Competition Reforms in the Maritime Transport · PDF fileBorder operations at ... Tagalog...

Strictly Confidential © 2014

Competition Reforms in the

Maritime Transport Sector

AER NRG Members’ Meeting

Sept 2015


Compared to ASEAN neighbors, Philippines

agricultural export performance relatively weak

2

Source:

UN Comtrade Database

ASEAN-5 Total Agricultural Exports, 2011

(in USD Billions)

Unrealized export potential agribusiness products [9.8% & $5B exports lowest in ASEAN comparators]

Low diversity of agricultural exports [coconut only product with over $1B market]

Expensive logistics and weak regulatory systems for agricultural production

PHILIPPINES

Strictly Confidential © 2014 3

Logistics?

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Relatively high domestic shipping costs

Origin DestinationDoor to door (local

currency)

Door to door

(USD)

Port to port (local

currency)

Port to port

(USD)

Destination port

domestic

throughput (MT)

Distance (NM) Door to door Port to portNumber of

operators

Malaysia

Kuala Lumpur Kuching 5,126 1,589 3,626 1,124 9,188,635 653 2.43 1.72 NA

Kuala Lumpur Kota Kinabalu 5,756 1,784 3,976 1,233 1005 1.78 1.23 NA

Kuala Lumpur Sandakan 6,176 1,915 4,576 1,419 1250 1.53 1.13 NA

1.91 1.36 NA

Philippines

Manila Cebu 36,000 827 26,150 600 18,169,471 404 2.05 1.49 4

Manila Cagayan do Oro 38,000 873 28,495 654 6,171,957 504 1.73 1.30 5

Manila Davao 44,000 1,010 33,320 765 4,081,487 829 1.22 0.92 5

Manila Iloilo 42,000 964 33,320 765 3,516,048 355 2.72 2.15 4

Average 1.93 1.47

Indonesia

Jakarta Pontianak 12,250,000 1,065 5,000,000 435 46,546,000 420 2.54 1.04 NA

Jakarta Makassar 9,500,000 826 5,300,000 461 11,335,000 762 1.08 0.60 NA

Jakarta Banjarmasin 10,500,000 913 6,300,000 548 7,642,000 579 1.58 0.95 NA

Jakarta Medan 9,500,000 826 6,000,000 522 7,303,000 861 0.96 0.61 NA

Jakarta Balikpapan 12,250,000 1,065 5,800,000 504 2,841,000 765 1.39 0.66 NA

Average 1.51 0.77 NA

Source: World Bank Group staff inquiries of various shipping firms.

Cost Freight cost per NM


Lack of market scale

5

Low overall throughput Multiplicity of routes


World Bank transport studies

Road network analyses Port network analyses


Domestic shipping regulation

Maritime Industry Authority

Vessel licensing

Philippine Ports Authority

LIBERALIZATION Port regulation

Coast Guard

Vessel safety

7


World Bank Group and DOTC: Encouraging

greater competition in domestic shipping

DOTC

MARINA

Process re-engineering

Regulatory reform

PPA

Regulatory reform

Database management

Border operations at

ports

8

CPC Expedite CPC

approval process

Remove distinction b/w

CPC types

Simplify CPC amendment

process

Cargo handling

Remove nexus b/w PPA revenue and

cargo handling charges

Maritime data

Improve information on cargo flows and

current services

Freely disseminate information to actual & potential market

participants

6 7 Pilot port

Quarantine & clearance

process

CPC Remove opportunity

for incumbents to object to granting of

CPC

Focus CPC conditions on quality

standards

SP Simplify approval for special permits for foreign vessels to

temporarily operate in domestic trade

Better access to imported vessels

Drydock

Remove requirement to drydock in the

Philippines

5

3

2

4

1


World Bank Group and DOTC: Encouraging

greater competition in domestic shipping

DOTC

MARINA

Process re-engineering

Regulatory reform

PPA

Regulatory reform

Database management

Border operations at

ports

9

CPC Expedite CPC

approval process

Remove distinction b/w

CPC types

Simplify CPC amendment

process

Cargo handling

Remove nexus b/w PPA revenue and

cargo handling charges

Maritime data

Improve information on cargo flows and

current services

Freely disseminate information to actual & potential market

participants

6 7 Pilot port

Quarantine & clearance

process

CPC Remove opportunity

for incumbents to object to granting of

CPC

Focus CPC conditions on quality

standards

SP Simplify approval for special permits for foreign vessels to

temporarily operate in domestic trade

Better access to imported vessels

Drydock

Remove requirement to drydock in the

Philippines

5

3

2

4

1


Certificate of Public Convenience

10

• Franchise permit to operate

• Required for every single service providing vehicle

• Specifies routes, ships and schedules

• Must be amended for every route, ship and

schedule change


ESPWEL

11


Streamlining the Vessel Licensing Procedure

Region Before April 2014 After April 2014

NCR 80 days 30 days

Ilocos, CAR, Cagayan

Valley

134 days 101 days

Tagalog Region 70 days 37 days

Bicol 148 days 93 days

Zamboanga Peninsula 70 days 36 days

Northern Mindanao 70 days 30 days

Average 95 days 54 days

Average Processing Time


Resulting reforms and private sector savings


AND THERE’S MORE!

14

Strictly Confidential © 2014 Overseas – Domestic Shipping 15

Combined Overseas Domestic Routes

• Philippine flagged vessels are not allowed to run combined routes

without special permits

• Creation of a single registry to facilitate overseas-domestic routes


Maritime Data Management System

16

Facilitating Data Exchange

MARINA-Focus: Capacity

Challenge: Vessel Registry

PCG-Focus: Safety

Challenge: Vessel Tracking

System

PPA-Focus: Infrastructure

Challenge: Port Traffic Data


Other pro-competitive regulatory reforms

17

• Foreign Co-Loading Act – implementing rules and

regulations

• Overseas repair and drydocking

• Terminal management operations

• Port services provision: tugboats, pilotage, trucking


Lessons from the maritime sector

18

More competition

• Despite legal deregulation, there remain certain regulations that benefit incumbents

• Numerous reforms can be conducted with regulatory and not legal reforms

Better decisions

• Data should be converted into information and disseminated to public and private stakeholders

• Better coordination among regulators is integral

Lower costs

• Streamlined regulations ease market entry, promote operational flexibility, improve competition and lower cost of operations


Competition Reforms in the

Maritime Transport Sector

AER NRG Members’ Meeting

Sept 2015

Competition Reforms in the Maritime Transport · PDF fileBorder operations at ... Tagalog...

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