Final Report Shipping Costs and Competitiveness in Northern Mindanao

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Shipping Costs and Competitiveness In Northern Mindanao 2

TABLE OF CONTENTS

1. Introduction

1.1 Background 01

1.2 Objectives 01

1.3 Study Area 02

1.4 Review of Relevant Studies 03

1.4.1 Master Plan Study of Cagayan de Oro 03

1.4.2 RORO for Mobility Enhancement 03

1.4.3 Master Plan for Strategic Ports in the Phils. 04

1.4.4 Metro Cagayan de Oro Road Network Development 04

1.4.5 Domestic Shipping Dev’t Project of the Phils. 05

1.4.6 The Cost of Exporting a Container from the Phils. 05

1.4.7 Phil. Logistics Study 05

1.4.8 Mindanao Logistics Infrastructure Improvement Project 06

1.5 Study Methodology and Approach

1.5.1 A Review on Government Infrastructure Initiatives 06

1.5.2 Collection and Review of Information from Past Studies 07

1.5.3 Conduct of Surveys & Interviews of Industry 07

1.5.4 Validation session and Survey Trials 08

1.5.5 Data Processing and Analysis 08

1.5.6 Completion of Actual Logistics Cost Structures 08

1.5.7 Report Writing 08

2. Logistics Conditions in Northern Mindanao

2.1 Infrastructures Logistics Conditions

2.1.1 Spatial Character of Northern Mindanao 09


A. Corridor 1. Eastern Misamis Oriental 10

B. Corridor 2. Western Misamis Oriental 11

C. Corridor 3. Eastern Bukidnon 11

D. Corridor 4. Western Bukidnon 13

2.1.2 Freight Corridor and Port Access

A. Corridor 2 and 4.CDO Port & MCT Road Access 14

B. Licoan Intersection (J. Pacana St.) 15

C. Osmeña Street Extension 15

D. Agora Road 17

2.1.3 Ports and Port Facilities 18

A. Port of Cagayan de Oro 18

B. Mindanao Container Terminal 20

2.2 Exports and Imports of Key Commodities 21

2.2.1 Movement of Commodities 21

A. Corridor 1. Eastern Misamis Oriental 21

B. Corridor 2. Western Misamis Oriental 22

C. Eastern Bukidnon 23

D. Western Bukidnon 23

2.2.2 Export and Import Volumes 24

2.3 Logistics Players in Northern Mindanao 29

A. Exporters (Shippers) 29

B. Truckers 29

C. Imports and Importers 29

D. Shipping Lines 30

E. Cargo handling Operators 31

2.4 Logistics Costs/Charges for Exports and Imports 31


2.4.1 Trucking and Hauling Rates 31

2.4.2 Brokerage and Facilitation Charges 33

2.4.3 Port Charges 34

2.4.4 Sample Logistics Cost of Exporters 35

3. Logistics Survey for Northern Mindanao 38

3.1 Survey Implementation 38

3.2 Profile of Survey Respondents 39

3.3 Results from the Survey 40

3.3.1 Shippers Survey 40

3.3.2 Importers Survey 44

3.3.3 Truckers Survey 46

3.3.4 Shipping Lines Survey 48

4 Issues and Measures 51

4.1 On the World Bank Report 51

4.1.1 Breakdown of Port Related Transport Costs 51

4.2 Costs and Charges for Shipping 51

4.2.1 Terminal Handling Charge and Other Surcharges 52

A. Findings 54

B. Legislation is Necessary 55

C. Other Shipping Surcharges 55

4.3 Transshipment 55

4.4 Port Operational Issues 56

4.4.1 Mindanao Container Terminal 56

4.4.2 Cagayan de Oro Port 56

4.4.3 Vessel Dues 57

4.5 Domestic Sea Freight 58


4.5.1 RORO 59

4.5.2 Freight Quotations and Rates 64

4.6 Trucking 64

4.6.1 Empty Backhaul 64

4.6.2 DOTC-LTO Fines/Penalties 65

4.6.3 DPWH Weigh Bridges 66

4.7 Harmony of Policies and Programs 66

4.7.1 DPWH-PPA Cargo Weight Policies 66

4.8 Securities, Clearance and Inspection Costs 68

4.9 Value Added Tax 68

4.10 Freight Equalization Scheme 69

4.11 Timely Policy Dissemination 69

5 Best Practices of Logistics Players 70

5.1 Exports and Exporters 70

5.1.1 One Stop Processing Centers 70

5.2 Trucking Industry 70

5.2.1 Water Brakes 70

5.2.2 24 Hour Delivery Service Provision 70

5.3 Customs Clearing 70

5.3.1 Value Added Service Provider (VASP) 70

5.3.2 Inspection Areas for Imported Items 71

5.4 Port Management 71

5.4.1 International Shipping and Port Security Code 71

5.4.2 Vessel Operations Commitments 71

5.4.3 Labor Unions 71

5.4.4 Vessel Tracking System 72


5.4.5 Port Revenues 72

5.4.6 Port Management Advisory Council (PMAC) 72

6 Way Forward 73

6.1 Institutional Coordination 73

6.2 Replicable Best Practices 73

6.2.1 One Stop Centers 73

6.2.2 BOC’s VASP 74

6.2.3 Maintaining Free Inspection Areas 74

6.2.4 Wharfage Discounts 74

6.3 Information Drive 74

6.4 Logistics Training 74

6.5 Business Support Organizations 75

6.5.1 NORMINSA 75

6.5.2 PhilExport 10A 75

List of Tables

Table 2.1 Some Difficult Road Sections by Corridor 13

Table 2.2 Corridor 1 Commodity Flow 21




Table 2.6 Comparative Shipping and Cargo Traffic, PPA 25

Table 2.7 Volume of Exports by Commodity 25

Table 2.8 Comparative container traffic for both ports in TEU 26

Table 2.9 Value of Exports 27

Table 2.10 Top Import Commodities for Northern Mindanao, 2009 28


Table 2.11 Northern Mindanao’s Exporters 29

Table 2.12 Importers for 2009 30

Table 2.13 Foreign Shipping Lines operating in Northern Mindanao 30

Table 2.14 Transshipment Cargo from Northern Mindanao 30

Table 2.15 Spot Market Trucking Rates for Containerized Cargo 31

Table 2.16 Shipping Lines Trucking Rates for Containerized Cargo 32

Table 2.17 Brokerage and Facilitation of Containerized Cargo 33

Table 2.18 Export and Import Processing Charges by Agency 33

Table 2.19 Comparative Arrastre Rates of Selected Phil. Ports 34

Table 2.20 Arrastre and Stevedoring Charges at MCT and CDO Ports 34

Table 2.21 Exporting Lumber through 40’ Dry Van 35

Table 2.22 Exporting a 40’ Refrigerated Van 36

Table 2.23 Transshipment Cost Components 37

Table 3.1 Survey Sampling 38

Table 3.2 Profile of Exporters and Importers Respondents 39

Table 3.3 Profile of Trucker Respondents 40

Table 3.4 Profile of Shipping Lines Respondents 40

Table 3.5 Outsourcing of Trucking Logistics by Shippers 41

Table 3.6 Trucking Share to Total Logistics Cost of Shippers 41

Table 3.7 Shipping Share to Total Logistics Cost of Shippers 41

Table 3.8 Evaluation of Quality of Infrastructure by Shippers 42

Table 3.9 Ranked Logistics Cost by Shippers 42

Table 3.10 Logistics Issues from Shippers 42

Table 3.11 Evaluation and Experiences of Selected Export Processes 43

Table 3.12 Perceived Evolution of Logistical Components by Shippers 43

Table 3.13 Freight Costs by Commodity of Exporters 43


Table 3.14 Assessed Port Charges by Importers 44

Table 3.15 Identified Difficult Import Procedures by Importers 45

Table 3.16 Good Practices to Improve Importation Process 45

Table 3.17 Ranked Importation Costs 46

Table 3.18 Actual Logistics Costs Incurred by Importers 46

Table 3.19 Assessed Road Conditions by Truckers 47

Table 3.20 Recommended Solutions for Road Improvements 47

Table 3.21 Identified Problems at Port by Truckers 48

Table 3.22 Ranked Operational Expenses of Trucking Firms 48

Table 3.23 Cargo Tariffs 49

Table 3.24 Rate Port and Freight Conditions by Shipping Lines 49

Table 3.25 Shipping Lines’ Port Operation Conditions 50

Table 3.26 Ranked Port Charges by Shipping Lines 50

Table 4.1 Comparative Breakdown of transport costs per TEU 51

Table 4.2 Cargo Handling activity & applicability of THC 52

Table 4.3 THC Rates 53

List of Figures

Figure 1.1 Study Area 02

Figure 2.1 Carmen Hill Section 11

Figure 2.2: Section of the Highway along Mangima Canyon 12

Figure 2.3: Hazardous Road Section: Mangima Canyon 12

Figure 2.4 Puerto-Bukidnon junction going to Carmen Hill 14

Figure 1.5: Difficult road sections leading to ports from Corridor 2 14 Figure 2.6 Osmeña Extension to the CDO Port 15

Figure 2.7 Motorela 16


Figure 2.8 Pedicab, locally known as Trisikad 16

Figure 2.9 The Cagayan de Oro Base Port 18

Figure 2.10 Vehicular Traffic at CDO Port Southern Gate 19

Figure 2.11 The Mindanao Container Terminal (MCT) 20

Figure 2.12 Export Volumes by Commodity, 2009 27

Figure 4.1 PPA reported CDO Port's Annual BOR was beyond 65% in 2009 57

Figure 4.2 Balingoan-Benoni RORO Vessel; Wing Vans ideal for RORO 59

Figure 4.3 Container Vans unloaded from a RORO/Pax Vessel 60

Figure 4.4 Workflow for CHA-RO (RORO/PAX) 61

Figure 4.5 Trailer Horse 63

Figure 4.6 Motorcab 66

Figure 4.7 MCT Weighbridges 67

List of Annexes

Annex 1.1 Presentation of Study Results to Relevant Stakeholders

Annex 1.2 Highlights of the Validation Meetings

Annex 3.1 Shippers Survey Form

Annex 3.2 Importers and Cargo Forwarders Survey Form

Annex 3.3 Truckers Survey Form

Annex 3.4 Shipping Lines Survey Form

Annex 4.1: Maersk Line THC Table

Annex 4.2 LTO Fines and Penalties

Glossary of Terms and Abbreviations

Acknowledgements

The Study Team

1. INTRODUCTION

1.1 Background

Despite the concentration of rich natural resources and vastly developing agriculture,

Mindanao falls far short of national averages in virtually many socio-economic

indicators. As far as the private sector (in Northern Mindanao) is concerned, the brunt

of the problem still lay on a disproportionate government spending in infrastructure

particularly in ports, farm to market roads and highways favoring other areas in the

Philippines. Access to agricultural production areas is constrained by poor road

infrastructure leading to large postharvest losses.

Mindanao’s distance to the traditional markets (mainly Manila) and exports is also a

major competitiveness issue since the logistics cost in bringing products to the

wholesale markets are high in terms of freight and associated costs. Mindanao

shippers for decades have complained of high domestic and foreign freight rates and

surcharges.

This has been a bane for Mindanao shippers as fewer international carriers call

Mindanao ports and domestic transshipment is too expensive as an option. Raw

materials, fertilizer and rice are Mindanao’s main imports.

There had been numerous studies undertaken and designed to alleviate Mindanao’s

logistics woes funded by both national entities and international donor agencies. So

as not to duplicate past transport and logistics studies, PhilExport 10A through the

assistance of USAID’s LINC EG Program opted to limit the study to Northern

Mindanao and take a closer look at issues in the logistics chain through the Cagayan

de Oro (CDO) base port and the Mindanao Container Terminal (MCT), being

Northern Mindanao’s most strategically located gateways.

1.2 Objectives

From the private sector’s point of view, the primary objective of this undertaking is to

establish an updated document on the state of competitiveness of transporting

selected key commodities from Northern Mindanao. The study objectives are, thus,

as follows:

a. Identify present and pressing transport-related issues detrimental to Northern

Mindanao’s competitiveness of selected export and import commodities;

b. Showcase the best practices on the different segments on the logistics chain,

aimed at reducing costs and maximizing efficiency;

c. Provide recommendations leading to policy changes in ports, shipping, road use

and infrastructure at all levels of government.


1.3 Study Area

Northern Mindanao consists of the provinces of Misamis Oriental, Camiguin,

Bukidnon, Lanao del Norte and Misamis Occidental as well as the cities of Cagayan

de Oro (CDO), Gingoog, Malaybalay, Valencia, Iligan Ozamis and Oroquieta.

However, focus will be on areas which contribute significant freight volume to the

ports of Cagayan de Oro (Macabalan) and Mindanao Container Terminal (MCT).

Figure 1.1 shows the spatial coverage of the study, which is divided into four

corridors for a more localized view of the logistics conditions and issues.

Legend:

Corridor 1: Eastern Misamis Oriental (green)

Areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR)1 East of

Cagayan de Oro (Tagoloan to Magsaysay, Misamis Oriental) going to Butuan City

Corridor 2: Western Misamis Oriental (blue)

Areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR), West of Cagayan de Oro (Opol to Lugait, Misamis Oriental) to include Iligan, Lanao del Norte & Misamis Occidental

Corridor 3: Eastern Bukidnon (orange)

Areas along the Sayre Highway from Cagayan de Oro to Quezon, Bukidnon

Corridor 4: Western Bukidnon (violet)

Areas along the Cagayan de Oro-Talakag Road including the town of Baungon, Bukidnon

1 Formerly known as the Iligan-Cagayan de Oro – Butuan Road (ICBR) per DPWH update

Figure 2.1 Study Area, Northern Mindanao


1.4 Review of Relevant Studies

The Government of the Philippines, as the principal entity, has conducted several

transport studies in the past funded by various donor agencies. Likewise, Business

Support Organizations (BSOs) in Northern Mindanao have conducted value chain

studies on different commodities but no study has been made recently looking

closely at the overall transport logistics of commodities especially exports.

The study not only refreshes the information on local logistics conditions but also

gives focus on the various transport modes such trucking, ports and shipping.

Relevant regulatory costs that impacts on the competitiveness of export commodities

from Northern Mindanao is also tackled.

There have been a number of studies for the improvement of the infrastructure,

transportation and logistics in Mindanao. Relevant studies are as follows:

1.4.1 Master Plan Study for Cagayan de Oro - Iligan Corridor Special

Development Project, 1992

The Laguindingan Airport Development Project (LADP), upgrading of existing

seaports and the establishment of the Mindanao Container Terminal (MCT) are

among the key infrastructures identified for development. Likewise, major road

development projects were also proposed.

Most of the major infrastructure projects identified in this study are currently either in

place or in the pipeline. Implementation status of some of the projects require updating.

It is also noted that some of the road and component projects saw delayed completion

such as the new RCDG Tagoloan Bridge; the Cagayan de Oro 3rd Bridge and By-pass

road crossing the Cagayan and Iponan Rivers to Opol, Misamis Oriental.

1.4.2 RORO for Mobility Enhancement, November 2007

This study highlights the need for a more efficient Roll-on roll-off (RORO) system for

the country, linking the existing RORO systems already in place in Northern

Mindanao (e.g. CDO-Cebu; Balingoan-Camiguin-Bohol).

The study recommends institutional strengthening and development of the Roll On-

Roll Off Transport System (RRTS) by authorizing eight Strong Republic Nautical

Highways (SRNH) as a National Project. The study encourages institutionalizing

SRNH by establishing an SNRH project management office.

This mechanism will not just oversee existing developments but also future

developments on RRTS, through periodic surveys to update the program’s

development. The study also encourages the need for a sustainable procurement of

RORO capable ships.


This study includes a plan to establish a RORO terminal for international cargo in the

port of Cebu. In Northern Mindanao, transshipment of some export container

cargoes is expected via Manila or Cebu through the RORO system.

1.4.3 Master Plan for Strategic Ports in the Philippines, January 2004

This study aims to develop a master plan for major seaports in the country as well as

develop a 5-year and 25-year development strategies for priority ports including the

Cagayan de Oro base port. Northern Mindanao was identified as high priority for

immediate and long term development.

The study recommends installing additional equipment at the CDO Port, mainly a

Quay crane, establishment of additional 500-meter berth and support facilities for

bulk cargo and improvement of RORO facilities.

Further, the study recommends that PPA to amend its port tariff from GRT/day to

meter/hour basis, introduce lease contract with terminal operator with fixed and

variable tariff, simplify port procedures, introduce the Port EDI System/Single

Window System and improve port security measures.

Most, if not all, of what was recommended in this study has already been implemented

by the PPA or by its cargo handling operator for the Port of Cagayan de Oro.

The Quay crane was installed and commissioned in early 2005, 250-meters of the

proposed 500-meter additional berth is already established in 2009 with back-up

facilities including depot for liquid bulk (molasses), improved port procedures had

obvious positive results and in 2009 and PPA invested on emergency response

equipment (e.g. first aid, fire fighting), as well as close circuit television (CCTV)

system for security.

1.4.4 Metro Cagayan de Oro Road Network Development Master Plan, 2004

This is a detailed study of Cagayan de Oro’s road network including those of the city’s

neighboring towns. Several road and bridge projects were initially identified for

development or improvement by the respective Local Government Units (LGUs) and

DPWH. However, only four (4) projects were found to be feasible by the study namely:

1. CDO Western Coastal Road (from Kauswagan, Cagayan de Oro City to

Igpit, Opol, Misamis Oriental) linking the CDO 3rd Bridge from Kauswagan

to Julio Pacana Street as major alternate for west bound traffic from the

CDO base Port.

2. The JR Borja Extension Road connecting the Central business district

mainly Cogon Market to BCIR in Gusa, Cagayan de Oro City.


3. Proposed CDO 7th Bridge and approaches between the Gov. Ysalina

Bridge (at Carmen) and the Emmanuel Pelaez Bridge (CDO 3rd Bridge) in

Barangay Taguanao.

4. CDO West Diversion Road connecting Masterson Avenue (near SM City

CDO) and the ICBR in Barangay Bulua, Cagayan de Oro through

Barangay Canitoan.

All the recommendations of this study have already been implemented. the CDO

Western Coastal Road which is currently being implemented is experiencing

delays caused by right-of-way acquisition.

1.4.5 Domestic Shipping Development Project of the Philippines, 2004

This study highlights the feasibility of an efficient RORO system in the country.

Further the study highlights the contestability of cargo handling services, resolution of

port labor issues leading to port privatization. The study also reviewed the

deregulation policies in the shipping sub sector.

1.4.6 The Cost of Exporting a Container from the Philippines Study 2007

This study was a joint effort between the Export Development Council (EDC) and

Phil. Chamber of Commerce and Industry (PCCI) and the Phil. Exporters

Confederation (PHILEXPORT).

The study aimed to validate the cost of exporting a container from the Philippines and

Identify areas for possible cost reduction, in light of the 2006 World Bank-IFC “Cost

of Doing Business” Report, particularly on Cross-Border Trade where the Philippines

was ranked highest in terms of cost in exporting compared to other ASEAN countries

like Thailand, Vietnam and Indonesia. The study also proposed for the passage of

the Omnibus Maritime Code.

1.4.7 Philippine Logistics Study, November 2002

The study provided a detailed supply chain analyses for key agricultural commodities

from Northern Mindanao. It recommended policy reforms such as rationalizing PPA’s

role as regulator and manager of public ports, deregulation of domestic shipping and

shipping rates, lifting of the cabotage law, revocation of Executive Order 59 (creation

of a single entity from various stakeholders to manage cargo handling operations in

public ports), and campaign against corrupt practices on the road.


1.4.8 Mindanao Logistics Infrastructure Improvement Project August, 2009

The study aimed at looking for ways in maximizing the utilization of the Mindanao

Container Terminal as the country’s “Southgate” for both domestic and international

cargo. The study provided a detailed description of Northern Mindanao’s shipping

system, as well as the various supply chains of major agricultural commodities of

Mindanao, especially export winners such as fresh fruits pineapple & banana, coconut

as food and vegetable oil, including promising commodities such as vegetables.

The study also reinforced government’s plans and programs for agriculture and farm-

to-market road development which will integrate, improve, and increase productivity

and flow cargo.

Apart from other recommendations, the study highly recommends for additional

official development assistance on the following:

1. Establishment of a “Container highway” leading to MCT and CDO Port;

2. Establishment of RORO traffic for CDO/MCT and Batangas Port;

3. Additional market researches with focus on the cold chain to encourage

more production of other crops such as vegetables;

4. Establishment of an agribusiness center (patterned after the Makubetsu

Agricultural Coop in Hokkaido, Japan); and

5. Expansion of MCT.

On the whole, these enumerated studies highlighted Northern Mindanao’s logistical

problems and possible solutions. The study however barely touched on the transport

cost structure of Northern Mindanao’s exports and imports.

1.5 Study Methodology and Approach

The study was conducted from December 2009 till April 2010. The following activities

took place:

1.5.1 A review on government’s infrastructure initiatives:

a. The region’s infrastructure development and improvement programs

The data secured for this study were the materials presented by government

agencies during the Mindanao Logistics Conference held last November 25-

26, 2009. While the Medium Term Philippine Development Plan (MTPDP) is

the best basis for government programs and initiatives.


b. Transport policies and enforcement

Transport and shipping policies were gathered from various government

offices and companies mainly through online information (to ensure said

policies are already for public consumption). The team also secured other

related policies during mutli-sectoral activities like the CIQS (Customs-

Immigration-Quarantine and Security) Northern Mindanao Consultative

Committee, the Regional Development Council (RDC) and during other

consultations by these respective agencies. PhilExport-10A has also

compiled policies issued over the years. These policies are in the form of

memo circulars, enacted laws and implementing rules and regulations,

department orders and the like.

1.5.2 Collection and review of information from past studies and official data

from government agencies and local governments, which include:

a. Export data from the Bureau of Customs (BOC) and the Department of

Trade and Industry (DTI)

b. Import Data from the Bureau of Customs and the Philippine Ports

Authority (PPA)

c. Port Statistics from PPA offices and from the Philippine Veterans

Investment Development Corporation (PHIVIDEC) Industrial Authority

d. Socio-economic information from the Department of Trade and Industry

and the National Economic and Development Authority

1.5.3 Conduct of surveys and interviews of industry key players and some

government officials in the region.

