Business leaders push for more Ro-Ro ports

Some of the country’s largest companies have reported sharp reductions in transportation and storage costs while increasing cargo and passenger traffic in the country due to the roll-on, roll-off system, business groups said over the weekend.

At the same time, the Philippine Chamber of Commerce and Industry (PCCI) and the Employers’ Confederation of the Philippines (ECOP) backed the call of Albay Governor Joey Salceda for the establishment of more steel modular Ro-Ro ports around the country to spur the economy at the least cost to the government.

These business groups also issued a joint resolution supporting a proposed modular Ro-Ro project to boost interisland and regional trade.

“Companies like Nestlé have reduced their distribution centers from 36 to two, creating massive savings without compromising the price or availability of goods,” PCCI chairman Edgardo Lacson said in a statement. “San Miguel Corp., meanwhile, has reduced its transport cost by 57 percent.”

“Allowing vehicles to roll on and roll (vessels) off has spared (these companies) inventory and warehousing costs,” Lacson added. “This illustrates why businesses have clamored for more Ro-Ro ports for two decades, to cut transport and distance costs.”

He cited an Asian Development Bank study that cited large corporations and government agencies whose transportation costs declined through the use of the Ro-Ro system.

For instance, the Department of Health’s cost for transporting medical kits from Iloilo to Bacolod declined by 60 percent. Standard shipping for these medical kits cost approximately P10,000 per shipment compared with only P4,000 through the Ro-Ro system.

In the meantime, the transport of dry goods from Manila to Cebu declined by 20 percent, while ferrying live cattle from Negros Island to Manila declined by 43 percent, according to the ADB study.

In the case of San Miguel Corp., the transport of liquid carbon dioxide for their facilities in Cagayan de Oro or Davao City to Bacolod dropped by 68 percent. In particular, the cost of one shipment of liquid carbon dioxide stood at only P72,000 via Ro-Ro compared with P225,000 through standard shipping.

“We talk of globalization and the need to compete but our infrastructure restricts our over 21,000 members and their businesses from accessing major hubs in the country and foreign markets,” ECOP chairman Miguel Varela added.

The same study cited the experience of Big-E baked goods that had its delivery time shortened from five days via conventional shipping to one day through the Ro-Ro system.

The shortened delivery time resulted in smaller inventories but more frequent shipping, delivering fresher goods to the market.

“This is the same with Gardenia Bakeries, where Ro-Ro allows for the expedient and frequent delivery of fresh goods, thus enabling them to expand markets, specifically the Visayas,” the business groups said.

“They have also benefited from lower freight costs from P25,000 per 20-foot container to P21,000 via Ro-Ro,” the statement added.

The business groups also pointed to the use of fast-food chain KFC of the Ro-Ro system to supply more than 60 outlets in Luzon, six in the Visayas and four in Mindanao from its commissary in Luzon with goods that cannot be transported over land due to high spoilage risks.

Salceda, in a letter to President Benigno S. Aquino III, said the Bicol region alone needs about 15 steel modular Ro-Ro ports that would interconnect the region to the other 7,101 islands, including in Bacacay, Albay; Mercedes, Camarines Norte; Casiguran, Sorsogon; and Ticao Island, Masbate, which were among those lined up for construction under Eiffel-Matierre SAS Ro-Ro ports project, funded by official development assistance (ODA) from the French government.

He said the installation of the said steel modular ports in the 15 areas “is enough for the meantime to spur tourism investment and create livelihood opportunities.”

“After careful evaluation of the project, including the credibility of the private partners, I vouch that the said project is sound and has undergone complete staff work on the viability of the project, consistent to the thrust of the government,” Salceda said.