Port congestion problem sends exporters reeling

Amid reports of normalizing port operations, exporters continued to reel heavily from revenue and employment losses, additional costs, as well as production delays, which have largely hampered the profitability and stability of their respective operations, the Philippine Exporters Confederation Inc. said Friday.

Citing the results of a survey conducted by the Export Development Council (EDC), Philexport disclosed that food and garment shippers suffered from losses of as much as $450,000 (roughly P19.8 million) in terms of “cancelled orders and lost opportunities” since the port congestion started.

Losses for the food sector due to shipping exports via the more expensive air transport have amounted to at least P4 million, while the electronics group has pegged its members’ revenue losses from exports at about $1,000 per metric ton.

The EDC conducted a poll on the impact of port congestion on export industries from Oct. 7 to 21 to determine how the issue has affected the performance of four export sectors namely food, electronics, garments, and home furnishing.

Respondents were then asked to provide data on additional costs per container, number of days delayed in delivery, number of days delayed in production, loss of business, loss of employment, and other issues since the congestion issue appeared.

The congestion at the Port of Manila was said to have stemmed from the expanded truck ban policy implemented by the city government of Manila in February this year. This—along with a number of other factors—had then spurred a series of complications that saw truck, port and container yard congestion adversely affecting businesses and consumers alike.

Although the truck ban policy was eventually lifted in September, the port congestion issue continued “despite progress in decongesting the ports,” the EDC was quoted as saying.

The exporters said they now have to pay additional surcharges such as imbalance equipment surcharge, emergency cost recovery surcharge, and import congestion container surcharge, while trucking costs have expanded by as much as 300 percent.

Delays in delivery of shipments and increase in port-to-port transit time now ranged from at least one week to about one and half months, while electronics manufacturers had to discontinue a 24/7 production schedule, and were forced to use air shipments.

Enterprises also continued to implement downsizing, rotation, or work stoppage due to delays in the arrival of raw materials.

To help ease the difficulties encountered by exporters, the EDC’s executive committee has put forward a set of recommendations to the Department of Trade and Industry.

According to a resolution signed by Trade Undersecretary and EDC executive committee chair Ponciano C. Manalo Jr., the export sector “continues to experience problems stemming from the port congestion despite progress in decongesting the ports.”

There is, thus, a need to require all shipping lines to stop charging importers and exporters exorbitant surcharges and other related fees; allow the return of their empty containers within two weeks; and to be responsible for the return of their empty containers within two weeks.

The EDC also called for the reduction of the allowable period for overstaying containers to only 30 days from the current 180 days. It likewise pushed for the capacity expansion of the Batangas and Subic ports; extension of the validity of the one-day gate pass; and the establishment of a task force that would monitor the daily situation at the ports.