The surveys were undertaken from February till end of March 2010. The target key

players and participants were:

a. Shippers - exporting PhilExport10A members and other exporters.

b. Truckers - PhilExport member service providers and members of the

Cagayan de Oro Port Truckers’ Association as well as other independent

truckers.

c. Shipping Lines - foreign shipping lines calling the ports of Cagayan de Oro

(CDO) and Mindanao Container Terminal (MCT), domestic shipping lines

and Non-Vessel Operating Common Carriers (NVOCCs).

d. Cargo forwarders and importers - especially companies importing raw

materials for export.


e. OROPORT Cargohandling Services, Inc.; the cargo handling operator of

CDO Port and the Mindanao International Container Terminal Services,

Inc. (MICTSI), the terminal operator of MCT.

Most of the survey sheets were hand delivered with priority given to PhilExport 10A

members while the others were either sent through courier, fax or email (as

requested by the target respondents).

1.5.4 Validation session and survey trials

The survey questionnaires were drafted early January. A trial survey was conducted

on January 14, 2010 which provided feedback in improving the survey mode and

survey instrument.

1.5.5 Data processing and analysis

Data collection and processing were done as soon as each data was secured

especially for survey sheets. Follow-ups of respondents were done on a daily basis.

Most survey target respondents had problems completing the survey sheets due to

the daily power interruptions and their need to maximize power availability. Others

were apprehensive to respond, fearful of compromising business positions.

1.5.6 Completion of actual logistics cost structures based on transport cost

standards

While the survey sheets provided questions on the cost components, separate

interviews with key respondent companies (either their managers or their

import/export staff) were done to ensure that these data were secured.

1.5.7 Report writing

This final activity documents all interpretation and findings of the study. Study results

and recommendations are presented and validated during the stakeholders’ meeting

on April 6, 2010. The attendance list of said meeting is attached as Annex 1.1 and

the presentation material is shown in Annex 1.2.


2 LOGISTICS CONDITIONS IN NORTHERN MINDANAO

2.1 Infrastructure Logistics Conditions

2.1.1 Spatial Character of Northern Mindanao2

Northern Mindanao is bounded on the North by Bohol Sea; on the South by Lanao

del Sur and North Cotabato; on the West by Zamboanga provinces; and on the East

by Agusan Provinces and Davao.

The region consists of five provinces composed of the landlocked province of

Bukidnon in the south; Misamis Oriental in the north; the island of Camiguin in the

northeast; Lanao del Norte and Misamis Occidental in the west; the cities of Cagayan

de Oro, Gingoog, Iligan, Malaybalay, Valencia, Ozamis, Oroquieta, and Tangub; a

total of 85 municipalities, 11 Congressional districts, and 2,020 barangays.

The total area of the region is 2,018,617 hectares with a population of about

4,846,579 with an average annual growth rate of 2.4%. Population density in the

rural areas is 1,193.05 per square kilometer, while in urban areas; it is 4,685.37 per

square kilometer.

Bukidnon has vast agricultural resources which are highly suitable for most types of

crops like corn, rice, vegetables crops, fruits and other commercial crops such as

abaca, coffee, rubber and sugarcane. Moreover, livestock, poultry and dairy are also

produced in large quantities in the province supplying the needs of neighboring

provinces and cities. It is the region's food basket and primary supplier of raw

materials for processing in the various agri-industrial centers of the region.

Misamis Oriental is also an industrial hub of the region. It is home to the regional

capital, Cagayan de Oro hosting a regional airport, international seaports, first class

hotels and variety of agri-based and other manufacturing industries.

The island of Camiguin is a place of unspoiled beauty, white sandy beaches, clear

mountain springs and waterfalls and rustic old world charm. Camiguin is the perfect

place for tourism adventures.

Misamis Occidental, a place of natural beauty, wetlands, unspoiled forests and rich

fertile soils. It is one of three major prawn, shrimp and squid spawning grounds in

the Philippines. It is the base for most of the region’s aquaculture industries.

Lanao del Norte is the newest province added to the Northern Mindanao region. The

province used to belong to the Central Mindanao region. The province is traversed by

several rivers, the most important of which is the Agus River which feeds the Maria

Cristina Falls and is a major source of hydroelectric power for the Mindanao Grid.

2 Northern Mindanao Socio Economic Profiles from NEDA-10, DTI-10, DA-RFU 10


Physically, the region enjoys distinct advantages over other areas in the country. It is

geologically a combination of plains, mountains, rolling hills, and coastal areas. It has

fertile soil, abundant minerals and forest and aquaculture resources.

The region serves as the gateway to and from the rest of Mindanao, linking this

resource-rich island to the rest of the country and the world via its relatively modern

seaport, airports, and an extensive arterial road network. It is located outside the

typhoon belt and enjoys a climate that is favorable to agriculture and industrial

activities.

The study area is grouped into four corridors based on the locations of the cities,

municipalities, road network, and industries for a better grasp of its spatial and

transport attributes. The corridors are as follows:

Corridor 1: Eastern Misamis Oriental

Areas along the Butuan -Cagayan de Oro – Iligan Road (BICR)3

East of Cagayan de Oro (Tagoloan to Magsaysay, Misamis Oriental) going to Butuan City

Corridor 2: Western Misamis Oriental

Areas along the Iligan-Cagayan de Oro – Butuan Road (ICBR) West of Cagayan de Oro (Opol to Lugait, Misamis Oriental) to include Iligan, Lanao del Norte & Misamis Occidental

Corridor 3:Eastern Bukidnon

Areas along the Sayre Highway from Cagayan de Oro to : Quezon, Bukidnon

Corridor 4: Western Bukidnon

Areas along the Cagayan de Oro-Talakag Road including the towns of Baungon, Bukidnon

A. Corridor 1: Eastern Misamis Oriental

It is one of the region’s largest coconut-producing areas with the presence of small to

large coconut-based industries. Corridor 1 is also the home of the PHIVIDEC

Industrial Estate along Tagoloan and Villanueva in Misamis Oriental, hosting 29

manufacturing companies and 62 service firms. The two-lane coastal highway is

also the major artery that connects Cagayan de Oro City to the agricultural provinces

of Surigao del Norte, Agusan del Norte, Agusan del Sur, Surigao del Sur, through

Davao del Norte to Davao City.

The highway stretches 170 kilometers to Butuan City and is in fairly good condition

with periodic maintenance by DPWH. Laden cargo trucks take approximately five

hours to bring cargoes from Butuan to Cagayan de Oro Port or to MCT.

3 Formerly known as Iligan – Cagayan de Oro – Butuan Road (ICBR)


Figure 2.1 Carmen Hill Section, between Puerto, Cagayan de Oro & Ala-e, Manolo Fortich, Bukidnon

B. Corridor 2: Western Misamis Oriental

This coastal highway connects Cagayan de Oro City to the cities of Iligan, Ozamis,

Dipolog, Pagadian and Zamboanga. The Cagayan-Iligan link was developed in the

1970’s and is fairly in good condition with concrete re-blocking undertaken last year.

Owing to its relatively flat terrain, this road probably carries the heaviest cargo loads

comprising of steel, cement and wood products.

Along this very important stretch of national road is the soon to be operational

Laguindingan International Airport. Though current airfreight export volume

contribution is negligible, improving and protecting this road section is of vital

importance as the airport’s international status is expected to attract cargo traffic.

C. Corridor 3: Eastern Bukidnon

Sayre Highway is the portion of the Philippine national highway that starts from

Puerto, Cagayan de Oro City to Kabacan, North Cotabato passing through the

province of Bukidnon. This also connects Cagayan de Oro to Davao via Buda road

which was completed in early 2000 and shortens the north-southeast transit time for

both cargo and commuters.

The Sayre Highway though paved predominantly by asphalt traverses sections with

deep ravines and cliffs such as the Manolo Fortich Section, Mangima section and

Damay pass. Accidents involving hauling trucks carrying various Bukidnon products

are common occurrences along this stretch of national road. The hazardous road

sections are shown in Figures 2.1 and 2.2.

Carmen Hill is one of

the most difficult

sections along Sayre

Highway and serves as

the main trunk to and

from the province of

Bukidnon. Carmen Hill

section is a narrow two

lane road, winding and

steep. A short section

has been recently

rehabilitated but was

not widened. The peak

hour traffic volume at

this section was

around 500 vehicles

per hour. As vehicles

cannot gain

momentum due to congestion, vehicles are reduced to a crawl of approximately five

kilometers per hour. This is a “no passing” section but faster vehicles will always try

to overtake laden trucks which poses danger to motorists.


Figure 2.3: Hazardous Road Section: Mangima Canyon

Mangima Canyon is dubbed as the

Kennon Road of the South and the

Purple Heart Canyon by American

Veterans. the zigzag road of Mangima

Canyon at Manolo Fortich awes visitors

who visit the place with its naturally

scenic spot. The road along the Sayre

highway however is a narrow two lane

winding and steep affair and is also the

site of hundreds of accidents. This has

been considered as the most

dangerous of the entire Sayre highway

stretch.

This section is unlit at night and

chevron directional highway signs have been stolen. A signage with the warning

“Watch out for falling rocks ahead” warns motorists of numerous dangers ahead.

There is Department of Public Works and Highways (DPWH) “Rest Area” where

motorists can cool their brakes and enjoy the fabulous view.

Figure 2.2: Section of the Highway along Mangima Canyon


D. Corridor 4: Western Bukidnon

The Cagayan-Talakag road is two lane concrete built and completed in early part of

2000. Except for a few steep and winding sections, this road is in good condition and

traffic is sparse.

Cargoes truck using this corridor encounter traffic congestion and road friction upon

descending from Carmen Hill (west side from SM Mall), with merging traffic at the

CDO 2nd bridge. Traffic is heavy along Vamenta Boulevard up to Liceo de Cagayan

University before taking a left to Marcos bridge. This vital corridor is also used

currently for the Lumbia airport commuter and cargo traffic. At present the airport is

utilized for domestic passenger and cargo only. The list of difficult road sections is

given by corridor in Table 2.1 as enumerated by the truck operators and drivers.

Table 2.1 Some Difficult Road Sections by Corridor

Location Est. length (Kms.) Corridor 1: Eastern Misamis Oriental 26

Puerto-Bukidnon Junction 1 Binuangan to Sugbongcogon 4 Medina Brgy. Maanas 2 Medina, New Mananom to Fiesta Brand 3 Gingoog, Crossing Bal-ason to Anakan 3 Lambuyog Bridge to Artadi 6 Kibunsod to Carmen 6

Corridor 2: Western Misamis Oriental 3.5 Marcos Bridge and approaches 2 Bulua Section 1.5 Iligan City Diversion NA

Corridor 3: Eastern Bukidnon 32 Carmen Hill 5 Diclum 3 Lingion to Mangima 4 Dalirig to Maluko Zigzag 5 Maluko to Kulaman Bridge 1.5 Damay Pass to San Vicente 4 Impasug-ong to Kapitan Bayong 4 Impalutao to Stock Farm 0.5 Patpat to Malaybalay 4 Malaybalay Diversion Road NA

Corridor 4: Western Bukidnon 11 kms. (Roads) 120meters (bridges) To Baungon Airport to Maasin 1 Maasin Baily Bridge 0.08 Maasin to Imbatug NA (unpaved) Kamatayan section 1 Lipatunan Wooden Bridge 0.03 To Talakag Makahambus Cave to Mambuaya 4 Dansolihon to Langawan 2 Langawon to Menzi 3 Lapok-Talakag to Dominorog NA (unpaved)

Source: Truckers’ Survey and Truck Drivers’ Interview. The terrain road geometry along these sections forces trucks

to reduce to low speed of 20 km/hour or lower.


2.1.2 Freight Corridor and Port Access

A. Corridor 2 and 4: CDO Port and MCT Road Access

The most vital section of the

Butuan-Cagayan-Iligan road for

road freight stretches from the

municipalities of Laguindingan in

the west (the site of the new

international airport) to Jasaan in

the east of Cagayan de Oro City.

Corridor 2 export bound cargoes will

have to pass through Cagayan de

Oro (CDO) going to Mindanao

Container Terminal (MCT) and

would encounter urban vehicular

traffic. The most critical sections of heavy traffic concentration and roadside friction

are the following: - Bulua section

- Marcos bridge

- Licoan intersection

- Gaisano-Nazareno Church section

- Corrales intersection

- Osmeña intersection

- Limketkai intersection (un-signaled)

- Agora intersection

- Puerto intersection (un-signaled)

For cargoes from corridors 1 and 3 with the port of Cagayan de Oro as destination

point, the critical sections are: - Puerto intersection

- Agora intersection

- Agora road leading to CDO port South

entrance gate

- Limketkai intersection and Mindanao

University for Science & Technology gate

- Corrales intersection and Corrales

extension

- Corrales extension -Gaabucayan

intersection

- Gaabucayan-Corrales Street

extension intersection

Figure 3.5: Difficult road sections leading to ports from Corridor 2

Figure 2.4 Unsignalled Puerto-Bukidnon junction


The roads are shared by several road users, mainly private cars, trucks, motorela,

jeepneys, taxis and buses. There are no comprehensive statistics reported by

Northern Mindanao road agencies regarding traffic levels on the roads and the

composition of total traffic by vehicle class. As trucks and buses occupy more road

space than cars, the contribution of trucks to congestion can be greater than their

share of traffic.

B. Licoan Intersection (J. Pacana Street)

Cagayan de Oro Port is currently accessed by J. Pacana Street from the west turning

left after crossing the Marcos bridge. The road is a 16 meter concrete with asphalt

overlay and has been recently rehabilitated up to the corner of Gaabucayan street.

Road widening from the crossing of Mendoza street to the corner of the port access

road has not helped ease traffic as these are used by cargo trucks as parking

spaces.

Traffic flow from the highway is smooth unless a gridlock occurs at the un-signaled J.

Pacana-Gaabucayan intersection. Intermittent effort by local traffic management

officials has not eradicated trisikads from using this road and illegal parking by cargo

trucks and trailers. Near the port access, are warehouses that use the road to load

and unload cargo and queuing trucks waiting to be allowed entry into the Aboitiz

Transport system container yard or trucks loaded with corn grains waiting for buyers

and weighing at a nearby weighbridge.

When the access road leading to the 4th bridge connecting Puntod and Kauswagan is

completed, port related traffic to/from the west can utilize this route and relieve

Marcos bridge from some of its excess traffic volume. Even after the opening of 4th

bridge, Marcos Bridge will be remaining as a bottleneck of the City, and adjacent

section of road networks at both side of river bank will be still suffering serious traffic

problem.

C. Osmeña Street Extension

Osmeña Street Extension is the second

most important access road to the port

from the east turning right from Iligan-

CDO-Butuan Road. This section is four

lane concrete road with narrow

shoulders. The approach from the

highway is by a sharp right turn. Trucks

turning right into Osmeña extension

from the east occupy the middle lane of

the three lane highway to be able to

negotiate the sharp turn. The left lane

vehicles are always in danger of being

crushed.


Figure 2.8 Pedicab, locally known

as Trisikad

The left lane is oftentimes occupied by passenger jeeps loading and unloading

passengers leading to the intersection.

After turning from the highway, only one of the two lanes of Osmeña extension can

be used as private cars and unserviceable vehicles occupy the right lane as

parking/garage. The opposing two lanes is also tight as unserviceable vehicles,

illegal parked trucks, motorelas and debris occupy part of the road and most of the

sidewalk.

A few meters further is Fiesta Grocers where its delivery trucks are either queuing

along the road or trying to maneuver entry into the store’s narrow truck bays, thus

impeding traffic flow.

Traffic along this important stretch of road is

further aggravated by delivery trucks of Coca

Cola Bottlers which use this road as

queuing/parking area. At times, as much as 20

trucks can be seen parking on both sides of

the road carrying Coca Cola bottles for

delivery to the plant located along the

highway. Coca Cola have not provided parking

for these delivery trucks.

Some other obstructions include a barangay

outpost, appropriation by some businesses of

the sidewalks, and illegal structures.

Delivery trucks that use roadsides as parking and queuing areas are not owned in this

case by either Coca Cola Bottlers or Fiesta Grocers as these are operated by third

party logistics providers. However, companies with high cargo volume and daily truck

traffic should provide these delivery trucks with proper parking and waiting areas and

not burden the public by using public roads as private convenience parking.

Cargo trucks will then turn right from Osmeña street extension to Gaabucayan street

before turning right to Corrales street extension leading to the port. This intersection

is un-signaled and can often result in gridlocks. This is also used by motorelas and

trisikads (pedicabs).

Along Gaabucayan Street are structures that impede

traffic flow such as a vulcanizing shop, a car repair

shop that occupied the sidewalks and a store

constructed on the sidewalk.

Before reaching the port gate, Cagayan de Oro

Construction Supply is also using the road along

Corrales Street Extension to load and unload its

cargoes and the road shoulders as open warehouse.

These impede traffic flow with forklifts using the road

to load and unload cement, plywood and steel bars.

Motorelas and trisikads are also allowed on this road.

Figure 2.7: Motorela


D. Agora Road

The most strategic and most preferred route from the east is the Agora road turning

right from the Butuan-CDO road. This has not been made feasible as Agora road has

turned into a free for all section. Illegal parking, sidewalk vendors, illegal structures,

vulcanizing shops, vegetable stalls, used clothing stalls, etc. has congested the road

that truckers have shunned using it. This is aside from trucks unloading agricultural

produce, trisikads sharing road space with passenger bus that calls Agora as its

primary eastbound terminal.

Non containerized trucks such as those carrying rice, corn, sugar are also facing

risks of pilferage when using this road. The four lane section with a median divider

has been turned to a one lane affair due to illegal parking and illegal structures. Lack

of traffic enforcement has made this road unfriendly to trucks delivering or

withdrawing cargoes to and from the port.

This is most ironic as this road leads directly to the southern gate of the port of

Cagayan de Oro where the port’s weighbridge is located. The port’s southern gate is

its most important entry point (see Figure 2.9).

For its credit, PPA has opened the port’s main gate for the entry of cargo trucks.

However, trucks that needs to be weighed needs to go through Agora gate for

weighing.


2.1.3 Ports and Port Facilities

Northern Mindanao boasts of two modern international port facilities with a combined

potential capacity of 500,000 TEUs of containerized cargoes. A brief description of

both these commercial ports is given below.

A. Port of Cagayan De Oro

The port of Cagayan de Oro is the biggest port in Mindanao with a total berth length

of 1,200 linear meters and over 23 hectares of back up area and container yards (a

50 meter wharf extension and 4,500 square meters of reclaimed back-up area is

being planned for implementation this year). Mindanao’s traditional gateway is a

multi-purpose port catering to domestic as well as import/export cargoes. It is also

capable of handling containerized, bulk, liquid bulk, general and break bulk cargoes,

passenger and RORO vessels. In 2008, CDO Port cargo handling operator

established a cold storage facility with a capacity of 100,000 boxes of fresh banana

and pineapple for export markets exclusively used by Del Monte Fresh International.

The Cagayan de Oro port has an annual potential capacity of at least 300,000 TEUs

of containerized cargo and at least four million tons of general, bulk, liquid bulk and

break bulk cargoes. The port is also equipped, as part of its cargo handling fleet, the

following: (i) 1 unit of ship to shore gantry crane; (ii) 2 units of 45-ton reach

stackers; (iii) 2 units 45-ton toplifts; (iv) 7 units 25-ton forklifts; (v) 43 units of 3-

ton forklifts; and (vi) 14 units 1.5-ton electric forklifts, etc.

Figure 2.9: The Cagayan de Oro Base Port


island

Island

Okay-Okay Area

I s l a n d

Metro Bank

ORORAMA

Island

Island

AgoraMarket

Bus Terminal

BusTerminal

ProposedOkay-okay

Area(Underutilized Road)

PPA Agora Gate

To Gaabucayan Road

Fish Landing (Busy only in early morning)

Vehicular Flow

ACTUAL VEHICULARFLOW

Okay-okayArea

Figure 2.10 Vehicular Traffic at CDO Port Southern Gate


Figure 2.11: The Mindanao Container Terminal (MCT)

B. Mindanao Container Terminal

The Mindanao Container Terminal

(MCT) at the PHIVIDEC Industrial

Estate, Tagoloan, Misamis Oriental

was originally conceptualized to

maximize Northern Mindanao's

potential as the Philippines' southern

gateway, catalyzing Northern

Mindanao's role as domestic food

basket and agri-industrial exporter.

The MCT has been identified as a

Mindanao flagship project, one of the

key infrastructure envisioned to jump

start the island's economic potential.

The MCT was conceived to fill the

supply gap for an efficient cargo

handling facility with its state of the

art facilities and cargo handling

equipment, It has been designed to

be exclusively operated for fully-

containerized and semi-containerized

domestic and foreign vessels with an annual capacity of 270,000 twenty equivalent

units (TEUs) with a 9.4-hectare container yard.

The port was privatized in 2008 and is now operated as a subsidiary of the

International Container Terminal Services, Inc., (ICTSI).

The berth length of the port measures 300 meters and 13 meter draft. It can

accommodate container vessels up to 30,000 DWT. Port facilities include 2 quay-

side gantry cranes and four rubber-tired gantry cranes and 262 reefer outlets.


2.2 Exports and Imports of Key Commodities

2.2.1 Movement of Commodities

The flow of commodities by type is segregated by corridor as described below.

A. Corridor 1: Eastern Misamis Oriental

These are coastal areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR) East

of Cagayan de Oro, covering the towns of Tagoloan, Villanueva, Jasaan, Balingasag,

Lagonglong, Salay, Binuangan, Sugbongcogon, Kinoguitan, Balingoan, Talisayan,

Medina, Magsaysay and Gingoog City in Misamis Oriental, going to Butuan City in

the CARAGA Region.

It is one of the region’s largest coconut producing areas with the presence of small to

large coconut-based industries. It is also the major link to other raw material sources

from Camiguin Island and CARAGA such as wood and mineral ore. Table 2.2 gives

the origin and destination of export and import commodities.

