International shipping lines rake in billions of pesos from container deposits, which are expenses exclusive to Filipino traders and which digitalization will totally eliminate, that is the reason for their vicious resistance to the Philippine Ports Authority project.
The P980-million Trusted Operator Program-Container Registry and Monitoring System or TOP-CRMS will be relied on to end the scourge of container deposits on traders which go from P10,000 to as high as P80,000 per box.
Philippine Ports Authority general manager Jay Daniel Santiago has responded to Patrick Ronas, the president of the Association of International Shipping Lines, who claimed that container deposit charges are also imposed in other countries.
“Singapore has no container deposit, but it has no economic fallout as warned by Ronas. In fact, Singapore is an economic powerhouse. Undersecretary (Elmer) Sarmiento said in an interview with Ka Tunying that Irish Shipping Lines was not charging any container deposit during his time, but Irish Shipping is thriving, together with Maersk, which is also not charging the same,” Santiago said.
Further, the PPA chief added that they had done due diligence in checking with other foreign parties in China, Indonesia (except TS Line and Ben Line), and Singapore, which resulted in the conclusion that the majority of the carriers don’t charge container deposits as well.
“At the end of the day, it is the decision of the shipping lines to require deposits or not,” Santiago said.
Ronas, in a television interview, was caught in a lie when he claimed that charging container deposits is a global practice of most shipping lines since containers carry valuable items or goods.
“A container deposit is standard and is an internationally recognized practice in the supply chain industry,” Ronas said, as he cited Malaysia, Indonesia, China, Thailand, Cambodia and Sri Lanka as requiring container deposits.
Maths not myth
“The majority of the issues from the Shippers Protection Office are regarding the unreturned container deposits. In concept, the container deposits should really be returned immediately upon the return of the containers. However, it takes over three to six months before container deposits are successfully claimed back by the importers or consignees, or worse years, or never at all. Such costs are non-recoverable administrative costs,” Santiago explained.
Santiago said that since less than 10 percent of the containers incur material damage in the hands of importers, why then is the return of the deposits delayed?
“Now, assuming a P20,000 per container deposit is returned after 3 months (the best case scenario), the cost of money, admin expenses, and time spent to monitor follow-up, and process such payment and refund would already cost P8,000 per container, conservatively. Now how can the deposits be more cost-effective than the TOP-CRMS’s P980 per container?” Santiago asked.
On top of the P980 per container under the TOP-CRMS, shipping lines will also pay P3,520 to the PPA and its service provider, which are fixed and non-refundable, for using the PPA staging facility, goes the shipping group’s complaint.
He clarified that the P3,520 fee is for containers that will be used and stored at the Container Staging Facility.
“Additionally, a similar fee is already being paid today by the shipping lines to their respective container yard operators of around P6,400, which PPA is reducing to P3520 when using the PPA staging facilities. These container staging facilities will be made available to containers that were rejected to return at the originally designated container yards,” Santiago explained.
He added that aside from the San Rafael, Bulacan staging facility, the PPA will be accrediting other container yards located in various areas.
Santiago said that aside from container deposits, international shipping lines are charging peak season surcharges at an average fee of $70 per container, and a container imbalance surcharge of $450 per container, on top of the terminal handling fees that they have been charging for years.
“The TOP-CRMS does not assign the transactions to the truckers and other service providers. It is still the decision and discretion of the customers. The TOP-CRMS will just hold the parties accountable for the transport of the containers,” Santiago said.
He also clarified that the TOP-CRMS has not been canceled, but only deferred as the PPA Board wants the PPA to further study the system.
“In fact, last 7 February, there was an inter-agency meeting hosted by the Department of Transportation with the PPA, Department of Information and Communications Technology, the Philippine Competition Commission, Bureau of Customs, and the Department of Trade and Industry, in order to continue discussions on the TOP-CRMS,” Santiago said.