Private sector solution to port congestion

Since governance is too important to leave to the government alone, the private sector should be officially involved in helping solve our port congestion woes. This should be done by reviving the National Port Advisory Council, where the private sector is a crucial member. Until this is done, private sector recommendations run the risk of being ignored or treated arbitrarily.

At a meeting initiated by the Philippine Chamber of Commerce and Industry earlier this month, private sector recommendations were made to address port congestion. But will they be taken seriously?

According to a Senate report, port congestion results in losses of P2.5 billion a day. This means missed deliveries, contract violations and decreased incomes and fewer jobs for both industry and agriculture. There are three major reasons why this happens.

First, empty containers stay in the port for 30 days, instead of a maximum of 15 days. In the meantime, there is no space for several filled-up containers. Uploading time takes 7-10 days, instead of the 3-5 day normal timeframe. Second, 10 percent of the port is occupied by seized and abandoned containers, misusing valuable space. Third, it is cheaper for owners to keep their containers at the port, instead of renting warehouses.

Below are the top nine recommendations made at the PCCI meeting. However, they may be summarily shelved because they are not given to a recognized government body like the National Port Advisory Council.

I chose them because of my experiences in helping then President Fidel Ramos solve port congestion during his time in less than five days. Perhaps because of this, at a 2015 Senate hearing called after more than eight months of port congestion, Senators Francis Escudero and Bam Aquino asked the executive department to get the missing private sector input partly from me. I did this with suggestions from Alyansa Agrikultura, PCCI and the Federation of Philippine Industries. Elsie Chua helped with Filipino-Chinese Chamber of Commerce recommendations. With then Secretary Rene Almendras and private sector participation, the congestion was solved within two months.

Based on these experiences, here are the key recommendations:

1. Sweepers should be hired to “sweep away” overstaying empty containers.
2. Penalties for overstaying containers should be significantly increased. This way, the cost to the owner of having his containers staying at the port will become much higher.

3. Weekends should be open for deliveries. According to PCCI officials, the Bureau of Customs is not fully implementing its announcement that it will service weekend deliveries. The central bank should accredit more banks to service these deliveries.

4. The BOC should immediately accredit new container yards to receive the containers that cannot immediately find space at the port. An example is RIL Best in Cavite that can accommodate 10,000 containers.

5. To free up 10 percent of port space, the seized and abandoned containers should be auctioned off or donated to the Department of Social Welfare and Development.

6. In times of crisis, Manila North Harbor should be allowed to handle international shipments.

7. So truckers know the slots available for container yards at any given time, the GO FAST application that tracks this information should be rolled out.
8. Discussions should be done with the management of shipping lines to determine their role and responsibility for the empty containers under their jurisdiction.

9. To cut cost, avoid overpricing and guard against irregularities in Mindanao. X-ray cargo inspection should be done at the government’s Mindanao Container Terminal. Today, this is done at a privately operated designated examination area/customs clearance area. It is intriguing that former Commissioners John Sevilla, Alberto Lina, Nicanor Faeldon and Isidro La Pena all recommended the use of a government facility, but they were overruled.

To ensure that private sector recommendations are addressed and not summarily dismissed, the National Port Advisory Council must be revived. It will be the institutional guarantee that private sector participation in governance will be allowed, and port congestion better addressed.