Table 2.2 Corridor 1 Commodity Flow In-bound Raw Material Source

Fertilizers Imported from other countries Grains Imported & other areas in Mindanao via Corridor 3 Fresh Coconut Local and some from other areas of Mindanao Copra Local and some from other areas of Mindanao Crude coconut oil Corridor 2 and other areas of Mindanao Fresh fruit Corridor 2 and other areas of Mindanao Milk powder Imported from other countries

Agricultura

l P

roduct

s

Aquamarine products Corridor 2 Resins Imported from other countries Steel products Imported from other countries and from Corridor 2 Petrochemicals Imported from other countries

Indust

rial

pro

duct

s

Packaging materials Imported from other countries

Iron ore Imported from other countries Silica Imported from other countries

Min

era

ls

Lime Corridor 3

Forest Products – Logs Other areas in Mindanao

Out-bound Commodity Main Markets Coconut: Desiccated, coconut cream, frozen chunks, coco sugar World-wide Aquamarine: Prawns Japan Fresh fruit: pineapple & banana World-wide F

ood

Processed: canned/dried/cooked fruit, raw sugar World-wide Coconut: Oleo chemicals, charcoal, fiber & coconut oil World-wide Industrial: Sintered ore, Fiber-reinforced plastics, finished rubber,

silicon metals, activated carbon Japan and Europe

Indust

rial

Iron & Steel: Tin cans, metal scraps Asia

GTH: Handmade paper USA & Europe Minerals China Wood: Lumber & furniture components China & USA

Resourc

e-

Base

d

Others: Pineapple & Sugarcane by-products, raw rubber Europe & Asia

Source: Compiled from DTI, PhilExport and BOC data, 2009.


B. Corridor 2: Western Misamis Oriental

These are areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR) West of

Cagayan de Oro. It covers the towns of Opol, El Salvador, Alubijid, Laguindingan,

Gitagum, Libertad, Initao, Naawan, Manticao and Lugait in Misamis Oriental, Iligan

City and the coastal areas of Lanao del Norte namely: Linamon, Kauswagan,

Bacolod, Maigo, Kolambugan, Tubod, Lala and Kapatagan. This road stretch

connects the region with other major agricultural producing areas of Misamis

Occidental (via RORO between Ozamis City and Kolambugan) and the Zamboanga

Peninsula.

Iligan is considered the industrial city of the south as it is home to 17 large

manufacturing companies.

Similar to Corridor 1, the area also has its share of perennial heavy rainfall during the

wet season, destroying some bridges along the BICR, especially along the Lanao del

Norte Stretch and flooding between the El Salvador and Alubijid in Misamis Oriental.


Fertilizers Imported from other countries

Grains (and wheat) Imported from other countries & other areas in Mindanao

Fresh Coconut Local and from other areas in Mindanao

Copra Local and from other areas in Mindanao

Agricultura

l

Pro

duct

s

Tapioca Starch Corridor 3 & 4 and other countries

Steel products Imported from other countries

Petrochemicals Imported from other countries

Clinker Imported from other countries

Indust

rial

Pro

duct

s

Packaging materials Imported from other countries

Forest Products - Logs Other areas in Mindanao

Out-bound Commodity Main Markets

Coconut: Coconut vinegar USA

Aquamarine: Prawns Japan

Food

Processed: Banana chips World-wide

Coconut: Charcoal, fiber & coconut oil World-wide

Industrial: Cement Japan and Europe

Indust

rial

Iron & Steel: hot rolled coils, cold rolled coils, metal scraps Asia

GTH: Handmade paper; wooden toys USA, Europe & Japan

Minerals: copper and chromite ore China

Wood: Lumber China & USA

Resourc

e-

Based

Others: Abaca pulp, rubber cup lumps Europe & Asia



C. Corridor 3: Eastern Bukidnon

Areas along the Sayre Highway from Cagayan de Oro to the towns of Manolo

Fortich, Impasug-ong, Maramag and Quezon, Bukidnon, including the cities of

Malaybalay and Valencia. Bukidnon is known as the food basket of Northern

Mindanao.

Large plantations and contract farms of fruit, vegetables and livestock are located

along these areas. Irrigation facilities are in place with enough water supply for year-

round agricultural production.

Similar to Corridors 1 and 2, the area is also perennially visited by heavy rainfall

during the wet season, affecting agricultural production despite technologies and

techniques applied on ground.



Grains Imported from other countries & other areas in Mindanao

Agricultura

l

Pro

duct

s

Feeds Imported from other countries & other areas in Mindanao

Industrial -Packaging materials Imported from other countries

Resource-based - Raw Rubber Local and from other areas in Mindanao


Fresh fruit: Pineapples & Bananas World-wide

Raw sugar Asia

Food

Processed: Frozen fruit Japan

Industrial: rubber boots Japan and Europe

GTH: handbags and home décor USA, Europe & Japan

Cut flowers (via air) Asia

Mineral: Copper ore China

Wood: Lumber China & USA

Resourc

e-

based

Others: rubber cup lumps, pineapple & sugarcane by-products Europe & Asia


D. Corridor 4: Western Bukidnon

These are areas along the Cagayan de Oro-Talakag Road, particularly the

hinterlands of Cagayan de Oro, and the towns of Baungon and Talakag, Bukidnon.

This area has its share of irrigation, however, because of the terrain, irrigated areas

are limited. Major roads are all-weather concrete paved but most of the farm to

market roads are either, yet to be developed or needs improvement.




Grains Imported from other countries & other areas in Mindanao

Agricultura

l

Pro

duct

s

Feeds Imported from other countries & other areas in Mindanao

Industrial Products -Packaging materials Imported from other countries

Resource-based – Raw rubber Local and from other areas in Mindanao


Fresh fruit: Bananas World-wide

Food

Processed: Frozen diced/chunk fruit USA

Resource-based - Mineral: Copper ore China Source: Compiled from DTI, PhilExport and BOC data, 2009.

2.2.2 Export and Import Volumes

Ports and airports are the regular gateways for exports and imports. For Northern

Mindanao, the exports/imports through airports are negligible as only export samples

are the usual commodities sent out.

The data on export and import volumes passing through the ports are reported by the

Philippine Ports Authority based on ships’ manifests. However, PPA statistics are

aggregated to broader categories as to import and export cargo by packing type

rather than details on commodities. As such, the PPA data are supplemented with

the study team’s compiled information by commodity from the local and regional

offices of the Bureau of Customs, the Department of Trade and Industry and

PhilExport’s One-stop Export Processing Center.

The PPA 2008 and 2009 statistics show a slightly lower volume than the study

team’s data. But the general trend is the same in that there is a decrease in the total

volumes from the previous year 2008 (see Tables 2.6 and 2.8).


Table 2.6 Comparative Shipping and Cargo Traffic, PPA Inc (Dec)

Particulars 2009 2008 variance %

A. Shipping Traffic Number of Shipcalls 12,539 14,027 (1,488) -11% Domestic 12,172 13,625 (1,453) -11% Foreign 367 402 (35) -9% Total G.R.T. 13,403,453 14,110,503 (707,050) -5% Domestic 10,226,455 10,764,075 (537,620) -5% Foreign 3,176,998 3,346,428 (169,430) -5% Total Waiting Time 9,499 10,629 (1,130) -11% Domestic 9,142 10,019 (877) -9% Foreign 357 610 (253) -41% Total Service Time 227,557 249,812 (22,255) -9% Domestic 208,780 227,434 (18,654) -8% Foreign 18,777 22,378 (3,601) -16% B. Total Cargo (m tons) 5,698,477 6,090,936 (392,459) -6% Domestic Trade 4,186,618 4,232,543 (45,925) -1% Inbound 1,826,712 1,847,482 (20,770) -1% Outbound 2,359,905 2,385,061 (25,156) -1% Foreign Trade 1,511,860 1,858,393 (346,533) -19% Import 675,334 769,741 (94,407) -12% Export 836,526 1,088,652 (252,126) -23% C. Container Traffic (baseports) 140,860 150,208 (9,348) -6% Domestic 116,467 123,751 (7,284) -6% Inbound 57,086 60,921 (3,835) -6% Outbound 59,381 62,830 (3,449) -5% Foreign 24,393 26,457 (2,064) -8% Import 14,306 12,821 1,485 12% Export 10,087 13,636 (3,549) -26%

Source: Philippine Ports Authority Statistics, 2008 and 2009

Table 2.7: Volume of Exports by Commodity (in Metric Tons)1

Sector 2006 2007 2008 2009 2008-2009 Variance

(%)

Ave. Growth (%)

Food 236,435.78 272,557.82 557,403.83 386,140.55 -31 15.8

Coconut (Food) 17,758.45 17,525.58 12,830.74 16,050.40 25 -2.4

Aquamarine 5,088.49 2,679.31 2,905.50 2,427.43 -16 -13.1

Fresh 909.64 92,666.78 189,003.51 134,057.24 -29 3659.4

Processed (including Sugar) 212,679.19 159,686.15 352,664.08 233,605.49 -34 2.5

Industrial 254,504.81 382,502.30 456,635.99 412,610.97 -10 15.5

Coconut (Industrial w Coco oil) 101,672.80 322,281.01 295,499.00 333,983.82 13 57.1

Industrial 119,136.59 5,047.19 23,964.11 26,371.22 10 -19.5

Iron & Steel 33,695.42 55,174.09 137,172.87 52,255.93 -62 13.8

GTH 187.95 322.24 2,020.02 216.06 -89 3.7

Resource-based 63,837.53 69,200.62 278,888.32 231,460.07 -17 65.6

Minerals 35,924.16 6,039.98 109,342.52 53,974.01 -51 12.6

Wood 27,905.25 34,144.78 148,707.68 163,192.96 10 121.2

Others 8.13 29,015.87 20,838.11 14,293.09 -31 43942.9


Sector 2006 2007 2008 2009 2008-2009 Variance

(%)

Ave. Growth (%)

Special Transactions 317.95 554.45 548.88 1,990.51 263 131.5

Sub-total (Commercial Ports) 555,284.02 725,137.43 1,295,497.03 1,032,418.16 -20 21.5

Phil. Sinter Corp. 5,319,613.76 17,481.36 4,316,104.21 3,115,361.00 -28 -10.4

HOLCIM Phils. 909,431.00 742,085.01 448,793.90 293,053.00 -35 -16.9

Total NM Exports 5,874,897.78 742,618.79 6,060,395.14 4,440,832.16 -27 -6.1 1 Note: Volume of Phil. Sinter Corp. and HOLCIM Phils., Inc were segregated since they have their own port facilities

and 100% of their export pass through their respective ports in bulk. Source: Compiled by the Study Team based on records from BOC, DTI and Philexport10A One-stop Export Documentation Center.

While the overall cargo traffic has gone down compared to the previous year, it is noted

that that total FCL (full container load) traffic accounting to about 72,771 TEUs has

increased in 2009.

Table 2.8: Comparative container traffic for both ports in TEU

2008 2009 Container Traffic (FCL only) CDO MCT Total CDO MCT Total

Import 10,632 14,172 24,804 12,134 33,808 45,942

Export 11,803 17,165 28,968 8,796 18,033 26,829

Total 22,435 31,337 53,772 20,930 51,841 72,771

For 2009, PPA reports a total of 837,000 metric tons of export cargo while the study

team’s data shows a total of 1,032,000 metric tons, which excludes the export volumes

of large industries using their own ports. On a four-year growth analysis, an average of

21.5% yearly increase in volumes was realized between 2006 and 2009. The top

commodity, coconut-based products, posted a strong growth of 57% in the industry

sector but a slight dip of -2.4% for the food sector. Other top commodities such as

processed food, iron and steel, and wood posted positive growths of 2.5%, 13.8% and

121.2%, respectively. It should be noted that the wood products are of the commercially

grown, non dipterocarp types.

The markets for these commodities are indicated in Table 2.2 to 2.5. Coconut, fresh and

processed food products are exported worldwide. Most of the resource-based products,

on the other hand, are exported to China and the USA.

Figure 2.7 shows the shares of commodities to total export volumes for 2009. On the

whole, industrial commodities accounts for 56% of total export volumes. This is followed

by food products (fresh and processed) with 26% and by resource-based products with

18% of total exports. Coconut-based products posted 47% of total volume in the

industrial sector and 5% of the food sector.


Table 2.9 Value of Exports (in Million US Dollars)1

Sector 2006 2007 2008 2009 Ave.

Growth (%)

Food 135.57 149.50 252.00 161.30 4.7

Coconut (Food) 18.75 21.94 24.02 22.91 5.5

Aquamarine 1.73 3.20 3.19 4.78 44.1

Fresh 5.31 33.77 67.49 39.41 160.5

Processed (including Sugar) 109.77 90.59 157.30 94.19 -3.5

Industrial 389.62 357.67 463.57 245.45 -9.3

Coconut (Industrial w Coco oil) 245.38 257.00 323.53 204.21 -4.2

Industrial 10.92 36.86 23.43 21.41 24.0

Iron & Steel 133.32 63.81 116.61 19.83 -21.3

GTH 1.38 1.76 1.57 1.53 2.7

Resource-based 10.69 31.62 125.59 70.13 139.0

Minerals 0.92 1.73 53.15 3.00 56.5

Wood 9.77 19.45 26.95 11.71 5.0

Others 0.0018 10.44 45.49 55.42

Special Transactions 0.34 1.92 1.97 0.42 5.9

Sub-total (via Commercial Ports) 537.60 542.47 844.71 478.83 -2.7

Phil. Sinter Corp. 62.97 288.46 56.43 35.87 -10.8

HOLCIM Phils. 27.63 23.50 20.13 12.02 -14.1

Total NM Exports 600.57 830.92 921.27 526.72 -3.1 1 Note: Values of Phil. Sinter Corp. and HOLCIM Phils., Inc were segregated since they have their own port facilities

and 100% of their exports pass through their respective ports in bulk. Source: Compiled by the Study Team based on records from BOC, DTI and Philexport10A One-stop Export Documentation Center.

Figure 2.7 Export Volumes by Commodity, 2009

Source: Compiled by the Study Team based on records from BOC, DTI & Philexport10A One-stop Export Documentation Center.


For the import volumes, commodity data compiled by the Study Team is incomplete as it

only reflects about 56% of total volume of 675 thousand metric tons reported in the PPA

statistics. The data of BOC at the MCT port have not yet been provided and it is

expected that the information would complete the overall view of imports in the study

area.

Based on available breakdown of imported commodities, the top three products are

minerals, foodstuffs and fertilizer. Minerals imports are exporters’ raw material inputs for

their products. Most of the listed commodities are for local use.

Based on PPA’s statistics, import volumes are also decreasing from 769,000 metric tons

in 2008 to 675,000 metric tons in 2009; a 12% reduction in one year.

.

Table 2.10 Top Import Commodities for Northern Mindanao, 2009

Commodity Vol. (Kgs.) Value (Php)

Minerals 147,164,493 540,967,161.00

Foodstuffs 97,735,684 2,604,132,298.58

Fertilizer 40,488,025 337,429,813.00

Corn 27,717,124 259,563,594.00

Chemicals 21,422,033 522,356,023.15

Paper & paperboard thereof 9,900,250 224,637,552.00

Spare Parts 6,645,759 90,526,836.67

Footwear 5,172,683 7,602,797.00

Petrochemical Products 3,400,000 81,953,687.00

Forest Product 3,042,084 26,881,112.00

Plastic/rubber & articles thereof 2,173,291 159,709,649.99

Iron & Steel Products 2,035,912 149,461,617.40

Live Animal 1,924,510 79,548,560.00

Hardware 1,894,254 30,044,606.00

Textiles & textiles articles 1,827,945 62,020,343.00

Electrical Machinery 1,738,983 69,390,043.00

Miscellaneous Items 1,112,478 49,595,870.87

Maize 1,000,000 1,892,008.00

Non-electrical machinery 831,119 98,203,160.00

Motor Vehicle 380,721 17,001,433.00

Articles of Iron 57,208 13,015,167.00

Old stocks 16,250 187,148.00

Others, raw hides, shin & leather 6,100 37,371.00

Machine Parts Acc. 3 3,802.00

Total 377,686,909 5,476,161,653.66

Source: BOC CDO District


2.3 Logistics Players in Northern Mindanao

A. Exporters (Shippers)

Unlike other areas where export commodities are homogenous, Northern Mindanao’s

export is relatively diverse in terms of commodities. As such, there are numerous

players in the export sector. Listed in Table 2.9 are the exporters from 2006 to 2009

showing a modest growth from 127 to 174. The number of firms recorded under the

special transactions is not considered as regular exporters. Thus, the total number of

regular exporters in 2009 is 161, which is the target sample for the survey as

described in Chapter 3.

Table 2.11 Northern Mindanao’s Exporters

Sector 2006 2007 2008 2009

Food 25 31 35 41

Coconut (Food) - desiccated, coco cream, frozen chunks, coco sugar 2 2 2 3

Fresh - banana, pineapple 8 7 6 6

Aquamarine – prawns 5 12 17 22

Processed Sugar - tropical fruit, sugar 10 10 10 10

Industrial 34 33 41 44

Coconut - Oleo-chemicals, Coconut oil, Coco charcoal, Coco husks 13 13 18 22

Industrial - construction materials, processed silica, activated carbon, finished rubber

10 11 11 13

Iron & Steel - hot rolled coils, cold rolled coils, scrap metal 11 9 12 9

GTH - gifts toys and house-ware 6 6 7 6

Resource-based 52 79 88 70

Minerals - copper ore, chromite ore 10 30 43 22

Wood - lumber, furniture components 34 35 37 32

Others - pineapple & sugarcane by-products, raw rubber, abaca pulp 8 14 8 16

Special Transactions 10 11 15 13

Total 127 160 186 174

Source: DTI, BOC and PhilExport, 2009

B. Truckers

The region has about forty (40) major trucking companies serving both exporters and

importers. Most of these players are based in Cagayan de Oro. There are other

players based outside the region (e.g. Davao, Cotabato, and Manila) who also

operate within the region on a per contract basis.

C. Imports and Importers

Northern Mindanao’s major imports are raw materials for agricultural production,

petrochemicals and minerals for finished and semi-goods of industrial exports.

Below is the distribution of importers and import commodities for the region.


Table 2.12 Importers for 2009

Corridor

1 Corridor

2 Corridor

3 Corridor

4 Total

Exporters importing raw materials

27 9 6 5 47

Importers for Domestic Consumption

140 33 1 1 175

Total 167 42 7 6 222

Source: BOC CDO District

D. Shipping Lines

Compared to other areas in Mindanao, Northern Mindanao has a relatively good

international connectivity with several domestic liners providing transshipment cargo.

Five (5) foreign shipping lines call Northern Mindanao

Table 2.12 Foreign Shipping Lines operating in Northern Mindanao Company Call Frequency Port(s) of Call

American President Lines (APL) Weekly CDO-Bugo-MCT

Maersk Lines Weekly MCT

Marianas Shipping Weekly MCT

Pacific Eagle Lines (PEL) Weekly MCT

Region Container Lines (RCL) Weekly MCT

China Shipping Weekly Via Cebu

Orient Overseas Container Line Weekly Via MICT/Cebu

Nippon Yusen Kaisha (NYK) Weekly Via MICT

Domestic liners and most Non Vessel Operating Common Carriers (NVOCC) provide

transshipment services for export. However, because of the increasing number of

foreign ship calls, transshipment volume has been steadily on the decline.

Table 2.13 Transshipment Cargo from Northern Mindanao Period Vol. (MT) Val. (USD Million)

2006 80,695.14 54.72

2007 98,406.33 37.39

2008 134,868.35 27.08

2009 123,101.51 20.95

Source: BOC, 2009


E. Cargo Handling Operators

Cagayan de Oro Port is managed by the Philippine Port Authority’s Port

Management Office and contracted OROPORT Cargohandling Services, Inc. as its

cargo handling service provider. OROPORT, since its merger (between Continental

Arrastre and Stevedoring Co., Inc. – CASCO (1986) and Gold City Integrated Port

Services, Inc. – INPORT(1977)) has been providing cargo handling services at the

port since 1999.

Mindanao Container Terminal is operated by the Mindanao International Container

Terminal Services, Inc. (MICTSI), a subsidiary of the International Container Terminal

Services, Inc., which took over terminal operations in 2008.

2.4 Logistics Costs/Charges for Exports and Imports

2.4.1 Trucking and Hauling Rates

The trucking fleet in Northern Mindanao is primarily composed of Japanese and

American surplus trucks of various age, model and type. Trucking for container

cargoes are usually by six or ten wheeler semi-trucks with 20 or 40-footer skeletal or

flatbed trailers and/or by 10-wheeler stake trucks equipped with adequate container

twist locks.

The 10-wheeler semi truck with 40-foot trailers can load two units of 20-foot

containers (tandem load). With this system, trucking rates per container unit

becomes cheaper; however, overloading becomes a major issue.

Prevailing spot market trucking rates are usually paid on cash, short term credit

and/or short term credit with diesel cost paid in advance.

Table 2.14 Northern Mindanao Spot Market Trucking Rates for Containerized

Cargo -including empty positioning/empty return (in PhP)

FCL MCT to CDO w/n 20Km.

radius

El Salvador, Mis. Or (Sanwa)

Iligan City (Global Steel)

Bukidnon (BUSCO)

Medina, Mis. Or.

(Celebes Oil)

20 Footer 2,500 4,000 8,500 11,000 8,000 40 Footer 3,500 6,000 14,000 16,000 12,000 Tandem (2x20) 4,000 6,000 14,000 18,000 13,000 Dist. (Kms): 1-way 20 38 112 127 94 Back and forth 20 76 223 254 188 20 Footer P62/km P52/km P37/km P43/km P42/km 40 Footer P87/km P78/km P62/km P62/km P63/km Tandem (2x20) 50/km/unit 40/km/unit 31/km/unit 35/km/unit 35/km/unit

Source: Trucker interviews and rate canvass


The shipping lines also have their own published trucking rates referred to as the

Shippers’ Matrix Guides for an “all in” door-to-door service, which usually includes

empty positioning/return. This is shown in Table 2.15.

Table 2.15 Shipping Lines Trucking Published Rates Containerized Cargo -

Door to Door Service (in PhP) 20 Footer Dry 40 Footer Dry

Destination Distance

(Kms) Non-VAT VAT-in Non-VAT VAT-in MCT, Bugo to CDO proper 1.6 to 18 2,398.22 2,686.00 4,796.44 5,372.00 CDO Proper 18 2,398.22 2,686.00 4,796.44 5,372.00 Carmen/Kauswagan/Bulua 20 to 25 2,877.85 3,223.20 5,755.70 6,446.40 MCT to Eastern Misamis Oriental Villanueva 3.7 2,686.00 5,372.00 Jasaan 15 2,829.75 5,659.50 Balingasag 30 3,996.30 7,992.60 Lagonglong 37 4,578.00 9,156.00 Salay 45 5,076.75 10,153.50 Binuangan 53 5,744.55 11,489.10 Sugbongcogon 64 6,076.35 12,152.70 Kinoguitan 72 6,325.20 12,650.40 Balingoan 76 6,991.95 13,983.90 Talisayan 80 7,325.85 14,651.70 Medina 94 8,990.10 17,980.20 Gingoog 102 10,155.60 20,311.20 Magsaysay 112 10,393.95 20,787.90 MCT to Western Misamis Oriental Opol 28 3,531.50 7,063.00 El Salvador 38 4,322.00 8,644.00 Alubijid 45 4,875.00 9,750.00 Laguindingan 50 5,271.00 10,542.00 Gitagum 56 5,744.50 11,489.00 Libertad 62 6,218.50 12,438.00 Initao 72 7,009.00 14,018.00 Naawan 80 7,642.00 15,284.00 Manticao 84 7,957.00 15,914.00 Lugait 93 8,669.00 17,338.00 Iligan City 108 9,855.00 19,710.00 Source: Philippine Liner Shipping Association (PLSA)


2.4.2 Brokerage and Facilitation Charges

Services provided by import-export brokers have a standard charge by the quantity of

goods exported as shown in Table 2.16. The standard charge for all other activities

of processing the exportation and importation of containerized cargoes are

established by the brokers’ association and these are identified per agency as shown

in Table 2.17.

