Manila, where the movement of cargo to-and-fro has slowed due to the lack of land transportation.

“Shipping lines incur a cost whenever a ship is idle. Ship owners would like their vessels to be on the move all the time, which is why it is important for a carrier to call a terminal able to provide efficient operations … a pier where cargo can get discharged and loaded at the quickest possible time,” Ronas pointed out in an e-mail.

The executive cited that the charter hire for the type of vessels that come to Manila would cost between $8,000 and $10,000 a day, so losses shoot up when ships cannot berth for days.

“As trucks were restricted from moving the cargo or containers from the terminals, this has created a backlog as the container yard space gets filled up. You have ships coming almost everyday discharging cargo, while trucks are unable to pick up from the terminal as they have not gone back from delivering the previous container that they have carried. As the terminal gets full, it will have a difficult time in allocating space for containers carried by the incoming vessel,” Ronas explained.

Hence, the vessels—some of which are feeders that have to meet their mother vessel in another port—now have to cut their call, or else risk also delaying the export shipments coming from Manila, he said.

Also, truckers have increased their rates due to a limited number of trucks available.

“Prior to the ban, truckers were able to pick up a laden container at the port, deliver to the consignee, de-van and return the empty container to the ECD [empty container depot] in one day. If the place of delivery is near, the trucker is able to make two cycles a day. But in view of the ban, the trucker now completes one cycle in three days … and therefore trucking rates have gone up quite dramatically,” the executive shared.

In the end, businesses such as shipping firms are not the only ones being affected, but also government revenue generation, he said.

“If the situation does not improve, principals may limit the acceptance of containers bound to Manila. If the containers do not come, then we do not earn any commission on the freight rate. No commission means no revenue. No revenue means less taxes for the government. It’s as simple as that,” Ronas said.