Business groups are once again raising their vehement objection against an order of the Philippine Ports Authority (PPA) prescribing the registration and monitoring of containers, which they argue is an unnecessary cost that could add to the already rising cost of commodities and higher inflation for the country.

 

Under Administrative Order 04-2021, PPA will implement the Trusted Operator Program-Container Registry and Monitoring System (TOP-CMRS) program, which mandate the following:

1. Registration and monitoring of all foreign containers entering and leaving PPA ports

2. Container insurance policy for all containers registered in the system.  This insurance will take the place of container deposit and maintenance fees required by international shipping lines.

3. Tracking devices for said containers to record the location, status, movement and time of discharge of vessels from the time the container is loaded for export.

 

The group, composed of Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation Inc. (PHILEXPORT), Supply Chain Management Association of the Philippines (SCMAP), Federation of Filipino-Chinese Chamber of Commerce and Industry, Inc. (FFCCCI), Philippine Association of Meat Processors, Inc. (PAMPI), Philippine Multimodal Transport and Logistics Association, Inc. (PMTLAI), Alliance of Concerned Truck Owners and Organizations (ACTOO), Alliance of Container Yard Operators of the Philippines (AYCOP), Association of International Shipping Lines, Inc. (AISL), Association of Off-Dock CFS Operators of the Philippines, Inc. (ACOP), Customs Brokers Federation of the Philippines (CBFP), Pasig Port Users United, Philippine Liner Shipping Association (PLSA), Philippine Ship Agents Association (PSAA), Port Users Confederation of the Philippines, Inc. (PUCP), Practicing Customs Brokers Association of the Philippines (PCBAPI) and the United Portusers Confederation of the Philippines, Inc. (UPC) wrote an open letter to President Ferdinand Marcos, Jr. requesting the president’s intervention to stop the PPA from implementing Administrative Order No. 04-2021.  The groups further appealed Congress to investigate the anomalous issuance of AO 04-2021.

 

The objections are grounded on the following:

 

• AO 04-2021 will worsen inflation in the country.  Estimates indicate that the direct financial cost alone from the additional insurance fees, transaction fees, and trucking fees required by TOP-CRMS/ECSSSF will result in an almost 50% increase in the cost of importing goods.  In real terms, this will lead to a staggering additional annual import cost estimate of at least P35 Bn.  The ultimate victim of these additional costs is the ordinary Filipino consumer, who is already bleeding from an inflation rate of 8.1%.  The program will result in astronomical increase in the prices of basic food and other commodities.

 

• The TOP-CRMS/ ECSSSF was not designed to address smuggling.  PPA officials themselves admitted at the Trucking Summit the agency organized on January 16, 2023 that the system mandated under AO 04-2021 was not designed to address smuggling and that its relationship to smuggling is merely incidental; and (2) that its real focus is the return of empty containers and container deposits.  Moreover, the tracking of containers is just one part of curbing smuggling and is already being implemented by Customs pursuant to its mandate under the Customs Modernization and Tariff Act (CMTA).

 

• PPA is taking over the role as regulator for international shipping lines, pre-empting legislative action.  Container Deposit is among the issues currently being addressed by House Bill No. 4933, the “International Maritime Trade Competitiveness Act”.  PPA is preempting action being taken by the legislative branch of government and assuming upon itself the role of the regulator of international shipping lines.  This matter is best left to the final determination of Congress, which aims to settle issues involving fees and charges imposed by international shipping lines.

 

It should also be emphasized that as of the present, around 55% of the total number of shipping lines in the country no longer require container deposit, while 20-25% of them are obtaining the services of the Container Ledger Account (CLA) in lieu of the container deposit.Only 20% of the shipping lines require the container deposit, with some of these lines waiving the deposit depending on the trust level between the courier and importer.

 

• TOP CRMS/ECSSSF is not the solution to port congestion but could even worsen it.  The manual installation of tracking systems for each container leaving the ports could worsen the already current congestion at the ports.  Likewise, requiring the transfer of empty containers to PPA-authorized staging facilities will create additional bottlenecks for all containers going in and out of the Manila Ports, leading to severe congestion in the surrounding areas in Metro Manila.

 

The solution to port congestion lies in the development of port infrastructure and maximizing the assets that PPA already has and not what it will still acquire, accredit or purchase.

 

The group further pointed out that PPA-AO-04-2021 does not comply with the basic requirements of the Constitution, laws, and international best practices.

 

• It is inconsistent with the requirements of the Philippine Competition Act.  Requiring truckers and other service providers to register under one system, which would then nominate and assign them to individual transactions (i.e., empty reposition) demolishes the autonomy of shipping lines and truckers to negotiate, manage and monitor their current and prospective vendors.  This feature in the proposed system creates a monopoly where multiple service providers are at the mercy of the winning bidder for TOP-CRMS.

 

Moreover, giving a third party (TOP-CMRS operator) some form of access and influence on the operation of another entity that they do not have full visibility over potentially creates corruption and poses a potential cybersecurity risk, especially if the third party connected to a system that requires every port user to register their containers.  A good example of this is from the truckers’ side wherein a third party will be given control over the trucks.

 

• The PPA has continued to ignore serious objections to TOPCRMS/ECSSSF without any valid explanation.  The PPA did not conduct a Regulatory Impact Assessment before the issuance of AO-04-2021.  Implementation of this AO will add eight more steps to the whole process of doing business for the stakeholders, which is inconsistent with the near-term agenda of President BongBong Marcos on reducing transport logistics cost and the ease of doing business.

 

PCCI and the business groups are working on having an audience with the heads of these agencies to bring port users sentiments on the AO. --- Rhuby Conel

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