Table 2.16 Brokerage and Facilitation of Containerized Cargo

No. of units/BL Brokerage Unit

Fee (PhP)

Facilitation Unit

Fee (PhP)

Total Unit Cost

(PhP)

1 box 2,500 30,000 32,500

2 boxes 2,500 15,000 17,500

3 boxes 2,500 10,000 12,500

4 boxes 2,500 7,500 10,000

5 boxes 2,500 6,000 8,500

6 boxes 2,500 5,000 7,500

7 boxes 2,500 4,286 7,786

8 boxes 2,500 3,750 6,250

9 boxes 2,500 3,334 5,834

10 boxes & Over 2,500 3,000 5,500

Source: Compiled from Bill of Ladings

Table 2.17 Export and Import Processing Charges by Agency Cost Item Amount (PhP)

Containerized Cargo

Due to Customs :Processing Fee Php1,000

Container Security Fee - 40’* US$10

Container Security Fee - 40’* US$5

ATRIG: Facilitation Php3,000/application

Certification Fee Php100

Doc Stamps Php30

“Facilitation” (Informal) Php5,000/application

Miscellaneous Php1,000/BL

Break bulk Cargo (PEZA Registered)

Customs Legal Charges: Processing Fee Php1,000/BL

ATRIG: Facilitation Php3,000/application

Certification Fee Php100

Doc Stamps Php30

Broker’s Facilitation Php5,000/application

Miscellaneous Php1,000/BL

Brokers: Brokerage Php50,000/BL

Facilitation Fee Php100,000/BL

*: subject to applicable forex

Source: CDO Import/Export Brokers


2.4.3 Port Charges

Costs incurred at the port are the arrastre and stevedoring charges. The rates are

shown in Table 2.18 for the Northern Mindanao ports in comparison to other

international ports in the country. It is evident that a uniform Mindanao-wide arrastre

rate is used while those of Cebu and MICT (Manila) are different and much higher.

It is interesting to note that the arrastre charges for domestic-bound containers are

almost the same as export-bound or import containers at the MCT and CDO ports

(see Table 2.19). The 40 footers for the import/export are even slightly lower than

the domestic-bound containers. However, stevedoring rates at these ports favor the

domestic-bound containers as they are considerably lower than their import/export

counterparts.

Table 2.18 Comparative Arrastre Rates of Selected Philippine International Ports1

20 Footer FCL 40 Footer FCL Port

Import Export Import Export

CDO – CDO Port 974.50 974.50 1,797 1,797

PHIVIDEC – MCT 974.50 974.50 1,797 1,797

Davao – Sasa 974.50 974.50 1,797 1,797

Cebu – Cebu Int’l. 1,465 1,465 2,448 2,448

Manila – MICT 2,646 6,077 3,241 7,436

1Arrastre rates (Terminal Handling) for major ports in Mindanao under the jurisdiction of the Philippine Ports

Authority (PPA), namely Cagayan de Oro, Davao and General Santos had been leveled as of August 2009.

Source: PPA CDO, Davao Port Tariff, MCT Tariff, CIP, ICTSI Tariff

Table 2.19 Arrastre and Stevedoring Charges at MCT and CDO Ports

FCL Containers Domestic Import/Export

Arrastre

20’ 903.50 974.50

40’ 1,806.00 1,797.00

Stevedoring

20’ 273.50 603.00

40’ 273.50 1,207.00

Source: PPA CDO and MCT Tariff


2.4.4 Sample Logistics Cost of Exporters

Based on several receipts and financial records of exporters and importers, all costs

actually incurred are documented. A representative sample of how costs run for a

dry and reefer 40-footer are presented in Tables 2.20 and 2.21 for a better

understanding of the recent export cost structure to a destination within Asia. Freight

cost is shown to account for almost 40% of total cost for a dry 40-footer. The

informal cost incurred is quite high at 20% of total cost. Freight cost for a 40-footer

reefer, on the other hand, accounts for 78% of export cost.

Table 2.20 Exporter’s Cost - Exporting Lumber through 40 Footer Dry

Van from CDO to Shanghai via MCT

November 2009 Cost Items Published

(PhP) Actual (PhP)

Share to Total

(%) Remarks

Ocean Freight - 28,740.00 49.1 paid to shipping line Docs Fee (Bill of Lading) - 1,437.00 2.5 paid to shipping line THC (Terminal Handling Charge)

5,990.00 5,987.50 10.2 paid to shipping line

Seal Fee 150.00 150.00 0.3 paid shipping line Wharfage (VAT-in) 438.03 219.02 0.4 paid to port authority Weighing (VAT-in) 179.20 179.20 0.3 paid to terminal operator Arrastre (VAT-in) 2,012.64 2,068.64 3.5 paid to terminal operator Storage (VAT-in) 134.74 134.74 0.2 paid to terminal operator Trucking (VAT-in) 3,500.00 6.0 paid to trucker Documentary Stamps (shipper)

575.00 1.0 paid to BOC

Commodity Clearance (DENR)

20.00/CBM 900.00 1.5 paid to regulatory agency @ 45CBM/40’ van

Customs Broker's fee 1,200.00 1,200.00 2.1 paid to Customs Broker Stuffing 1,500.00 1,500.00 2.6 paid to trucker

DENR "Facilitation" - 7,000.00 informal cost (per "rush" transaction)

BOC Customs on Board Cargo Clearance “Facilitation”

- 900.00 informal cost (per bill of lading)

BOC Export "Facilitation" - 4,000.00

20.3

informal cost (per export declaration)

Total 58,491.09 100.0 Source: Compiled by the Study Team from actual cost disbursements of exporters.


Table2.21 Exporter's Cost - Exporting a commodity through 40 Footer

Refrigerated Van from CDO to Tokyo via MCT

March 2010 Cost Items Published

(PhP) Actual (PhP)

Share to

Total (%)

Remarks

Ocean Freight - 119,600.00 77.9 paid to shipping line FAF (Fuel Adjustment Factor) 10,120.00 6.6 paid to shipping line YAS (Yen Appreciation Surcharge) 4,830.00 3.1 paid to shipping line Docs Fee (Bill of Lading) 1,380.00 0.9 paid to shipping line THC (Terminal Handling Charge) 5,990.00 7,795.00 5.1 paid to shipping line Documentary Stamps (shipping line) 10.00 0.0 paid to shipping line Seal Fee 150.00 150.00 0.1 paid to shipping line

ED Processing (OSEDC) 150.00 0.1 paid to PhilExport (processing fee)

Arrastre (VAT-in) 2,012.64 2,012.64 1.3 paid to terminal

operator

Weighing (VAT-in) 179.20 179.20 0.1 paid to terminal

operator Wharfage (VAT-in) 437.98 0.3 paid to port authority C-5 Form (PIA) 56.00 0.0 paid to port authority Trucking 3,200.00 2.1 paid to trucker Documentary Stamps (shipper) 575.00 0.4 paid to BOC Customs Broker's fee 1,200.00 1,200.00 0.8 paid to Customs Broker

Commodity Clearance (BFAR) - per EO 554 BOC Customs on Board Cargo Clearance "Facilitation”

900.00 Informal cost (per bill of lading)

BOC Export "Facilitation" 1,000.00 1.2

informal cost (per export declaration)

Total 153,595.82 100.00 Source: Compiled by the Study Team from actual cost disbursements of exporters.

Presently, domestic transshipment of FCL containers is not a viable option for

Mindanao shippers/exporters since the cost is too high. Many ports of Northern

Mindanao particularly Iligan, Ozamis and Butuan do not have direct foreign

containerized shipping calls due to low cargo volume. Presently, due to very high

domestic freight rates, handling, and wharfage charges, exporters from these areas

truck their products to Cagayan de Oro or MCT to have access to foreign shipping.

Table 2.22 gives the build up of costs to be incurred for transshipped goods using the

conventional and the RORO.

The latter transport system is the development thrust of the government to improve

inter-island movement of goods and passengers. Among others, it is meant to bring

down transport costs but with the current system of handling employed, the cost

benefit of using the RORO as against the conventional is negligible. That is, only a

savings of Php1,102.50 for a 20-footer and Php2,053 for a 40-footer is noted with the

use of the RORO.


Table 2.22 Transshipment Cost Components (Php) Conventional CHA-RO

Item 20 Footer 40 Footer 20 Footer 40 Footer

Arrastre (CDO) 974.50 1,797.00 431.00 862.00

Wharfage (CDO) 202.00 437.98 202.00 437.98

Domestic Freight 20,913.00 43,760.00 20,913.00 43,760.00

Arrastre (North Harbor) 990.00 1,980.00 431.00 862.00

Wharfage (North Harbor) 202.00 437.00 202.00 437.00

Trucking to MICT 2,640.00 3,960.00 2,640.00 3,960.00

Wharfage (MICT) 202.00 437.00 202.00 437.00

Arrastre (MICT) 2,646.00 6,077.00 2,646.00 6,077.00

VAT 3,418.00 7,032.00 3,418.00 7,032.00

Total 32,187.50 65,917.98 31,085.00 63,864.98

20 Footer 40 Footer Difference between

Conventional and

CHA-RO (1,102.50) (2,053.00)

Source: Compiled from tariffs of PPA CDO, MICT, Shipping lines, and Truckers.


3 LOGISTICS SURVEY FOR NORTHERN MINDANAO

3.1 Survey Implementation

Surveys to capture the actual logistics conditions for exports and imports within the study

area in Northern Mindanao were conducted from the month of February to March 2010.

The shippers/exporters, importers, shipping lines and truckers were the main export

logistics groups targeted for the survey.

The sampling was based on the recorded/registered firms in the study area. The

locations and number of players, in terms of shippers, importers, truckers and shipping

lines, are discussed in chapter 2. Based on this information, the target sampling was

drawn up only for those firms that use the public ports of Cagayan de Oro (CDO) and

Mindanao Container Terminal (MCT). As such, the bigger firms with their own private

ports (i.e., Philippine Sinter Corporation) are no longer included in survey. On the whole,

26% of total registered firms were targeted and a good sampling rate of 10% was

achieved. Table 3.1 presents the sampling rate by logistics group.

Table 3.1 Survey Sampling

Particulars Shippers/

Exporters Importers

Shipping

Lines Truckers Total

Total Firms1 in Study Area 161 222 6 40 429

Number of Samples 46 36 6 25 113

Tar

get

Sam

ples

Share to Total 29% 16% 100% 63% 26%

Number of Samples 14 14 6 8 42

Sur

vey

Ret

urns

Sampling Rate 9% 6% 100% 20% 10%

1 Data on Shippers – DTI, One Stop Export Documentation Center and BOC-CDO/MCT 2009; Data on

Importers – BOC Accredited Firms and MCT List 2009; Data on Foreign Shipping Lines – Philexport10A;

Data on Truckers – CDO Port Truckers’ Assn & Others identified by Philexport10A 2009.

The activities for the survey included the following:

a) Questionnaire forms were distributed by the surveyors to target respondents

located within the four corridors of the study area. The questionnaires are

shown in Annexes 3-1 to 3-4.

b) Follow ups and collection were extensively done for a month.

c) Accomplished forms were reviewed and call-backs to respondents were

made for those needing clarification and completion.

d) Encoding of the collected forms was done using MS Excel.

Moreover, interviews were also conducted for the truck drivers to supplement the trucking

questionnaire forms, which were accomplished by the truck operators. The truck drivers

gave specifics as to difficult road sections to traverse and the nature of problems.

Findings and results of the surveys are given in succeeding sections of this report. Further,

the disclosed information on actual charges and costs incurred by the respondents are used


in the comparative cost analysis against the published rates gathered from relevant agencies

and entities, which is discussed in section 2.4 of this report.

3.2 Profile of Survey Respondents

The profiles of the survey respondents by target group are presented in Tables 3.2 to

3.4. For the shippers/exporters, respondents from all industry sectors are covered with

many in the manufacturing type of business. A fair distribution of the respondents by size

of business is noted.

The importers, on the other hand, are more of the service business types (such as

forwarders) servicing the exporters. Some of the importers (i.e., 6 firms) are actually the

exporters themselves importing their raw material requirements. Two of the

respondents, however, are importers for the domestic market only.

The trucker respondents are more on the micro business size owning about 1 to 3

trucks. There is one large sized trucking firm owning a fleet of hundreds of trucks. Most

of these firms acquired second-hand or surplus vehicles for their operation and many are

operating on a “for hire” basis.

For the shipping companies, five respondents are foreign liners and one is a non-vessel

operating carrier company (NVOCC). All firms have vessels calling at MICT port but

only one firm has vessels calling at CDO port. The total number of vessels calling at

Northern Mindanao is 11 but the frequency of calls is 6 vessels weekly.

Table 3.2 Profile of Exporters and Importers Respondents

Exporters Importers

Item No. of Exporters

Distribution (%)

No. of Importers

Distribution (%)

No. of Respondents 14 100.0 14 100.0

Industry Sector1

Agriculture/Aquaculture 2 14.3 0 0.0

Processed Food 2 14.3 0 0.0

Wood/Furniture 2 14.3 0 0.0

Industrial 5 35.7 6 42.9

Others 3 21.4 7 50.0

Business Type1

Production 2 14.3 1 7.1

Trading 0 0.0 0 0.0

Manufacturing 12 85.7 5 35.7

Services 0 0.0 8 57.1

Others 0 0.0 0 0.0

Business Size1

Micro (below Php3M) 2 14.3 6 42.9

Small (Php3M-15M) 4 28.6 3 21.4

Medium (Php15M-100M) 4 28.6 1 7.1

Large (above Php100M) 4 28.6 4 28.6

1 Using NEDA classifications

Source: Logistics Survey, 2010


Table 3.3 Profile of Trucker Respondents

Item No. of

Truckers Distribution

Total Samples 8 100.0

Business Size

Micro (below Php3M) 3 37.5

Small (Php3M-15M) 2 25.0

Medium (Php15M-100M) 2 25.0

Large (above Php100M) 1 12.5

Operation Type

For Hire 5 62.5

Not For Hire 1 12.5

Mixed 2 25.0

Vehicle Acquisition Type

Brand New 1 12.5

Surplus 7 87.5

Source: Northern Mindanao Logistics Survey, 2010

Table 3.4 Profile of Shipping Lines Respondents

Respondent No. Vessel Information

1 2 3 4 5 6

No. of Ships Calling MCT Port 1 2 1 6 1 1

No. of Ships Calling CDO Port 2 - - - - -

Vessel Types Conventional Containerized

Origin/Destination

Asia,

Europe,

US

Hong

Kong Singapore China Japan Singapore

Call Frequency Weekly

Ship Capacity (in TEUs) 712 &

1,049 1108

1,114 &

1,338 1,200 1,300

Ship Capacity (reefer plugs) 220 & 180 220 & 449 220 100


3.3 Results from the Survey

3.3.1 Shippers Survey

Most of the shippers or exporters surveyed apparently outsource their trucking logistics

instead of maintaining their own fleet. This is true for exporters in all industry sectors

especially since trucking cost make up less than 10% of their total logistics cost. This

may be explained by the proximity of most shippers of less than 20 Kilometers from the

ports. Even with costs reaching 26% to 50% of total cost, trucking still remains an

outsourced service (see Tables 3.5 and 3.6).

Shipping cost, on the other hand, is substantial for most of the surveyed companies

accounting for more than 75% of total logistics cost (see Table 3.7).


Table 3.5 Outsourcing of Trucking Logistics by Shippers

Industry Sector of Samples Shippers Yes No

Total Samples 14 13 1

Agriculture/Aquaculture 2 2 0

Processed Food 2 2 0

Wood/Furniture 2 2 0

Industrial 5 5 0

Others 3 2 1

Percentage of Total Samples 93% 7% Distance from Port (kms) Shippers Share (%)

<20 10 71.4 20-50 1 7.1

51-100 2 14.3 101-150 1 7.1


Table 3.6 Trucking Share to Total Logistics Cost of Shippers Trucking Share to Total Logistics Cost

1

Industry Sector of Samples a b c d e

Agriculture/Aquaculture 1 1 0 0 0

Processed Food 1 1 0 0 0

Wood/Furniture 1 1 0 0 0

Industrial 1 1 1 0 2

Others 2 0 1 0 0

Percentage of Total Samples 43% 29% 14% 0 14% 1 Note: a: Less than 10%; b: 10% - 25%; c: 26% - 50%; d: 51% - 75%; e: More than 75%


Table 3.7 Shipping Share to Total Logistics Cost of Shippers Shipping Cost to Total Logistics Cost

1

Industry Sectors of Samples a b c d e

Agriculture/Aquaculture 0 1 0 0 1

Processed Food 0 0 0 1 1

Wood/Furniture 1 1 0 0 0

Industrial 1 1 1 0 2

Others 0 0 0 1 2

Percentage of Total Samples 14% 21% 7% 14% 43% 1Note: a: Less than 10%; b: 10% - 25%; c: 26% - 50%; d: 51% - 75%; e: More than 75%


Based on the evaluation of the present logistics infrastructure shown in Table 3.8, the

quality of ports, roads and highways, and telecommunication services are found

adequate (either average or highly adequate). Warehouses are just average in quality.


Table 3.8 Evaluation of Quality of Infrastructure by Shippers Evaluation of Quality (% of answers)

Logistics Infrastructure Very

High High Ave. Low

Very

Low

Ports 14 36 36 14 0

Roads and Highway 7 29 36 21 1

Warehouse 0 9 82 9 0

Telecom Infrastructure &

Services 8 38 31 23 0

Total 8 29 44 17 2


Among the components of the logistics costs, freight is revealed as highest cost followed

by the trucking cost. It should be noted that informal costs are heavily borne by the

shippers in the form of customs’ facilitation and other informal charges (see Table 3.9).

The issues of high freight cost and presence of high informal cost repeatedly appears in

other survey responses as seen in Tables 3.10 and 3.11. Another nagging issue on the

software aspects of logistics is the difficult and time consuming export documentation/

clearance procedures.

Table 3.9 Ranked Logistics Cost by Shippers

Rank of Costs (% of responses)

Cost Items Very

Low Low Average High

Very

High

Port Charges: THC - 7 43 21 7

Trucking 7 - 43 43 7

Arrastre 7 7 57 14 7

Stuffing/Stripping - - 36 7 7

Customs Brokerage 7 7 36 - 14

Warehouse - - 29 - 7

Port -Wharfage - - 43 14 7

Freight - - 14 43 29

Customs Facilitation - - 43 29 7

Other Informal - - 21 7 14


Table 3.10 Logistics Issues from Shippers

Identified Issues

Number of

Samples

% of

Responses

Freight charges - high 8 34.8

Doc Processing - complicated 4 17.4

Fuel/Transport Cost - high 4 17.4

Shipping Schedules - poor 3 13.0

Informal Charges - high 3 13.0

Infrastructure - poor 1 4.3

Total 23 100.0



Table 3.11 Evaluation and Experiences of Selected Export Processes Frequency of Occurrence (% of responses)

Evaluation of Selected Export Processes Always Often

Some-

times Rarely

Hardly

Ever

Timely Clearing & Shipping of Export Goods 85.7 14.3 - - -

Timely Clearing & Delivery of Import Goods 42.9 21.4 14.3 - -

Transparency of Customs' Clearance Process 50.0 14.3 - 28.6 -

Timely & Adequate Receipt of Regulatory Changes 35.7 14.3 21.4 14.3 7.1

Electronic Processing of Customs' Declaration 28.6 14.3 7.1 - 28.6

Experiences of Shippers

Delays due to Pre-shipment Inspection - 8.3 41.7 25.0 25.0

Criminal Activities (e.g. Stolen cargo) - - 8.3 33.3 58.3

Solicitation of Informal Payments 41.7 - 25.0 16.7 25.0


Despite the poor rating of logistical conditions, the shippers perceived some of the

components to have improved in the past 3 years. Improvements were noted for the quality

of infrastructure, telecommunications, and private sector services. However, customs, port

clearance and business environment are perceived to be same (see Table 3.12).

Table 3.12 Perceived Evolution of Logistical Components by Shippers Development of Logistics Conditions

(in % of responses) Logistics Components’ Evolution in the Past 3

Years – Shippers’ Views Much

Worse Worse

About

the

Same

Better Much

Better

Customs clearance procedures - 8.3 75.0 8.3 8.3

Port clearance procedures - 8.3 75.0 - 16.7

Quality of transport infrastructure - 8.3 33.3 58.3 8.3

Quality of telecommunications infrastructure - - 33.3 66.7 8.3

Availability of private sector services - - 25.0 66.7 8.3

Regulatory regime - 25.0 - 25.0 -

Good governance and eradication of corruption 8.3 41.7 - 16.7 -

Overall business environment - 16.7 58.3 16.7 16.7


Table 3.13 summarizes the freight costs provided by the shippers by type of commodity

and by destination. Likewise, those exporters with import activities especially for their

raw material inputs provided freight costs of their imports.

