Proposed storage charges onerous, exporters say

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The Philippine Exporters Confederation Inc. (Philexport) find as onerous the proposed increases in the storage charges on foreign containerized cargoes.

Philexport urged the Philippine Ports Authority (PPA) to subject the plan to a regulatory impact assessment to  prevent causing undue regulatory harm.

“The  rate of increase should be based on the average inflation level since the last fee adjustment. We find that the PPA proposal to increase by 32 percent the fees for import, export and transshipment containers, as well as impose a 150-percent surcharge on the corresponding storage rates with an increase for reefer containers is too onerous, “ said Sergio Ortiz-Luis Jr., president of Philexport in a letter to Jay Santiago, general manager of PPA, dated November 8.

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Ortiz-Luis said Philexport agrees with the  objective of the rate hike proposal to prevent congestion in the ports but warned this may cause harm to shippers and the economy in general.

The group urged PPA to consider exemptions from payment of storage fees  on situations when the “overstaying” containers are due to reasons beyond the shipper’s control like during the arming and disarming of E-TRACC device on containers; moments of downtime of IT systems of PPA and other relevant government agencies; and delay in vessel arrival.

Philexport also proposed that the  PPA should consider excluding national and local holidays in counting the days beyond the free storage period (FSP) that will be charged.

The group also said the PPA should continue to exert pressure on shipping lines to put up their respective yard where these containers are supposed to be parked or keep track of container yards that are available for this purpose.

Using the Consumer Price Index from 2013 to 2022, the PPA proposes to increase the storage charges as follows: 32 percent  increase for import, export, and transshipment containers;   150 percent surcharge of the corresponding storage rates with increase for reefer containers

Storage charge as defined under PPA Memorandum Circular No. 03-95 is the amount assessed on articles, baggage, and containers for storage in the port premises, cargo shed, and warehouse of the government, PPA said during a virtual dialogue.

Storage charges for foreign containerized cargoes are assessed when the cargoes remain stored within or outside transit sheds or laid out in the open yard or stored in the warehouses of the PPA beyond the FSP.

Foreign containers include import cargoes, export cargoes and transshipments.

PPA said storage charges for foreign cargoes are assessed when these containers remain at PPA ports beyond the FSP. For imported cargoes, assessment comes five calendar days after the day that the last item of cargo is discharged from the carrying vessel.

For export cargoes, it is four calendar days from the day that the cargo is received at the port.

For foreign transshipments, it is 15 calendar days from the day of arrival to the day of departure.

In justifying the proposal, PPA argued that increasing the storage charges will ensure optimal use of the yard and encourage immediate withdrawal of containers to prevent congestion.

The PPA added “the proposed increase in storage charges for foreign containerized cargoes is never meant as a revenue source. The payment of storage fee is, thus avoidable, where cargo owners may opt not to pay this by getting their cargoes out during the free storage period.”

At the  consultation,  attendees  suggested spreading the increase in tranches over a three-year period.

 

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