Table 3.13 Freight Costs by Commodity of Exporters

Export Domestic Shipment

Commodity Package

Freight Cost (PhP)

Destinations Shipment Mode

Freight Cost (PhP)

Package

Wood 40' 24,000 China C&F

Silicon 20' 87,400 Europe FOB

Silicon 20' 103,000 USA FOB

Paper Products 3.12 cbm 39,000 Europe FOB 3,000 3.12cbm


Export Domestic Shipment

Commodity Package

Freight Cost (PhP)

Destinations Shipment Mode

Freight Cost (PhP)

Package

Paper Products 20' 38,000-45,000 Europe FOB & CIF 175,000 20'

Raw Sugar Bulker not given USA FOB 16,000 20'

Cocohusk Chips not given not given Japan FOB

Fiberglass 40' 69,325 Japan C&F 22,000 10' raw material

Fiberglass 20' 45,825 Japan C&F 32,000 20'

Abaca Bags box LCL 20,000 Europe, USA FOB

Frozen Fruits (coconut) 20' Consignee paid USA Consignee Designated

90,000 20' reefer

Wood/Native Crafts 40' 10,000/cbm Japan FOB

Wood/Native Crafts 20' 6,000/cbm Japan FOB

Fresh Seafood 40'reefer 154,000 Japan C&F 350,000 bulk shipment

Ceramics 20' 120,000 Europe, USA FOB

Rubber Boots 20' Consignee paid Japan FOB

Fatty Alcohol, Tertiary Amines, RG PG (Coco Industrial)

20' 36,000 - 150,000

Worldwide

FOB&CIF


3.3.2 Importers Survey

There were 7 respondents from a total of 14 that gave their assessment on charges by

port they use. On the whole, the ports of MICT and CDO are found to be very expensive

as compared to the ports in Baloy (private port), Davao and Cebu (see Table 3.14).

Import procedures were evaluated by all the importer respondents and the top most

difficult processes identified per implementing agency are given in Table 3.15.

Table 3.14 Assessed Port Charges by Importers

Comparative Port Charges

(in % of responses) Ports

Cheap Reasonable Expensive Very

Expensive

CDO Port 0 0 8 17

MCT 0 8 0 17

Cagayan Corn Port-Baloy 0 8 0 0

Davao 0 17 0 0

Cebu 0 17 8 0



Table 3.15 Identified Difficult Import Procedures by Importers

Agencies Identified Most Difficult Procedures

a) Documentations

b) Facilitations

c) Manila-based Tax Refund

d) Manila-based Accreditation

Bureau of Customs (BOC)

e) Renewal of Permits

a) Processing of Documents and Payments

b) Withdrawal of Cargoes Philippine Ports Authority

(PPA) c) Permit to Load Dangerous Cargoes

a) Withdrawal of Loose Cargoes

b) Heavy Equipment Operation

c) Cargo Stripping of LCL

Arrastre Service Provider

d) Payments

Bureau of Plant Industry

(BPI) a) Manila-based Filing of Import Permits

a) Securing Dangerous Goods Certificate

b) Export Permit Dept. of Environment and

Natural Resources (DENR) c) Ore Certification Process

a) Processing of Authority to Release Imported Goods Bureau of Internal Revenue

(BIR) b) Tax Clearance

Dept. of Finance (DOF) a) Release of Tax and Duties Exemption


To compensate for difficulties encountered in import procedures, the respondents have

resorted to the use of some measures listed in the questionnaire. The common practice

of an early cargo withdrawal from port is done by almost all the firms. Moreover, many of

the firms encourage formal training for their staff on import procedures. However, the

benefits of using the VASP is not well explored as this is the electronic submission of

required import forms, which eliminates a number of steps of the importation process

(see Table 3.16).

Table 3.16 Good Practices to Improve Importation Process Practices of Importing Firms Yes No

1) VASP submission to Bureau of Customs 35.7 50.0

2) Early cargo withdrawal from port 92.9 7.1

3) Participate in consultations on regulatory matters 42.9 28.6

4) Encourage staff formal training on import procedures 64.3 7.1


Similar to the claim of exporters, importers also ranked freight costs as the highest in

their incurred logistics costs. This is followed by customs duties and informal costs

(Table 3.17). The actual logistics costs and charges incurred by the importers are

broken down by component as shown in Table 3.18. Freight is shown as the largest cost

component together with the customs duties.


Table 3.17 Ranked Importation Costs

Importation Cost Items Ranked

Highest

Share

(%)

Freight 4 28.6

Arrastre 0 0.0

Wharfage Dues 0 0.0

Port Storage Charges 0 0.0

Trucking 1 7.1

Customs Duties 3 21.4

Value Added Tax 1 7.1

Brokerage 2 14.3

Facilitation/Informal Cost 3 21.4

Total Respondents 14 100.0 Source: Northern Mindanao Logistics Survey, 2010

Table 3.18 Actual Logistics Costs Incurred by Importers

Import Costs (in PhP)

Commodity

Packing Type

Freight

Arrastre

Wharfage

Port Storage

Trucking

Customs Duties

VAT

Brokerage

Facilitation/

Inform

al Cost

Not disclosed 1,797 779 2,600-4,000

zero rated

2,500 14,000

Not disclosed 40' 150,000 CDO:1,610; MCT:2,013

CDO:1,545; MCT:873

539 5,500 80,000 Inclusive 5,300 11,000

Coffee 3 in 1 (origin - Asia)

40' 210,000 CDO:1,610; MCT:2,014

CDO:1,545; MCT:874

539 5,500-9,,000

345,000 Inclusive 11,000 15,000

Not disclosed 50,000 1,200 1,800 550 3,500 70,000 60,000 5,000 20,000

Not disclosed 63,491 894 773 8,000 24,915 23,716 5,300 3,230

DMA/MMA 20' 80,000 MCT:974 MCT:520 MCT:

269 3,650 exempt exempt 6,500 2,000

LUNAC 20' 30,000 MCT:974 MCT:520 MCT:

269 3,650 exempt exempt 6,500 2,000


3.3.3 Truckers Survey

There were eight respondents for the trucker’s survey. Similar to the other surveys, the

truckers were made to assess the conditions of their operation in terms of the roads they

traverse, the conditions at the ports, and the costs of their operations. For the worst

roads traversed, Table 3.19 lists the road with a ranking of the type of difficulties.


Table 3.19 Assessed Road Conditions by Truckers

Ranked Conditions (% of responses)

Highway Congestion

Congestion due to Accidents

Poor Road Design

(Geometry)

Worst Roads

3 4-5 3 4-5 3 4-5

Bukidnon (via Sayre Highway) 37.5 12.5 - 62.5 - 12.5

Talakag, Bukidnon 25.0 25.0 12.5 25.0 12.5 12.5

Lanao, Iligan, West Misamis Oriental 12.5 - 25.0 12.5 12.5 -

Eastern Misamis Oriental 12.5 - 25.0 12.5 - -

Note: Shown here are ranked 3 (quite problematic) and 4-5 (very problematic) responses only.


The Sayre Highway in Bukidnon is ranked as the worst road due to congestion and

accidents. Likewise, other roads in Bukidnon that are enumerated by the truckers as the

accident-prone areas are as follows:

1) Baloy 2) El Salvador 3) Mangima Road 4) Maluko

5) Manolo Fortich 6) Carmen Hill Road 7) Talakag Road

When requested to provide solutions for the road improvements, the obvious high cost

solutions given are new roads and paving of roads (see Table 3.20). The low cost end of

the solutions that are notable are the repainting and improvement of road signages as

well as the dissemination of strict implementation of allowable weight of trucks. This is

recommendation surfaced since there is an inconsistency in the allowable weight of

trucks in the port as against that which is allowed by DPWH on the highways.

Table 3.20 Recommended Solutions for Road Improvements

Improvements for

Roads Recommended Solutions

High Cost Solutions a) Pave/cement roads;

b) Repair of cemented and asphalted roads; and

c) Build new roads/ highways.

Low Cost Solutions a) Repaint and improve road signages;

b) Set up proper road signs;

c) Improve pave roads;

d) Dissemination and strict implementation of allowable

weight of trucks; and

e) Deployment of more traffic enforcers. Source: Northern Mindanao Logistics Survey, 2010

The respondents identified the problems they encounter at the commercial ports of the

study area (i.e., CDO port and MICT). Table 3.21 shows that the common problem of

both ports is the lack of equipment.


Table 3.22 gives the operational expense items of the firms and the corresponding ranking in

terms of their share in the overall operational cost. Fuel has been ranked by almost all firms as

the highest cost incurred accounting for 40% to 55% of total expenses.

Table 3.21 Identified Problems at Port by Truckers Commercial Port Identified Problems at Port

Cagayan de Oro a) Breakdown of Equipment

b) Lack of Equipment

c) Tips to Equipment Operator

d) Misplaced cargoes

e) Stickers

f) Traffic

g) Kotong or Informal Collections

Mindanao Container

Terminal

a) Dont allow trailer jack-up

b) Lack of lifting equipment

c) Computer malfunctions

d) Long coffee and lunck breaks of regulatory agencies

e) Long truck queue for loading/unloading of containers

f) Red tape in entering

g) Too many requirements

h) Delays due to heavy traffic upon vessel arrival


Table 3.22 Ranked Operational Expenses of Trucking Firms

Rank Operation Cost Item

Share of

Operation

Cost

1 Fuel 40 to 55%

2 Financing Cost 1%

3 Repair and Maintenance 7 to 9%

4 Drivers and Helpers’ Salaries 1 to 15%

5 Tires 10 to 25%

6 Insurance and Inland Marine 1 to 8%

7 Business Permits and Vehicle Registration 1 to 7%

8 Oil and Lubricants 1 to 5%

9 Franchise Fee and Regulatory Permits 1 to 5%

10 Garage 1 to 1.4%

11 Port Bribes 0.3 to 2%

12 Road Bribes 0.7 to 2%

13 Weighbridge 0.5 to 1%


3.3.4 Shipping Lines Survey

All the shipping lines in the study area responded the survey. However, not all provide

their cargo tariff although the shippers provide information on this (see Table 3.23). In

terms of port and freight conditions, shipping lines rated timeliness of cargo delivery by

shippers and power outages as serious problems (see Table 3.24).


Table 3.23 Cargo Tariffs (in USD)

Respondent Number Container Size

1 2 3 4 5 6

Origin/Destination Asia,

Europe, US Hong Kong Singapore China Japan Singapore

10 Footer Dry

20 Footer Dry 2200 603

40 Footer Dry 1207

20 Footer Reefer 603

40 Footer Reefer 3500 1207


Table 3.24 Rate Port and Freight Conditions by Shipping Lines Number of Respondents

by Rated Problem Areas Port/Freight Conditions

1-2 3 4-5

Port Berth Congestion 3 3

Cargo handling productivity 5 1

Timeliness of vessel departure 5 1

Port equipment availability 5 1

Port and berthing facilities 6

Reefer plug availability 6

Truck and trailer availability 6

Container retention by shippers 4 2

Timeliness of cargo delivery by shippers 3 2 1

Timeliness of cargo withdrawal 3 3

Overweight containers 3 3

Truck ban restrictions on movement of large 3 3

Poor truck access to shipping terminals 5 1

Cargo truck queuing area 5 1

Other (specify): Power Outages 1

Note: 1: not a problem; 2: slight problem; 3: manageable problem; 4: really a problem; 5: very serious problem


Table 3.25 gives the port operation conditions of the shipping lines. All ships are

charged berthing dues based on their gross registered tonnage (GRT), which all claim to

be appropriate. However, 50% of the respondents are open to charges based on actual

space occupied. The operating own container yard is not deemed necessary by half of

the shipping firms for reasons ranging from small volumes of cargo to high maintenance

cost of equipment.


Table 3.25 Shipping Lines’ Port Operation Conditions Respondent Number

Questionnaire Item 1 2 3 4 5 6

Average Time at Ports (hrs.) 8 12 12 10

10. Your vessels are currently charged berthing dues based on GRT per day; do you find the system appropriate?

Yes Yes Yes Yes Yes Yes

11. Would you find it appropriate for the port authority to charge berthing dues based on actual space occupied rather that GRT basis?

No No Yes Yes No Yes

12. If your vessel arrived at 10 p.m. and departs at 6am the ff. day, are you charged an equivalent of two days port dues?

Yes Yes Yes Yes Yes Yes

13. Does your company deem it necessary to operate your own container yard?

Yes No No No Yes Yes

Justification.

Equipment Monitoring

volume is very small

High maintenance

cost

High maintenance

cost

For better monitoring

For low cost of

operations


Table 3.26 reveals that shipping lines find the port storage charge to be quite high. This

is followed by informal charge. All other charges are basically assessed by the shipping

lines as average or low.

Table 3.26 Ranked Port Charges by Shipping Lines Number of Respondents by

Ranking of Costs/Charges

1 Cost items

1-2 3 4-5

Port charges 5 1

Arrastre charges 5 1

Stevedoring charges 5 1

Quay crane charges 5 1

Wharfage rates 5 1

Port Storage 1 5

Port dues (dockage) rates 5 1

Pilotage rates 4 2

Tug service rates 1 4 1

Trucking rates 1 4 1

Stuffing/Stripping rates 2 1

Reefer Plug rates 4 2

Weighbridge rates 1 3 1

Informal Cost (bribes) 1 3 1 Rank 1-2 = very low and low; 3=average; and 4-5=high and very high. Source: Northern Mindanao Logistics Survey, 2010


4. ISSUES AND MEASURES

4.1 On the World Bank Report

The 2006 World Bank Report-IFC on cross border trade claimed that the cost to

export a 20-footer container is US$1,336 in the Philippines as compared to US$ 848

in Thailand, US$335 in China and US$ 382 in Singapore.

The breakdown of the US$1,336 transport cost in the Philippines, as cited by the

World Bank covers four areas, namely (a) Documentation, (b) Inland Transportation,

(c) Customs Clearance and Technical Control, and (d) Ports and Terminal Handling.

Ports and Terminal Handling, which entails the biggest chunk at US$994 of the

US$1,336, includes domestic transshipment (US$500), cargo handling/arrastre

(US$175), terminal handling charge (US$45) and port charges (US$274).

4.1.1 Breakdown of Port Related Transport Costs /TEU, WB Report

Port-related costs are those paid to PPA or PHIVIDEC (wharfage) and those

paid to the terminal operator (container handling).

Table 4.1: Comparative Breakdown of transport costs per TEU Particulars WB-reported

Rates (US$)

Rates at

CDO/MCT

Remarks

Domestic Transshipment 500 NA

Cargo handling/ Arrastre 175 Php974.50

(US$22)

Terminal Handling

Charge

45 NA Charged by shipping

lines @US$104/TEU

Port charges 274 PhP259.70

(US$5.86)

Total Port & Terminal

Handling

994 PhP1,233.70

(US$27.87)

For export cargoes a 20-footer container from Northern Mindanao will

entail wharfage and container handling charges amounting to USUS$5.86

(PhP259.70) and USUS$22 (PhP974.50) only at exit port.

Combined port-related export costs (wharfage and container handling)

represent a measly 2.0 percent of the total USUS$1,336 WB figure or merely

2.8 percent of the USUS$994 Ports & Terminal Handling component-charges.

The World Bank erred in its 2006 World Bank-IFC “Cost of Doing Business”

Report, particularly on Cross-Border Trade where the Philippines was claimed

to have the highest cost of exporting compared to other ASEAN countries like

Thailand, Vietnam and Indonesia.

Ports and terminal handling rates for export/import cargoes in Northern

Mindanao are the lowest in Asia.


4.2.1 Terminal Handling Charge (THC) and other Surcharges

Terminal Handling Charge (THC) has been a source of contention since its

introduction in 1991. Asian shippers have fought for their removal as the THC

has become an extra charge over and above the freight rate. The World

Bank-IFC included THC in the computation of port related charges in arriving

at its conclusions as the term is indeed misleading.

For containers shipped on an FOB (Free-On-Board) terms, which specifies

which party (buyer or seller) pays for which shipment and loading costs,

and/or where responsibility for the goods is transferred. The shippers at the

origin port of shipment are responsible for paying the THC at the port of

loading. This is defined as the Origin THC. The consignees or buyers of the

cargo are responsible for paying the freight rate and the THC (or equivalent)

on the discharge port of destination, known as the destination charge. This is

consistent with the Incoterms (International Chamber of Shipping) definition.

Since 1991, most shipping lines have introduced separate charges for the

freight rate and THC.

In Indonesia, the THC has been successfully reduced while in China, the

Chinese Government has announced the conclusion of its investigation into

the THC issue, stating that THC is in nature an integral part of the freight.

The Federation of ASEAN Shippers’ Councils (FASC) and Asian Shippers’

Council (ASC) emphasized that THC is an integral part of the freight, that all

costs shall be inclusive in the freight as an “all in” freight rate. Hence,

it should be shouldered by the party who secures the shipping service and

thus pays the freight.

Table 4.2 Cargo Handling activity & applicability of THC Activity Covered by

1. Delivery Empty Shipper/consignee

2. +all associated clerical work and reporting THC

3. Receiving full (+all associated clerical work & reporting) Arrastre Charge

4. Inspection and reporting condition of

container/completion interchange

Shipping THC

5. Inspection and reporting of seals and wiring,

removal invalid labels, re-sealing

Shipping THC

6. Movement of container on/from chassis Arrastre Charge

7. Internal transport of container to or from stack Arrastre Charge

8. Handling container into or out of stack Arrastre Charge

9. Storage of full container within time limits defined

by port authority

Arrastre Charge

10. Storage charges after free storage period Shipper/consignee

11. Take laden box out of stack Arrastre Charge

12. Internal transport from stack to ship’s side under hook Arrastre Charge

13. Move of container from ship’s side to ship’s rail Stevedoring/Freight rate

14. Move of container from ships rail into ship’s cell Stevedoring/Freight rate

15. Cranage Stevedoring/Freight rate

16. Opening and closing of hatch covers Stevedoring/Freight rate

17. Lashing of container Stevedoring/Freight rate


Activity Covered by

18. Physical & clerical planning of vessel operation

+reporting

Stevedoring/Freight rate

19. Overtime Stevedoring/Freight rate

20. Wharfage Shipper/consignee

Source: Study Team 2010

Note that actual terminal handling activities with costs borne by the shipping

lines are only items 3, 4, and a portion of item 1, which does not warrant the

USUS$100 charge.

The primary issue against THC in the Philippines however, is that the actual

terminal handling (arrastre) charge is paid by the shipper/consignee directly to

the terminal operator and not by the shipping line. In effect, THC in the

Philippines is an arbitrary charge and has nothing to do with land-based

terminal cost recovery. Through the THC, shipping lines are earning more

than the cargo handling operator who are actually performing the service.

Hong Kong, India, Singapore and China shippers/consignees do not pay the

terminal operator handling charges similar to arrastre. Terminal operators

collect terminal services from the shipping line and, thus, THC charges by the

shipping lines is justified. Whether the rates/charges per country are justified

is another matter.

Table 4.2 THC Rates

Country Currency

Charges

20’ In USD 40’ In USD

Philippines USD 100 100 130 130

Hong Kong HKD 1,600 206 2,400 309

Japan Yen 25,000 264 37,000 391

Malaysia MYR 300 93 450 139

Pakistan USD 90 90 110 110

Sri Lanka USD 120 120 170 170

Source: Shipping lines THC advisory 2009-2010

Shipping lines collect a uniform THC for the entire country irregardless of the

port of call. However, arrastre rates usually differ from one Philippine port to

another making the terminal cost per port of call variable. A comparative

arrastre rates for selected international ports in the country is shown in

Chapter 2 (Table 2.16).

In a research initiated by Center for Research and Communication (CRC) and

Philippine Chamber of Commerce and Industry (PCCI) “Cost to Export: Is the

Philippines (Really) Uncompetitive?” claims that the Association of

International Shipping Lines (AISL) admitted that a major portion of the THC

is paid by the shipping lines to the cargo handler for stevedoring services.

THC is a mechanism by which shipping lines recover the expenses of land-

based cost. Stevedoring services (service performed on board vessel) has

been traditionally for the account of the shipping lines and stevedoring


charges are bundled with freight. The payment of stevedoring services

through THC is not only highly irregular, it is also unfair for Philippine FOB

shippers/exporters who are practically subsidizing their buyers freight cost by

paying the THC.

The admission by the AISL is unfair to the shippers and should be addressed.

A. Findings

THC as an Integral Part of the Freight Charge

a. When containers are moved across the globe using transshipment points, land

based cost in these transshipment points are included in the freight rate.

b. When other methods of land transport is used such as rail/road to deliver

to inland destinations, all land based cost are included in the freight rate -

E.g.: Inland, delivery points of USA, Europe & Russia

c. Up to 1994 THC was part of Freight.

THC is Anti- Competitive and Non Transparent

a. It is forced on shippers’ and thus it is non-negotiable

b. There is a profit element as well as a over recovery

c. Charges other than the so called Land Based charges are included in the THC

d. It violates the principle of free market forces (supply and demand)

e. If THC is an actual recovery of land based cost, why are Philippine

shippers paying arrastre (cargo handling) charges directly to the cargo

handling or terminal operator? (see Maersk Line THC Table)

f. It violates the simple principle of “no work, no pay”.

Effects on Mindanao Exports (on current levels)

a. It contributes to making Mindanao exports uncompetitive.

b. Increases cost for FOB shippers

c. Only a small section of the business community (multinationals and large

scale exporters) has the bargaining power of reducing costs.

d. THC has continued to increase since 1997. There is no guarantee that

THC will not increased further.

e. It is a bad reflection on Mindanao port and handling charges which are

actually the lowest in Asia.


B. Legislation is Necessary

a. To prove that THC pricing mechanism is an anti-competitive practice in a

free market economy.

b. Legislation is particularly necessary to protect the interest of the small and

medium scale shippers

c. There are mechanisms in place in the USA and EU to prevent price fixing

(anti trust)

d. There are also mechanisms in place in the USA and EU which compels

shipping lines to file details of pricing with the authorities. These

authorities have wide powers to monitor unfair pricing.

e. Helps to keep export products competitive

The government, the Philippine Shippers Bureau, PHILEXPORT and various

shippers’ associations should unite and engage the Association of

International Shipping Lines (AISL) in a dialogue against the arbitrary

imposition of the THC in the Philippines.

The large portion of land based cost namely “arrastre” is already paid by the

shipper. Some cost such as reporting, documentation and empty container

handling, empty wharfage are some of the terminal costs that are borne by

the shipping lines, but which costs are already part freight as these are not in

any way related to product shipment.

The need for shipping lines to charge some form of THC to recover land

based costs is recognized but the cost should be properly itemized and

explained to the shippers. THC should be imposed on a port to port basis

given the disparities in handling rates among the different ports in the country.

C. Other Shipping Surcharge

Surcharges should be temporary in nature and should be removed when

normality resumes. By having a simplified freight tariff after due

consultations, there would be less confusion and disputes, thus paving the

way for improved shipper-carrier relationships.

4.3 Transshipment

Domestic transshipment of FCL containers have not been an option for exporters. In

transshipments, shippers will have to pay on top of domestic freight domestic arrastre

and wharfage dues at origin port, at Manila or Cebu discharging port, trucking to

international port and again wharfage and export arrastre at the final loading port. All

charges are subject to 12% Value Added Tax.

Domestic freight rates are higher than foreign freight rates per nautical mile.


In an interview, an exporter of marine products from Northern Mindanao was offered

freight rate that is USUS$1,000 lower than the usual rates his company is paying.

The hitch however is that cargo should be shipped from Cebu. Upon checking with

local freight rate and charges, he found out that it will cost his company

approximately PhP80,000 (USUS$1,770) in freight, handling and associated costs to

bring his company’s 40footer refrigerated container to Cebu.

4.4. Port Operational Issues

4.4.1 Mindanao Container Terminal

With increasing domestic and foreign traffic, MCT cannot just rely on its four

units of RTGs and one unit reach stacker for its yard operations.

Operationally, prioritizing vessel over yard (withdrawal) operations is

strategically appropriate. However, with domestic containers enjoying only

two days of free storage privilege, this becomes a problem and complaints of

delayed withdrawal will abound. Long waiting time of hauling trucks will

prompt trucking service providers to seek for higher rates to compensate for

the delays and on their inability to complete multiple trips.

Shippers will also need to pay overtime to employees, stripping and

warehouse receiving crew or pay overnight charges to truckers.

Employing other types of handling equipment such as empty handlers is not

feasible at MCT due to the unique design of its yards which employs

container slippers. Pavement block construction on the yards has also limited

the use of MCTs container reach stacker. This could mean that the container

yards were designed exclusively for RTG type of operation and front end

loaders (reach stackers, forklifts) were not considered in the ports design

criteria.

As traffic volume increases, MCT will need to improve its yard handling

capacity and additional RTGs may be the only option to keep up with higher

demand.

Demand versus capacity projection will guide PHIVIDEC and MCT in deciding

when port expansion should commence.

4.4.2 Cagayan de Oro Port

CDO port has the advantage of having long berths, wide storage areas and

covered transit sheds. Efficient container yard operation is however hampered

by the exclusive use of container front end loaders, mostly acquired surplus or

second hand. Though the cargo handler is well equipped based on inventory,

equipment reliability becomes a major issue for the CDO port.


Until 2009, CDO cargo handling tariff is thirty percent lower than that of the

ports of Davao and General

Santos. The cargo handling

operator’s ability to acquire

modern cargo handling

equipment may have been

curtailed by issues of

affordability. With the

approval in 2009 of its tariff

leveling petition, it should be

in a position to replace

ageing front end loaders

and improve equipment

reliability.

The continued and

increasing use of domestic liners of ten footer containers is also a problem in

yard and equipment planning.

Unlike MCT, CDO port does not have an Electronic Data Interchange (EDI)

system and due to apprehensions by domestic shipping lines of higher

handling costs, utilization of the CDO port quay crane has not been made

compulsory.

4.4.3 Vessel Dues

PPA currently charge berthing fees on a GRT-day basis. The Tariff and

Customs Code, which originally embodied the berthing fees, did specify that

the berthing charges shall be assessed based on the GRT of the vessel for

the first 24 hours or fraction thereof. However, in the course of restructuring

the port tariff in the early 80’s and in order not to deal with the nitty-gritty and

assessment conflicts with the shipping lines, the PPA decided to change the

charge base to GRT per Calendar Day due to the following reasons:

a. There were some problems when to reckon a vessel as having arrived

and when to reckon it as having departed;

b. The shipping lines were contesting that they should not be made to

pay for the x number of hours due to the delay in the arrival of harbor

pilot, delay in the arrival of quarantine launch, etc.

c. Harbor master clearances and assessments are delayed as shipping

agents frequently request for re-computation when the departure of

vessel are delayed due to problems such as winch or generator

trouble, etc. This resulted in the need for supplemental billings which

led to account build up over a period of time because the agents either

intentionally or unintentionally forgets to pay charges. This is most

prevalent among tramping vessels.

Figure 4.1: PPA reported that CDO Port's Annual Berth

Occupancy Rate was beyond 65% in 2009


d. The implementation of the present charging base of Per GRT per

Calendar Day has been going on for the last 20 years. However, with

the improvement in cargo handling productivity and the employment of

quay cranes by port operators, there is a need to revisit the berthing

dues currently charged by port authorities.

On top of these, vessels arriving before midnight and departs early the next

day are charged equivalent of two days at berth. Vessels intentionally slows

down when their estimated time of arrival (ETA) will be before midnight to

save a day’s equivalent of berthing fees.

Assessing the shipping lines based on Linear Meter Hour instead of GRT

days is most appropriate to encourage vessels to arrive on time. This will also

give the shipping lines incentive to avoid waiting for cargo or in using the port

as parking space. Besides, GRT based charges instead of actual space

occupied is not the most appropriate as some vessels have higher GRT but

shorter LOA or vice versa. Cebu run vessels (Roro) also berth stern first

requiring less berth space.

Additionally, shipping lines can demand higher productivity from cargo

handling operators and/or strictly observe Vessel Operations Commitments

(VOC). Bookings will also be better managed and cargo delivery cut-off

strictly enforced.

4.5 Domestic Sea Freight

Only Philippine registered vessels may engage in inter-island shipping.

Foreign ocean freight shipping lines may not engage in inter-island freight

shipping because of restrictions in cabotage. Cabotage refers to the practice

of maritime countries of reserving the privilege of navigating and trading along

the coast between two (2) ports within the national territory, only to vessels

which are registered in that country.

The improvement of the inter-island freight shipping will translate into

competitiveness or better competitiveness of Philippine exports.

The higher cost of domestic shipping service vis-à-vis foreign shipping can be

traced to several factors including: high fuel cost, high interest rates, high

insurance premium, low port efficiency and productivity (North Harbor), higher

taxes for domestic shipping operations, lack of comparable government

support program for domestic shipping, and higher cost in domestic liner

operations.

Based on industry statistics, majority of the vessels of the major players in the

industry Aboitiz Transport System., Negros Navigation Co., Sulpicio Lines,

Inc., Lorenzo Shipping Corp., NMC Container lines, Solid shipping, Inc. and

Cebu Ferries, Corp. are obsolete by Japanese standards and require higher

operating, maintenance and drydock costs.


4.5.1 RORO (Strong Republic Nautical Highway)

Strong Republic Nautical Highway otherwise known as Roll-On Roll-off

Transport System (RRTS) is a major project of the government designed to

help alleviate transport cost. The original concept is as floating bridges to

connect the islands for easier transport of cargo and do away with cargo

handling, its role was expanded to cover long haul routes. It is most efficient

for short-sea crossing of passenger and cargoes and a big boost to tourism. It

saw very limited success in long-haul sea freight.

Short Haul RORO

The RRTS-SNRH program has been very effective for short sea crossing

such as Mukas-Ozamis, Balingoan-Camiguin, Dipolog-Dumaguete, Surigao-

Leyte among others. This has not only lowered the transport cost of goods,

but more particularly improved mobility and enhanced tourism. Cargoes are

efficiently transported via wing vans or open stake trucks and freight rates

have been reasonable.

RORO/PAX Container Carriers

RORO/Pax or Roro-Passenger Container vessels are carriers that carry both

passenger and containerized cargoes. Containers are mounted on a chassis

and is towed to the vessel hold via a terminal tractor and where it is jacked

up. Unlike short sea Roro, the chassis mounted containers are lashed to the

vessel deck in preparation for voyage.

Long Haul domestic shipping have started to change some of their strategies

from employing RORO-Passenger (RORO/PAX) Carriers to purely container

freighters. Aboitiz Transport System, Negros Navigation, Ocean Transport

and Sulpicio Lines operate cellular container carriers and/or pure container

carriers in addition to their RORO operations.

Shipping companies which ply longer inter-island distances, such as Manila-

Cebu and Cebu-Zamboanga, among others, are traditionally not dependent

on revenues from passengers alone. They earn their profits from cargo.

Figure 4.2: Left: Balingoan-Benoni RORO Vessel; Right: Wing Vans ideal for RORO


Though contributing only roughly thirty percent of revenues, passengers

however pay cash while cargo is oftentimes on credit terms.

The introduction of the RORO/PAX concept in the Philippines was mainly due

to the inability of cargo handling operators to efficiently handle containerized

cargo due to lack of suitable equipment. Even today, many cargo handling

operators still rely on liner owned equipment to handle containerized cargo

prompting the PPA to reverse the 65%-35% rule in favor of the shipping lines.

RORO/PAX has provided shipping companies with flexibility and

independence from the inefficiencies on the cargo handling service providers

during the last decade.

Historically, ships

carry passengers

onboard because it

translates to

scheduled departures

and specific routes,

elements that assure a

cargo clients that they

could plan and

manage the

movement of their

goods.

With the increase in

fuel prices, and stiff

competition from

budget airlines, RORO/PAX carriers are burdened by lower ridership and

higher fuel costs as they have to maintain speeds which does not contribute

to fuel efficiency measures else passengers will complain of delays.

Conventional container carriers however can reduce speed and save fuel.

Foreign shipping lines have reduced speed of their vessels from 25 knots to

20 knots and save 15 to 20 percent fuel.

Survey results indicate that seventy two (72) hours sailing from Cagayan de

Oro to Manila is still acceptable to majority of Northern Mindanao shippers.

Shippers of perishable cargoes such as tomatoes prefer faster sailing time in

the absence of ventilated containers.

Northern Mindanao cargo handling operators have also improved vastly on

their container handling capabilities. Ship to shore gantry cranes in Northern

Mindanao can achieve 20 to 28 moves an hour, a far cry from the seven (7) to

ten (10) moves per hour using ship’s gear thereby reducing port time. This

improvement in productivity have nullified RORO/PAX carriers advantage of

faster loading and unloading of containerized cargo.

Container carrying RORO vessels are further disadvantaged by having to

maintain ancillary equipment such as yard tractors and hundreds of chassis.

Vessel capacity is not maximized due to dead spaces above and below

Figure 4.3: Container Vans unloaded from a RORO/Pax Vessel


chassis mounted containers stowed on its cargo decks. A 180 meter

dedicated container carrier can load as much as 600 TEUs or over while a

RORO/PAX carrier can only carry 200 TEUs mounted on at least 100

chassis.

The difference in handling rates is a substantial saving for RORO operators

especially when RORO vessels were exempted from paying stevedoring

charges starting in 1997. This despite their continued reliance on cargo

handlers to provide stevedores for work on board vessels for trailer landing

leg deployment/redeployment, chuck positioning, lashing/unlashing, etc.

There is limited cargo handling interplay for pre-mounted outbound RORO

containers as the shipping lines own and operate the tractors required to tow

containers from marshalling yard to the vessel. There had been debates over

this issue as towing of chassis has been claimed by cargo handling operators

and part of their function and being the authorized cargo handling operator,

should provide the services to the shipping lines.

The shipping lines in return argued that the RORO tractors and trailers should

be treated as ship’s gear. The cargo handling operators in return argued that

in conventional container carriers, the ship’s gear (ships crane) is operated by

the personnel of the cargo handling operator.

This issue has not yet been resolved and the tractors are still owned and

operated by the shipping lines and employs their own drivers operating inside

port premises.

Figure 4.4: Workflow for CHA-RO (RORO/PAX)


Aside from arrastre charges, one of the cost drivers related to cargo handling

for RORO containers are Lift-up and Lift-off services. Not all chassis mounted

containers are withdrawn from the ships hold directly for delivery thereby

limiting cargo handling interplay. From the RORO vessel, most RORO

containers are lifted off the chassis and stored at the port’s marshalling yard

and lifted on to another chassis when ready for withdrawal. The same

interplay, but this time in reverse order is performed by the cargo handling

operator for containers for loading to vessel.

In addition to arrastre and lift-up/lift-off charges, RORO operators are saddled

with added cost such as fuel, drivers, repair and maintenance and depreciation in

operating terminal tractors and chassis. Some shipping lines load the tractors to

the vessel to serve the same function at its next port of call.

Cargo interplay is necessary due to the following:

a. Chassis are not registered with LTO and cannot operate outside port zone;

b. Chassis not designed for highway use (no brakes, no signal & brake lights);

c. Not enough tractors to directly withdraw cargo to outside port container yard;

d. Time element;

e. Not enough RORO marshalling yards to store chassis mounted containers

(without spacing, a forty foot chassis will occupy 30 square meters) for

inbound/ outbound marshalling of RORO containers, a vessel with 200

TEU capacity would need about one hectare of marshalling yards. If two

or three vessels call at the same time, ports will be congested.

Conventional container handling can stack containers at multiple tiers and

thus save valuable port space.

MCC Transport, a domestic shipping line which is a joint venture partnership

between MCC Transport Philippines and Aboitiz Transport Systems has been

offering freight rates much lower than those offered by RORO vessel operators.

RORO/PAX and Cargo Handling

The introduction and continued development of the RORO/PAX system in the

Philippines have stunted the development of the cargo handling industry. The

low level of domestic cargo handling rates relative to freight, the limited

interplay model in the RORO/PAX system and the continued use of the ten

footer container has contributed to the underdevelopment of the cargo

handling system. The inability of many cargo handling operators to procure

necessary and suitable equipment can be attributed to low cargo volume, low

revenue, and high equipment cost.

Similar to the trucking industry, most of the country’s cargo handling operators

have deployed second hand container handling equipment. This is the practice

even for high volume ports like Cagayan de Oro, Cebu, Davao and North

Harbor. Equipment reliability issues are common among these ports.


Due to higher foreign container volume, the port of Cebu have ten units of old

second hand rubber-tired gantry for its yards operation, which is more than

what is needed to handle its container traffic had the units been new.

Similarly, Sasa port in Davao deployed seven brand new and one second

hand unit of container reach stackers. However, the cargo handling operators

at these ports were able to afford the equipments from foreign stevedoring

generated revenue (see table 2.16 and 2.17).

The port of Cagayan de Oro despite having higher domestic traffic but majority

of which is carried by RORO have only two ageing reach stacker and a second

hand top lifter and a variety of second hand 24-ton forklifts. Presently, a brand

new reach stacker cost Euro430,000 C&F and would normally have a

guaranteed service life of 10 years under Philippine conditions where the labor

component in repair and maintenance cost is cheap.

Some advocacy group like to Coalition for Shipping and Port Modernization

and the transport policy group of the Center for Research and

Communication-University of Asia Pacific have even proposed to exempt

RORO containers from payment of arrastre charges. Its argument is centered

on the limited interplay model. Had their proposal saw fruition, it would have

been the demise of domestic port modernization dreams of the PPA and

further stunt the growth of the cargo handling industry.

The ironically the port of Cagayan de Oro is quay crane equipped as required

by PPA but is also designated as Mindanao’s primary nautical highway and

RORO gateway.

Trailer Horse and RORO/Pax Safety

The trailer horse is a device which provides added support for loaded chassis

lashed on vessel decks. Chassis landing leg failures are common occurrence

even on land. In the Philippines, Roro carriers do not employ this device

which would assure that chassis and containers would not topple down in

rough seas.

4.5.2 Freight Quotations and Freight Rates

Figure 4.6: Trailer Horse


Freight rate setting has never been transparent. Shippers pay whatever fees

shipping lines charge for freight, terminal handling and various surcharges.

Most shippers particularly those without the negotiating posture have

accepted this as a fact of life.

Though complaints are common, shippers have not bonded together

effectively to demand transparency by shipping lines. In addition, shipping

lines takes approximately one to two weeks to submit freight quotations. This

practice by foreign shipping lines has not provided shippers with enough

flexibility as to timing and scheduling of exports. This also limits the shipper’s

ability to canvass for competitive rates and/or negotiate the same.

This problem is not too prevalent with large shippers which the shipping lines

tend to favor not only with lower rates but with better services. Some foreign

shipping line offices and/or agents are not empowered by their principals to

provide freight quotations which explains the delay as quotations are solely

issued by their foreign offices.

This could also be a strategy by the shipping lines to prevent over-booking.

The fault could also be attributed to some shippers who over-book but does

not deliver the cargo for a particular voyage, preventing the shipping lines to

accept other cargoes when their vessels are already laden in accordance with

advanced bookings. Over-booking is however, a custom by large shippers

rather than small ones according to some foreign shipping line

representatives interviewed.

4.6 Trucking

4.6.1 Empty Backhaul

The number of empty trips is a way to measure the efficiency of road freight transport

activities as empty backhaul are a waste of resources for truckers. Some possible

explanations for this phenomenon are the technical restrictions for some typical

freight transport activities that cannot take return loads (e.g. empty container return

or empty repositioning), unavailability of cargo for backloads and time constraints.

Empty backhaul and/or empty container repositioning does not allow the trucker the

optimum use of transport assets. However, such practices become necessary in the

face of cargo security issues. Transport losses due to pilferage, cargo hijacking, theft

or cargo loss weight are the primary reasons for empty repositioning. Primarily for

added security, sealed containers cannot be opened without owner’s presence and

thus, deter pilferage and theft.

Any loss therefore, containers with broken seals without owner’s presence are

chargeable against truckers, port operators and/or carriers; whoever has custody of

the container where the breaking of the seal occurred.


Empty backhaul is however not an efficient way in trucking operations. Together,

shippers and trucking providers must find ways to increase truck efficiency through

backloads to further reduce trucking costs.

Trucks link the inland factories and agricultural production areas with the ports and

airports and also play an important role for domestic distribution. Speeding up

trucking will decrease transit time and increase supply chain quality. Road safety is

an issue with trucking; additionally road quality influences break downs which create

congestion on roads.

Recommendation of improving road quality and separating trucking from motorbike,

motorela, trisikad and other slow moving vehicles on the most frequented streets

roads and highway to increase traffic flow resulting in shorter trucking times to and

from ports. Clearing roads of illegally parked vehicles, junk vehicles, illegal structures

and other road frictions should be immediately implemented. Installation of standard

road signs, road markings, pedestrian lanes, and left turn pockets is recommended.

Further recommending widening and/or geometry improvement on difficult road

sections and intersections to enhance safety.

Improvement in road transport infrastructure will enable Northern Mindanao land

transport operators to make significant improvements in vehicle utilization and

productivity. These improvements will be reflected in significant increases in vehicle

payloads and reduced transit times between production areas to vital transit points.

4.6.2 DOTC-LTO Fines/Penalties for Traffic & Administrative Violations

The approved rates and listing of LTO fines and penalties for traffic and

administrative violations needs to be carefully reviewed. The list is not only

confusing, some of the violations listed are vague and/or subjective and could be

subject to abuse by apprehending authorities. (See Annex 3.5)

The lists lumps up violations for private, commercial as well as Public Utility

Jeepneys (PUJs) and taxi service and its confusing as to what applies where. It is

filled with grammatical and construction errors. The list is posted on the LTO website.

Highway Patrol

Local highway patrol units do not really patrol the highway. Probably to save

on fuel, highway patrol officers are stationed at strategic points along the

highway and act as checkpoints and where trucks are routinely flagged for

inspection. They are less concerned of moving violations but rather on the

correctness of vehicle registration and franchises. Due to the agency’s “no

approach” policy, trucks and other vehicles with probable documentary

violations and who may not be willing to pay informal fees will simply park on

the side of the road and wait for the Highway patrol or LTO personnel to leave

before continuing on their journey.

Inconsistencies


Ironically, along the national highway and sometimes passing the checkpoints

are motorcabs (a local tricycle designed using 2 stroke engines with no

transmission, alternators, lights, chassis numbers etc.) which cannot be

registered with the LTO nor franchised as a public conveyance by the LTFRB

plies the highway for passengers and not getting apprehended by traffic and

transportation authorities.

Such vehicles are not road worthy

much less appropriate for highway use.

They are given authority by the

barangay captains and enjoy political

protection. These vehicles however

poses traffic hazards and danger to the

riding and commuting public. They also

slow down traffic flow along the Puerto,

Tablon, Agusan and Bugo sections of

the highway to the consternation of

truck drivers and other legitimate

motorists.

Similar to trisikads, they cannot be issued citation tickets as they do not carry

plates or tags and the only way to apprehend them is only through impounding.

4.6.3 DPWH Weigh bridges-DPWH

Weigh bridges are located on the right side of the highway prior to entering Cagayan

de Oro City from both east and west section of the BCIR. Trucks are weighed before

entering the city. This however defeats the purpose of monitoring truck weights to

protect the highway from overloading as trucks are weighed after they have already

passed the highway.

Trucks from Cagayan de Oro going outwards are not weighed.

4.7 Harmony of Policies and Programs

4.7.1 DPWH-PPA Cargo Weight Policies

DPWH mandates that vehicles shall have load limits of 13.5 tons per axle. This policy

has been a bane to truckers who have no idea what their axial loads are once loaded

with containerized cargoes.

Shippers also encountered similar problems as they have no idea of the exact weight

of their cargoes and will rely on commercial weigh bridges located near or at the port.

Cagayan de Oro port and MCT imposes compulsory weighing of outbound cargoes.

Inbound cargoes are presumed to be weighed at the port of origin.

Figure 5.7: Motorcab


Inconsistencies

PPA on the other hand is

observing ISO 1995 and allows

20 foot containers up to a

maximum gross weight of 24

tons. PPA weighs the whole

truck, deduct truck tare weights

to determine container gross

weight. Information on the

weight of containers is critical

for proper stowage planning by carriers.

PPA also allows tandem loads of 2 units 20 footer container on a 40 footer

chassis which by DPWH standards may weight more than 13.5 tons per axle.

DPWH and PPA should harmonize their load limit policies.

Development Strategies

To fast tract the development of the land transportation industry in Northern

Mindanao, the following recommendations are given:

a. Increase the region’s share of the total national road budget;

b. Introduce immediate development on difficult and dangerous and high

traffic density road sections;

c. Encourage the participation of the private sector in road infrastructure

development;

d. Consult transport service providers and players in identifying priority road

and bridges for development.

A reduction in transactions costs in land transportation can be done through

the following:

a. Pursue consolidated efforts on the part of the DENR, DILG, DPWH and

DOTC to review existing laws/regulations dealing with legitimate transport

permits and corresponding fees;

b. Institute public information and dissemination mechanisms on the

procedures, charges and clearances required by implementing agencies,

c. Organize truck operators/owners into a vigilant and unified association;

d. Pursue an education campaign among members of truckers’ associations

on awareness and compliance of required transportation permits;

e. Minimize the collection of illicit fees by using the media to expose cases of

erring/corrupt government personnel;

Figure 4.9: MCT Weighbridges


f. Strict imposition of charges against government personnel if the quality of

delivered cargoes deteriorate while being impounded by them despite the

presence of required documents.

4.8. Security, Clearance and Inspection Costs

Despite the issuance of Executive Order 554 issued in 1996 instructing all

government agencies to improve the competitiveness of the country’s export sector

by eliminating fees and charges imposed on export clearances, inspections, permits,

certificates and other documentary requirements, several regulatory agencies have

not yet implemented this policy particularly BIR, Bureau of Customs, BFAD and

DENR.

4.9 Value Added Tax

Mindanao shippers are not only burdened by high freight rates, they are also heavily

taxed. Mindanao goods shipped to Manila markets are assessed Value added tax on

cargo handling, and wharfage at Mindanao ports, vat on freight and again vat on

wharfage and cargo handling at destination port. With this level of multiple taxation,

the only way for Mindanao products to be competitive is to lower down production

costs e.g. labor, inputs and profit margins. Better else, to produce goods that are not

produced anywhere else.

Moreover, Mindanao producers, shippers and transport operators pay higher fuel

pump prices (PhP2.00 to PhP3.00 per liter) as fuel is also shipped to Mindanao and

whose freight and handling is also subjected to VAT charges. Shippers also have to

pay VAT on freight, wharfage and cargo handling of raw materials shipped to

Mindanao such as animal feed ingredients, locally produced or transshipped fertilizer

and packaging materials keeping production costs high.

The value added tax, particularly on freight (a function of distance) has inclined the

playing field against Mindanao shippers. Competing under this unfair environment

does not bore well for Mindanao, the food basket of the Philippines.

Not only are some Luzon transport infrastructure and fare structure highly subsidized

by government such as the Philippine National Railway, MRT and LRT, commercial

users of North Luzon Expressway, South Luzon Expressway, Southern Tagalog

Arterial Road among others are not assessed value added tax on their toll fees.

It is therefore recommended to zero rate the value added tax for Mindanao freight,

cargo handling and wharfage. This will translate into at least twelve percent savings,

which affects prices for products and higher margins and better competitiveness of

Mindanao products.

Legislation is Necessary


The removal of VAT on Mindanao cargo handling, wharfage and freight may

be termed The Mindanao Freight Equalization Program.

4.10 Freight Equalization Scheme

Freight equalization through removal of Vat from sea freight of all commodities

flowing to and from Mindanao.

Freight Equalization can assist in alleviating the comparative domestic freight cost

disadvantage incurred by Mindanao products to markets. Its objective is to provide

Mindanao industries with equal opportunities to compete in Luzon markets,

recognizing that, unlike their Luzon counterparts, Mindanao shippers are burdened

by high freight, wharfage, handling and VAT cost.

Freight equalization Scheme is a tool for Mindanao economic development in

response to the underlying distance cost penalty.

The rationale is for equitable treatment of industry with respect to domestic trade and

specifically, access to production inputs, and the markets for goods produced. To

achieve this, neutrality in terms of access to transport infrastructure is essential.

The Philippine Government has actively engaged in pursuing this equity between the

three main islands only through its Strong Republic Nautical Highway which has little

impact on sea freight cost reduction for containerized freight.

4.11. Timely Policy Dissemination

Despite the technology, regulatory agencies including the Bureau of Customs has not

provide timely dissemination issuances or policy updates especially for provincial

areas. Their information systems including their websites are not regularly updated,

that even regional offices, especially at field level, receive delayed updates by as

much as a month after the issuance of new policies.

5 BEST PRACTICES OF LOGISTICS PLAYERS


5.1 Exports and Exporters

5.1.1 One Stop Processing Centers

Although the concept of the “one stop” is literally a single venue with collective

agencies to process documents, the realities are not as what is intended. The system

of regulation for commodity clearances are yet to be institutionalized (i.e. regional

heads of regulatory agencies delegating approving authorities posted at the venue). At

present, there are three (3) one stop processing venues in Northern Mindanao at least

for exports namely: the PPA One Stop Processing Center located at the CDO Base

Port, the MCT Terminal Building where most of the shipping lines, the terminal

operator and PHIVIDEC Industrial Authority are housed, and the One Stop Export

Documentation Center located at the DTI Regional office operated by PhilExport-10A.

The purpose is to facilitate export processing for the convenience of shippers.

Though far from the ideal set-up, the various one stop centers has alleviated some of

the problems of shippers and has effectively shorten document processing time.

5.2 Trucking Industry

5.2.1 Water Brakes

Northern Mindanao Truckers practically invented the “Water Brakes” for added

operational safety. Water brakes comprises of a water tank and a series of hoses

with water sprinkles at its end directed at the brake drums of trucks. In traversing

steep inclines, truck drivers will engage the water brakes and spray water on the

brake drums to reduce frictional heat and keep the brakes from overheating. This will

ensure that the brakes will hold once applied.

5.2.2 Twenty-four (24) hour delivery service provision

Truckers cover all major routes along the four corridors and trucking rates are almost

uniform per kilometer except for short distance door to door trucking. There is no

discrimination of cargoes and truckers are willing to provide 24 hour trucking service

with no additional overtime charges.

5.3 Customs Clearing

5.3.1 VASP (Value Added Service Provider)

The Customs Modernization Act allows for electronic filing of customs documents.

EDI services are provided through a proprietary Value-added Network, Direct Trade

input through privately-operated network stations and a privately operated port based

entry and encoding system. BOC uses ASYCUDA ++ and provides for automatic

payment and on-line release of goods to speed up cargo clearance.

The introduction of ASYCUDA World will allow greater use of the Internet for

submission of BOC documents. For most cargoes, the time for cargo clearance will

be reduced to only a few hours.


Additional improvements should be realized as BOC develops its enforcement

database and improves its risk management techniques. At present the BOC applies

selective enforcement through three physical inspection procedures:

- Green lane - no inspection of cargo is done other than random sampling

- Yellow lane - inspection of documents only

- Red section - 100% physical inspection of cargo is conducted

Both CDO Port is now implementing the e2m (electronic to mobile) system for import

clearance while MCT will also be adopting such scheme within the year.

5.3.2 Inspection Areas for Imported Items

The Bureau of Customs in partnership with PPA and PHIVIDEC Industrial Authority

have provided inspection areas within the port for free. Unlike in other areas where

inspection sites are located outside of port zones, costs of customs import inspection

are mainly for inspection fees and facilitation services with no additional cost on

handling and trucking to bring containers out of the port zones for inspection.

5.4 Port Management

5.4.1 International Shipping and Port Security (ISPS) Code

Cagayan de Oro Port in response to security codes enforced by the government of

the United States of America for US-bound shipments endeavored to update and

cause the compliance of ISPS code standards. OROPORT the cargo handling

operator spent a substantial amount of funds to effect the segregation of foreign and

domestic cargo and took measures to prevent contamination of all foreign-bound

cargoes. PPA and OROPORT security personnel also attended trainings and

technical sessions on the ISPS Code security procedures and certification.

5.4.2 VOC (Vessel Operations Commitment)

Cargo handlers are made to commit the time it would take to complete vessel

operations and to strive to hit their target. Committed productivity rates shall not be

lower than PPA contracted productivity standards.

5.4.3 Labor Unions

As part of its commitments, PPA requires cargo handling operators to respect

employees’ rights to self organization and mandates it to recognize employees union

for collective bargaining, grievance handling and Labor-Management Councils

(LMCs).

5.4.4 VTS (Vessel Tracking System)

The Mindanao Container Terminal has a VTS installed in its facility but was not

initially made operational due to the unavailability of qualified personnel as well as


lack of budget to operate the system. PHIVIDEC Industrial Authority in cooperation

with the Philippine Coast Guard (PCG) was able to seek funds from the AusAid CIQs

grant to put the system in operation. As of February 2010, the VTS is fully operational

and manned by qualified PCG personnel. It effectively directs vessel traffic and

minimize smuggling and enhance safety at the Macajalar Bay.

5.4.5 PPA Port revenues being plowed back for port infrastructure projects

The Philippine Ports Authority (PPA) has devised a mechanism where port revenues

such as those derived from wharfage, are plowed back to fund port infrastructure

projects in the Cagayan de Oro Port. After the completion of the Cagayan de Oro

Port expansion project phase-2 funded by the International Bank for Reconstruction

and Development (IBRD), major infrastructure projects implemented at the port are

funded by PPA funds.

Quay Cranes and various cargo handling equipment were procured by the cargo

handler as part its modernization commitments to PPA as required.

5.4.6 The Port Management Advisory Council (PMAC)

This is a multi-sectoral organization solely for the purpose of addressing port issues.

The members meet periodically in order to advise PPA on prevailing port issues

affecting the port’s various stakeholders.

6. WAY FORWARD

6.1 Institutional Coordination


The Philippine Ports Authority and DPWH needs to thresh out some conflicting

policies on truck load limits. The PPA and commercial truck scale operators weight

the whole truck rather than by axle. Clear and updated guidelines that would specify

maximum truck loads should be established by both port and road agencies. Two

identical 10 wheeler trucks but with different wheel base or different axial spacing will

have different axial load distribution. How cargoes are stuffed inside the container

will also influence axial load distribution. For port cargo pick-up, truckers will have no

idea of truck axial load factors.

The two agencies therefore must harmonize their load limit policies to prevent

confusion by shippers and trucking service providers. Truckers and shippers must

initiate this inter- agency coordination and explain industry practices for the

government agencies to consider. ISO laden container weight and international road

construction standards should also be considered in the harmonizing load and weight

policies.

There are other areas in the soft logistics infrastructure where institutional

cooperation may be explored such as the PPA port traffic authorities and the traffic

management group (TMG) of the local government, and the Highway Patrol Group

for better traffic flow at port access.

6.2 Replicable Best Practices

6.2.1 One-Stop Centers

One-stop processing/documentation export centers as in Northern Mindanao may not

be the best models, but surely they provide some convenience as users don’t have to

go to several offices in order to transact business. Improving such facility would

require regulatory agencies to assign permanent at-field level stationed

signing/approving officers at these centers, so that processing can be done at a

much faster phase.

Learning from the power outages that Mindanao is experiencing for the last few

months (and may even continue till third quarter of this year), online transactions

have their limits. Further, linking these one-stop centers may be a good idea in order

to relay and facilitate better and faster processing with or without the Internet for the

convenience of clients.

Currently, there is no formal one-stop center for imports. As such, existing one-stop

centers may be the best center to provide services in clearing imported cargo in

cases when online transactions fail.

6.2.2 BOC’s VASP

While information communications technology (ICT) is strongly gaining ground in

international and domestic transactions, there is still the need to strengthen the


Bureau of Custom’s capability to provide service through electronic processing. The

e2m program of the bureau is a novel idea where clients will be able to transact via

their cellular phones and need not use a computer for virtual access.

6.2.3 Maintaining Free Inspection Areas

The Philippine Ports Authority and the PHIVIDEC Industrial Authority are providing a

customs inspection area inside the port at not cost to the Bureau of Customs. This

service should be maintained permanently and the planned relocation of such service

outside the port should not be adopted.

6.2.4 Wharfage Discounts

According to shippers, the 50% discount on wharfage was extended to exporters till

December 31, 2009 by the Philippine Ports Authority and the PHIVIDEC Industrial

Authority. Inasmuch as this is just a small amount, it translated to a regular savings

for those shippers who ship out on a weekly basis. In accordance with Executive

Order 554, this incentive should become permanent.

6.3 Information Drive

Information drives can be done if the necessary information is at hand. The private sector

through PhilExport-10A and the other organizations like the chambers of commerce initiate

such activities on a regular basis to insure effective information dissemination. However,

these private sector groups are still dependent on the availability of policy updates. Perhaps

some level of corporate communications enhancement systems must be established within

government regulatory agencies in order for them to provide timely updates.

6.4 Logistics Training

There is a need to have tertiary academic institutions consider providing training on logistics.

In Northern Mindanao, the College of Commerce of the Liceo de Cagayan University and the

Capitol University provide some topics on “Logistics” in International Trade subjects.

There is also the need to step-up the use of the VASP. Regular training programs may be

designed with BOC and BSOs cooperation to draw a larger circle of users. This will

enhance productivity and improve transparency.

6.5 Business Support Organizations (BSO)

6.5.1 NORMINSA


The Northern Mindanao Shippers Association (NORMINSA) is the leading

organization in Northern Mindanao advocating for globally competitive logistics &

cargo transportation system. It advocates for policies that promote the

competitiveness of the logistics and transport system in Mindanao.

The association so far has met little success in its advocacy to reduce transport cost

of Northern Mindanao products for both local and export markets.

Majority of both domestic and export shippers have not joined NORMINSA and

instead rely on individual capability to negotiate for favorable freight rates. Large and

small shippers have diverse interest preventing the creation of a cohesive

organization for mutual benefit such as the reduction of shipping rates.

As in any sector of business, large firms logically enjoy preferential rates in the

logistics chain simply with the assurance of volume and transport frequency. Even

without having to join shippers’ associations, they always get discounts. This is the

segment of shippers that cause the problem of overbooking, which is a common

shipping line complaint.

However, small shippers always get the shorter end of the stick. Discounts enjoyed

by large shippers are recovered from higher rates and surcharges charged against

small shippers.

The development of a strong shippers association cannot be hinged on this treatment

disparity. Small shippers must band themselves together to form another big

shippers’ block which the shipping lines cannot afford to ignore.

Current shipping association leadership are either large shippers or service

providers. Small shippers need to be supported to take leadership roles and should

be supported by government and development agencies. Slot charter agreements

and/or consistent organized bookings and establishment of volume-induced

discounts by small shippers should be undertaken, without which, the leverage

necessary for effective bargaining is not going to be available to them.

6.5.2 PhilExport-10A

As an organization, PhilExport-10A is also in the same boat with NORMINSA.

Meager resources prevent these organizations from making headways on its

advocacies. Several advocacies had been pursued but failed to catch enough

attention to bring about needed reforms.

PhilExport-10A members must realize that the organization cannot be an effective

transformational agent if its members, particularly the small shippers will not take

seriously the organization’s objectives. Payment of minimal membership and

monthly/annual dues is just the first step in achieving the organization’s development

agenda and advocacies. Participation by all members in the chapter’s activities will

bring about a better deal for Northern Mindanao exporters in all the segment of the

logistics chain.


A cardinal rule for many exporter/importer working in difficult customs environments.

Implement controls on the outbound end of shipments, to make sure nothing appears

in (or is missing from) the required paperwork, or in the shipping containers

themselves, that will give an opportunistic official the opening he needs to hold up the

clearance. This approach also makes business sense, as it reduces the likelihood of

delay, additional costs, and corruption in the clearance process. The processes must

be rigorous: veterans of the customs trenches can tell you that it takes just one mis-

checked box to hold up valuable goods at a port. A parallel rule exporters/importers

employ is to have their brokers open the containers for review and confirm that all is

in order before attempting to clear the goods.


ANNEXES


ANNEX 1.1 PhlExport-10A

Shipping Costs and Competitiveness in Northern Mindanao DRAFT STUDY PRESENTATION WITH LOCAL PARTNERS

(a Validation Session) April 6, 2010

Brewberry Café, Cagayan de Oro City Persons Attended

Name Designation/Office/Org 1. Mr. Wilson C. Amad President, PhilExport 10A 2. Mr. Venchito C. Bullecer VP-External, PhilExport 10A 3. Atty. Roswald J. Pague (for Coll. Abedin

Macapasir) District Legal Officer, BOC-CDO District

4. Ms. Carmelita Bajarla (for RED Lealyn Ramos) Senior Specialist, DA - RFU 10 5. Engr. Jaime H. Pacampara (for Dir. Leon

Dacanay) Chief Eco. Devt. Specialist, NEDA X

6. Ma. Estrella Luz R. Peñaloza Sr. Eco. Devt. Specialist, NEDA X

7. Ms. Elvira Garcia (for Mr. Dante Clarito) OIC for Port Operations, PHIVIDEC

Industrial Authority 8. Mr. Napol G. Garcia (for Dir. Sulta Porcawa Dia) Senior Transport Specialist, LTO X 9. Engr. Virgincita Lomoto (for Dir. Jerome Dela

Rosa) Engineer III, DPWH X

10. Ms. Jenneth Balaba (for Mr. J. Rafael Paguio) Project Development Officer, OroChamber 11. Mila Lasquites (for Dir. Alicia Euseña) Senior Trade & Industry Specialist, DTI-10 12. Ms. Heidi Mendoza MBA, LINC-EG, USAID 13. Ms Lynn Sison Transport Adviser, LINC-EG, USAID 14. Mr. Noel M. Tan Project Consultant, PhilExport-10A 15. Mr. Michael Ignacio Exec. Director, PhilExport-10A 16. Ms. Rema Romualdez Technical Staff, PhilExport-10A

Session Highlights Preliminaries by Michael Ignacio

- Did the welcome, introduced participants - Stated the objectives the session

o to validate findings of the study o solicit comments and suggestions for the study

- Presentation by Michael Ignacio (while the presentation was done, comments and questions were accommodated)

o the study’s background, rationale and objectives o study methodology and approaches o Northern Mindanao’s export profile o Costs of exporting from Northern Mindanao o Profile of target respondents and survey highlights

- Presentation by Noel Tan o Logistics conditions of Northern Mindanao o Problem Areas o Issues and Measures o Best Practices of Logistics Players o Recommendations


Discussion Highlights (main discussions only) - query as to why transshipment by RORO is not an option for exports

o Mr. Tan thoroughly discussed the RoRo chain and the activities involved as practiced in the Philippines, highlighting the additional costs incurred due which makes it more costly

- Comment on cost of exporting: if possible to show a comparative how much to export

from Cebu and from other areas Mindanao o Study team will look into it as these area have different conditions from

Northern Mindanao - query on what is Terminal Handling Charge and why is it a problem

o Mr. Tan showed the activities involved on THC as well as the rates charged, he also showed how a particular shipping line would charge THC. (please see attached presentation)

- query on the possibility of exporters grouping together in order to get better rates

since shipping lines only favor large companies as they have the volume o Mr. Tan explained that for as long as there is enough volume to negotiate, its

possible, but small exporters hooking-up with a large exporter for volumes might be disadvantageous for the large exporter.

- query on the possibility of exporters grouping together in order to get better rates

since shipping lines only favor large companies as they have the volume. o Mr. Tan explained that for as long as there is enough volume to negotiate, its

possible, but for small exporters to hooking-up with a large exporter for volumes, the rate might increase for the large exporter’s side.

- query as to how come there’s not much of a best practice from Northern Mindanao

and only issues, is it really that bad? o the project team has not yet fully completed the draft, therefore expect for

more to come. - several queries on the problems of domestic shipping including the mention of the

Cabotage Law. o Mr. Tan again, thoroughly discussed the domestic shipping industry and why

the costs are high - comment as to why some exporters only pay php1,000 for bribes while others pay

more. o the project team, again has yet to fully complete the draft, therefore expect for

more to come. Discussions on Recommendations On road projects

– possibility of prioritizing key road sections indicted in the presentation as these the most critical and accident prone

– Some level of compromise should be made since there is the need to also preserve the life of the roads to as much as 25 years (since these were financed with ODA long term loans)


On weigh bridges - for DPWH & PPA to agree on weight capacities as they conflict, encouraging

corruption - DPWH weigh bridges to be positioned in areas where trucks be weighed before they

use the road and not after when the damage has been done once overweight - Northern Mindanao very strict with outbound cargo but in-bound/imported cargo are

not weighed upon arrival at the port, and North harbor nor Cebu port do not have weigh bridges.

Prepared and submitted by:

Michael Joseph R. Ignacio Executive Director, PhilExport-10A


ANNEX 1.2 Draft Study Presentation with Local Partners

April 6, 2010 Brewberry Café, Cagayan de Oro City


ANNEX 3.1 SHIPPER’S SURVEY QUESTIONNAIRE 1. Company Address _____________________________________________________ 2. Industry Sector � Agri/Aquaculture � Processed Food � Wood/Furniture � Industrial � Other, pls. specify: ______________________________________________________ 3. Type of Business � Production � Trading � Manufacturing/Processing � Services � Other (pls. specify): ____________________________________________________ 4. Business Size (total assets less land)

� Micro (up to Php3M)

� Small (Php3M-15M)

� Med. (Php15M-100M)

� Large (Php100M up)

5. Your Position in the company: ___________________________________________ 6. Please provide your recent year’s (2009) transportation logistics costs incurred. Average pre Month Php ____________ Total for 2009 Php_______________ 7. Approximately what percentage of your company's outbound transportation logistics costs is

associated with trucking logistics?

� Less than 10% � 51% - 75% � 10% - 25% � More than 75% � 26% - 50%

8. Approximately what percentage of your company's outbound transportation logistics costs is associated with Sea Freight logistics?

� Less than 10% � 51% - 75% � 10% - 25% � More than 75% � 26% - 50%

9. Do you outsource any of your company's trucking logistics functions? Yes ___ No ___ 10. Do you use only one trucking company? Yes___ No___ 11. Do you regularly canvass for the cheapest trucking rates? Yes___ No___

12. How many trucking service providers does your company patronize? ______________ 13. Evaluate the quality of infrastructure in use for your logistics operations (pls. check): Very high High Average Low Very low Ports Roads and Highway Warehouse Telecom infrastructure & services 14. Overall, logistics costs are (please indicate per product; include additional sheet if necessary): Cost Item (Pls. specify product

here:

Ranking of

Cost*

Cost Per TEU

(Php)

Remarks

Port charges are Trucking rates are Arrastre rates are Stuffing/Stripping rates are


Cost Item (Pls. specify product here:

Ranking of

Cost*

Cost Per TEU

(Php)

Remarks

Customs Facilitation rates are Customs brokerage rates are Warehousing/Reefer Plug rates are Port dues (wharfage etc) rates

are

Informal Cost (bribes) are Freight (shipping) rates are

(Destination)

Others, please specify

* 1: Very Low; 2: Low; 3: Average; 4: High; 5: Very High 15. Evaluate the effectiveness and efficiency of the following processes in your international Nearl

y Alway

s Often Some-

times

Rarely Hardly Ever

Are export shipments cleared and shipped as scheduled?

Are import shipments cleared and delivered as scheduled?

Is Customs clearance a transparent process?

Do you receive adequate and timely information when regulations change?

Can Customs declarations be submitted & processed electronically?

Do shippers demonstrating high levels of compliance receive expedited Customs clearance?

16. Evaluate the incidence on your activity of the following constraints in your logistics operation: Nearl

y Always Often Some

-times

Rarely Hardly Eve

r

Delays due to pre-shipment inspection Criminal activities (e.g. stolen cargo) Solicitation of informal payments

17. Evaluate the evolution of the following factors in your country of work, over the past 3 years: Much

Worse

Worse About the

Same

Better Much Better

Customs clearance procedures clearance procedures Quality of transport infrastructure Quality of telecommunications infrastructure Availability of private sector services Regulatory regime Good governance and eradication of


Much Worse

Worse About the

Same

Better Much Better

corruption Overall business environment 18. Would you say that your exported products are still competitive? Yes___ No ___ Why? ______________________________________________________________________ ___________________________________________________________________________ 19. Would you say that your products sold in Cebu or Manila are still competitive? Yes___ No ___ Why?______________________________________________________________________ ___________________________________________________________________________ 20. If the average transportation rate you pay increased by 10% percent, would your annual volumes

decrease? Yes ___ No ___ 21. What do you consider to be the most important issues facing shippers today?

a. __________________________________________________________________ b. __________________________________________________________________ c. __________________________________________________________________

22. How did you address these issues? a. __________________________________________________________________ b. __________________________________________________________________ c. __________________________________________________________________

23. Would you say that your export products are still competitive in foreign markets? Yes__ No___ Why?______________________________________________________________________ ___________________________________________________________________________ 24. How far is your plant/factory from the nearest port facility? ____Kilometers. 25. There are only 3 foreign shipping lines servicing Northern Mindanao, is domestic transshipment a

good option for you? Yes ___ No ___ Why? ______________________________________________________________________ 26. Do you use only one shipping line exclusively? Yes ___ No ___ 27. If not, do you canvass for the lowest freight rates? Yes ___ No ___ 28. Is there a difference for you whether your cargoes are shipped via a RORO vessel or via

conventional container carrier? Yes___ No___ Why?_____________________________________________________________________ 29. For Cagayan de Oro to Manila shipment, would more than 72 hours shipping time still be

acceptable for your shipment? Yes ___ No ___ If no, why? ________________________________________________________________ 30. If a shipping line offer lower rates but will take more than 72 hours to get your cargo to Manila,

would that offer be an attractive option for your cargoes? Yes ___ No ___ Why? _____________________________________________________________________ 31. How much is your current freight cost for your export cargo? (Indicate product: ____________________)

40 footer dry - Php___________ 20 footer dry - Php____________ 40 footer reefer - Php_________ 20 footer reefer - Php__________

Others, please specify packing type & cost_____________________________ 32. How much is your total cost to export last year? (Indicate Product_______________________________)



Others, please specify packing type & cost_____________________________ 33. How much is your current freight cost for your domestic cargoes (e.g. Manila)? (Pls. indicate commodity __________________)


Others, please specify packing type & cost_____________________________ 34. How does the Value Added Tax (VAT) on freight affect your business? ___________________________________________________________________________ ___________________________________________________________________________ 35. If VAT is to be removed from shipping freight (only), would that help your business be competitive? Why?______________________________________________________________________ ___________________________________________________________________________ 36. Geographically, where are the majority of your customers located? (encircle one.)

1. Locally (< 200 kilometers)

2. Regionally (< 750 kilometers)

3. Nationally

4. Globally 37. How are your export goods transported? FOB___ CIF___ Others (specify) ___________________________________________________________________ 38. Who nominates the carrier? Buyer ____ Spot Market ____ Others (specify) ___________________________________________________________________ 39. Employment Profile of the Company/Business

Tasks assigned in this level? 1: Supervision; 2: Operations; 3:Clerical

Men Women

Level/Division/Function

Present number of workers

How many are women

workers?

1 2 3 1 2 3 Management Operations Marketing Finance/Admin. Others (specify)

39.1. Has the ratio of women to men workers always been the same? Yes___ No___ 39.2. IF NO: When did the company or business begin hiring more women? (Year)_________ 39.3. What made it decide to employ more women? _________________________________________________________________________


ANNEX 3.2 IMPORTER’S & FORWARDER’S SURVEY QUESTIONNAIRE 1. Company Address: ______________________________________________________________ 2. Industry Sector

� Agri/Aquaculture � Processed Food � Wood/Furniture � Industrial � Other, pls. specify: ______________________________________________________

3. Type of Business

� Production � Trading � Manufacturing/Processing � Services � Other (pls. specify): ____________________________________________________

4. Business Size (total assets less land)

� Micro (up to Php3M)

� Small (Php3M-15M)

� Med. (Php15M-100M)

� Large (Php100M up)

5. Please tick one

Phil. Business importing goods from outside the country for processing Phil. Business importing goods from outside the country for sale Freight Forwarding/Logistics Shipping/Shipping Services Customs Broker/Customs Agent Other (please specify):

6. Does your company use your imported commodities as materials for export? Yes __ No __

If so, do you claim duties drawback? Yes ___ No ___ 7. What are the problems encountered with drawback procedures? Please enumerate if any.

___________________________________________________________________________ ___________________________________________________________________________

8. Please list the top 2 most difficult procedures by the following agencies and rank the same Ranking 1: not a problem 5: very serious problem

Agency Import Procedure Rank 1. 1 2 3 4 5

Bureau of Customs 2. 1 2 3 4 5 1. 1 2 3 4 5

Port Authority 2. 1 2 3 4 5 1. 1 2 3 4 5 Arrastre Service

Provider 2. 1 2 3 4 5 1. 1 2 3 4 5 Bureau of Plant

Industry 2. 1 2 3 4 5 1. 1 2 3 4 5

Bureau of Quarantine 2. 1 2 3 4 5 1. 1 2 3 4 5

DENR 2. 1 2 3 4 5 1. 1 2 3 4 5

BIR 2. 1 2 3 4 5 1. 1 2 3 4 5 Others (pls. specify) 2. 1 2 3 4 5 1. 1 2 3 4 5 2. 1 2 3 4 5


9. Other than CDO Port and MCT, does your company use other ports to import? Yes __ No __ If yes, please rank the ports per cost, 1: cheap 2: reasonable 3: expensive, 4: very expensive, pls. encircle

CDO Port: 1 2 3 4 MCT: 1 2 3 4 Other Ports: please name the port(s) below

1. 1 2 3 4 2. 1 2 3 4 3. 1 2 3 4 4. 1 2 3 4

10. Does your company use the VASP (spell out) to submit information electronically to customs

systems? Yes ___ No ___ If yes, what are the advantages enjoyed with the system? ____________________________________________________________________ ____________________________________________________________________

11. Would it be possible for you to clear goods through the port within 24 hours of the ship's arrival? Yes ___ No ___

If yes, please specify your expediting practice(s) and any additional cost(s) incurred:

Practice(s) Cost (Php)

12. Are you able to predict the time it takes to clear goods through the port? Yes ___ No ___

13. In the majority cases, do you aim to move the goods out of the port as early as possible without

maximizing the free storage options that ports offer?

� Yes, we try and get the goods out of the port as quickly as possible � No 14. Within the last 12 months, how many days was the longest you ever had to wait for a particular

consignment to complete the regulatory process in the port? _____ days 15. Which was the main agency responsible for the delay?

� Bureau of Customs � Arrastre Service Provider � Bureau of Quarantine

� Port Authority � Bureau of Plant Industry � DENR

� BIR � Others (please specify)

___________________________ 16. Does someone in your company participate in consultations on regulatory matters (e.g. through

port user groups, Customs consultations, Trade Associations or direct response to formal government consultations) Yes ___ No ___

17. Does your company encourage formal training related to import procedures? Yes ___ No ___ 18. In importing, aside from the cost of the commodity imported, which cost component has the

biggest contribution to your total import cost? Please rank with 1 being the highest Activity Rank Est. cost per entry (Php)

Commodity: __________________________________________________________ (please fill up additional sheets provided if more than one commodity) Freight Arrastre Wharfage Dues Port Storage Charges Trucking Customs Duties Value Added Tax Brokerage Facilitation Cost Bribes


19. Is there any other information relating to trade procedures that have effected your inward supply chain operations, which you would like to share? Please outline:

______________________________________________________________________ ______________________________________________________________________

20. Your Position in the company: _____________________________________________________ 21. Employment Profile of the Company/Business


Men Women

Level/Division/ Function


How many are women

workers?

1 2 3 1 2 3 Management Operations Marketing Finance/Admin. Others (specify) 21.1. Has the ratio of women to men workers always been the same? Yes___ No___ 21.2. IF NO: When did the company or business begin hiring more women? (Year)_________ 21.3. What made your company decide to employ more women? _____________________________


ANNEX 3.3. TRUCKER’S SURVEY QUESTIONNAIRE 1. Company Address: ______________________________________________________________ 2. Business Size (total assets less land) � Micro (up to Php3M) � Small (Php3M-15M) � Med. (Php15M-100M) � Large (Php100M up)

3. Type of Registration � For Hire � Nor for Hire � Mixed 4. What exactly is hauled? � General Cargo/Break-bulk � Containerized Commodities:

_____________________________________________________________________ 5. What kind of trucks do you use? (pls. indicate number of units) Prime Mover ______ 10-Wheeler _____ Wing Van ______ 6-Wheeler________

Other (Pls. specify) ___________________________________________________ 6. Are your trucks? � Brand New � Surplus YES NO 7. How far is the average distance do you provide trucking service? ____________________ 8. Any backloads? � � 9. What is the percentage of your backload? ______% 10. Your prevailing trucking rate per kilometer? Gen. Cargo/Break-bulk

Php ____________ Containerized Php ____________

11. What’s the percentage increase of your trucking rate for the last 5 years? _________________________ 12. Do you have any fuel efficiency programs? � � 13. Your trucking operation’s major costs. Please rank according to cost contribution, No. 1 being the highest.

Items Rank Percent to Operations

a. Business permits & Vehicle registration

b. Driver and helper’s Salary

c. Financing cost

d. Franchise fee and regulatory permits

e. Fuel

f. Garage

g. Insurance and inland marine

h. Oil and lubricants

i. Repairs and Maintenance

j. Tires

k. Weigh bridge

Informal costs

l. Road Bribe

m. Port Bribe

Yes No 14. What is your average waiting time for loading? ________________________________________ 15. What is your average waiting time for unloading? ______________________________________ 16. For containerized hauling, what is the common practice? Van Out ____________ Stuffing @ Shipping Co. CY/Port CY___ 17. Are you paid for empty van positioning/repositioning? � � 18. Will it be beneficial if shipping lines establish an Inland Container Yard in

Valencia, Bukidnon? � �

If yes, please explain why:_______________________________________________________ 19. Are you paid in cash for your trucking services? � � 20. Do you give discounts for cash transaction? � �


If yes, how much?______%? 21. For regular clients, do you allow credit? � � 22. Are you paid demurrage? � � If yes, how much _________ % of trucking rate per day? 23. Are you paid for empty container returns? � � 24. How would you consider prevailing trucking rates? Expensive____ Fair____ Cheap____ Why? Please explain ____________________________________________________________ 25. Do you assign dedicated trucks to regular customers? � �

26. Please mark a check (√) which province in Northern Mindanao has the best road conditions while

mark an (x) for the worst road conditions ( ) Misamis Oriental ( ) Misamis Occidental

( ) Lanao del Norte ( ) Bukidnon

( ) Camiguin

Please explain: ____________________________________________________________________ _________________________________________________________________________________ 27. Your top 5 road sections most difficult to traverse:

Road Section Why difficult? a. b. c. d. e. 28. What are your recommended solutions to improve road conditions in these areas? - Expensive solution:________________________________________________ - Low cost solution:_________________________________________________ 29. Your top 5 most accident prone areas.

a. ________________________________________________________________________ b. ________________________________________________________________________ c. ________________________________________________________________________ d. ________________________________________________________________________ e. ________________________________________________________________________

30. What are your recommended solutions to improve road conditions in these areas? - Expensive solution:________________________________________________ - Low cost solution:_________________________________________________ 31. Have your trucks ever had accidents? Yes ____ No____ Where?_________________ Cause(s) of Accident_________________________ Fatalities: Yes____ No____ Cause(s) of Accident_________________________ Fatalities: Yes____ No____ Cause(s) of Accident_________________________ Fatalities: Yes____ No____ Cause(s) of Accident_________________________ Fatalities: Yes____ No____ Cause(s) of Accident_________________________ Fatalities: Yes____ No____ 32. What is the state of highway traffic along your routes? Please check

Destination

Origin CDO MCT

Free Flowing

Light Traffic

Heavy Traffic

Bukidnon (via Sayre Highway) � � � � � Talakag, Bukidnon � � � � � Lanao, Iligan, West Misamis Oriental � � � � � Eastern Misamis Oriental � � � � �


33. What is the state of city traffic along your routes? Origin Destination Free Flowing Light Traffic Heavy Traffic

Puerto CDO Port � � � Puerto MCT � � � Bulua CDO Port � � � Bulua MCT � � � 34. If traffic and road conditions are improved, which road would you want to use in delivery/ withdrawal of

cargoes from CDO port? Please rank 1 to 5 in terms of strategic importance, number 1 being the highest. Road Rank Road Rank

Agora Road (Valenzuela Street) Corrales Extension Sergio Osmeña Extension Kauswagan - Puntod Bridge* Julio Pacana (Licoan) Gaabucayan Road

*: on the assumption that the CDO 3rd

Bridge (Kauswagan-Puntod) is operational 35. Do any of the following conditions present problems for freight shipments to or from your company

and/or facility? Rate from 1 to 5 (pls. encircle)

1: not a problem 5: very serious problem Please describe the location

Highway Congestion Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag, Bukidnon 1 2 3 4 5 Lanao, Iligan, West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Highway interferences w/ school crossings, public markets, commercial centers

Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag, Bukidnon 1 2 3 4 5 Lanao, Iligan, West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Turning at traffic lights 1 2 3 4 5 Inadequate local streets capacity 1 2 3 4 5 Roadway turning radius 1 2 3 4 5 Insufficient lane width for wide loads 1 2 3 4 5 Insufficient bridge/overpass clearances (height)

1 2 3 4 5

Truck ban restrictions on movement of large and heavy trucks

1 2 3 4 5

Poor truck access to shipping terminals 1 2 3 4 5 Poor reliability due to accidents & incidents Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag, Bukidnon 1 2 3 4 5 Lanao, Iligan, West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Unsafe roadway geometrics Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag, Bukidnon 1 2 3 4 5 Lanao, Iligan, West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Poor reliability due to weather conditions 1 2 3 4 5 Poor Signage(s) 1 2 3 4 5 Other (specify) 1 2 3 4 5 1 2 3 4 5


36. What is your title at your company? _______________________________________________ 37. How long (in months) have you been in this position? _________________________________ 38. Geographically, where are the majority of your customers located? (please check)

� CDO � Bukidnon � Iligan � MisOr � Mla/Ceb 39. Do you own all your trailers? � Yes � No If no, how may are rented? ________

40. Do you operate your own garage? � Yes � No 41. Plans of expanding you’re trucking operations? � Yes � No 42. In the next 3 years,

business will be: � Less

profitable � More profitable � No change in

profitability 43. Your top 5 current problems in the port you encountered lately:

CDO Port Mindanao Container Terminal a. a. b. b. c. c. d. d. e. e. 44. Are illegal road/highways bribe (kotong) a major problem for our trucking operations?______ 45. What current government policies and regulations (if any) adversely affect your operations?

a. ________________________________________________________________________ b. ________________________________________________________________________ c. ________________________________________________________________________

46. Your Position in the company: _____________________________________________________ 47. Employment Profile of the Company/Business


Men Women



How many are women

workers?


47.1. Has the ratio of women to men workers always been the same? Yes___ No___ 47.2. IF NO: When did the company or business begin hiring more women? (Year)_________ 47.3. What made your company decide to employ more women? _____________________________


ANNEX 3.4 SHIPPING LINE’S SURVEY QUESTIONNAIRE

1. Company Address ( in CDO): ________________________________________ 2. Service (pls. check ): ( ) Domestic Liner ( ) Foreign Liner

3. How many ships do you have calling at: MCT ___ CDO Port ___

4. Vessel Information: Call Frequency

Direct Service Vessel Type

1 Route Origin-Destination (via)

Weekly Monthly Ave. Port Time

Yes No

Ave. Load

Factor (%)

1 2 3 4 5

1Please indicate: 1: Conventional Containerized; 2: RORO; 3: Conventional; 4: Bulker; 5: Others

5. Vessel Capacity Ship Gear

Vessel TEU Reefer Plugs Type No. of Units

1 2 3 4 5

6. Please Provide the Cargo Tariff/Lease Rates. Type of Service

1 Tariff Table or Lease Rate (Php) Vessel

10-FD 20-FD 40-FD 20-FR 40-FR Published Discounted 1 2 3 4 5

1: 10 footer (FCL Dry); 20 footer (FCL Dry); 40 footer (FCL Dry); 20 footer (Reefer); 40 footer (Reefer)

7. Are any of the following conditions present for freight shipments?

Please check for ranking conditions 1: not a problem; 2: slight problem; 3: manageable problem;

4: really a problem; 5: very serious problem Conditions 1 2 3 4 5

Port Berth Congestion Cargo handling productivity Timeliness of vessel departure Port equipment availability Port and berthing facilities Reefer plug availability Truck and trailer availability Container retention by shippers Timeliness of cargo delivery by shippers Timeliness of cargo withdrawal Overweight containers


Please check for ranking conditions 1: not a problem; 2: slight problem; 3: manageable problem;

4: really a problem; 5: very serious problem Truck ban restrictions on movement of large and heavy trucks

Poor truck access to shipping terminals Cargo truck queuing area Other (specify)

8. Please provide information on costs in the table below? Please Check for Ranking of Costs

1:very low; 2:low; 3: average; 4: high; 5:very high Cost Item 1 2 3 4 5

Cost (Php)

Remarks

Port charges are

Arrastre charges are

Stevedoring charges are

Quay crane charges are

Wharfage rates are

Port Storage

Port dues (dockage) rates are

Pilotage rates are

Tug service rates are

Trucking rates are

Stuffing/Stripping rates are

Reefer Plug rates are

Weighbridge rates are

Informal Cost (bribes) are

Others (Pls. specify)

9. Have your vessels experienced delays in berthing? Yes___ No___ Vessel type: _____________________________________________________________

Why?__________________________________________________________________

10. Your vessels are currently charged berthing dues based on GRT per day; do you find this system appropriate? Yes___ No___

11. Would you find it appropriate for the port authority to charge berthing dues based on actual space

occupied rather than by GRT basis? Yes___ No___

12. If your vessel arrived at 10PM and departs at 6AM the following day, are you charged an equivalent of two days port dues? Yes___ No___

13. Does your company deem it necessary to operate your own container yard? Yes___ No___

Why?__________________________________________________________________

14. Your position in the Company: ____________________________________________________


15. Employment Profile of the Company/Business Tasks assigned in this level?

1: Supervision; 2: Operations; 3:Clerical Men Women



How many are women

workers?


16. Has the ratio of women to men workers always been the same? Yes___ No___

17. IF NO: When did the company or business begin hiring more women? (Year)_____________

18. What made it decide to employ more women? ____________________________________________________________________________


ANNEX 4.1 MAERSK LINES THC TABLE


ANNEX 4.2 LTO FINES AND PENALTIES

FINES/PENALTIES FOR TRAFFIC AND ADMINISTRATIVE VIOLATIONS: APPROVED RATES Violations In Connection With Licenses 1. Driving without License 1,500.00 2. Driving without delinquent of expired license 400.00 3. Driving with suspended or revoked or improper license 1,000.00 4. Failure to carry Driver’s License 200.00 5. Failure to sign Driver’s License 200.00 6. Driving under the influence of liquor. 5,000.00 - and two (2) months suspension of driver’s license 5,000.00 - for the 2nd offense and three (3) months suspension 6,000.00 of driver’s license - for subsequent violations after the 2nd offense 7,000.00 and six months suspension of driver’s license; after 3rd offense automatic revocation of driver’s license 7. Driving under the influence of drugs 10,000.00 8. Allowing an unlicensed/improperly licensed person to drive motor vehicle. 1,000.00 - suspension of plates, registrations and Driver’s License for 2 months 9. Possession and use of fake/spurious Driver’s License 2,000.00 - if the drivers has been issued an authentic license, it shall be suspended for 1 year in addition to the fine - if the driver has not been issued an authentic license, he shall be disqualified, to secure a Driver’s License for a period of two (2) years. 10. Conviction of the driver of a crime using a motor vehicle 3,000.00 11. Student driver operating a MV without being accompanied by a Licensed driver 500.00 12. Unlicensed conductor of a motor vehicle for hire 500.00 13. Operating/driving a motor vehicle which is unregistered/ improperly Registered - if committed by the driver without the knowledge and 2,000.00 Consent of the owner/operator - if the driver is also the processor of the subject motor vehicle 4,000.00 - in both cases the motor vehicle shall be impounded or the plates if any shall be confiscated and shall not be released until properly registered. 14. Operating a motor vehicle with unregistered substitute or 5,000.00 replacement engine, engine block or chassis - the subject MV shall be impounded until such parts are properly registered 15. Failure to carry certificate of registration or official receipt of registration 150.00 16. Operating /allowing the operation of MV with a suspended / 1,000.00 revoked Certificate/Official Receipt of registration. - the subject MV shall be impounded and its plate held during the suspension - in addition to the original suspension the said MV and plates shall further be suspended for two (2) years. 17. Tourist operating or allowing the use of non Philippine registered 5,000.00 Motor Vehicle beyond the 90 day period of his sojourn in the country.

- the MV shall not be allowed to operate by the confiscation of its plates, OR & CR until properly registered.

- in addition, if the driver is a holder of local driver’s license, the same shall be suspended for one (1) month.

Violations in Connection with Number of Plates 18. Motor Vehicle number plates not firmly attached 200.00 19. Obscure plates 200.00 20. License plates different from body number on Public Utility MV 500.00 21. Improper display of a motor vehicle permanent plate 500.00 22. Display/Use of an expired commemorative plates or stickers 2,000.00 23. tampered/ marked plates or stickers 2, 000.00 24. Illegal transfer or use of MV regularly issued MV plates, tags or 10,000.00 stickers except security plates on authorized Motor Vehicle - Owners/Operators are conclusively presumed to have


Committed the illegal transfer. - Drivers of MV involved in illegal transfer of plates, sticker shall suffer the suspension of their Driver’s License for three (3) months - if the MV with illegal transferred plates or stickers in used In the commissions of a crime, its owner shall suffer the penalty of 12,000.00 fine and suspension of plates and registration certificate and Official Receipt for two (2) years Violations Relative to Equipments, Parts, Accessories, Devices and Markings of Motor Vehicle 25. Operating MV with metallic tires in any public high ways 5,000.00 26. Defective Brake 500.00 27. Improper/Defective Horn or signaling device 300.00 28. Use or installation of unnecessary lights in front and rear of a 300.00 Motor Vehicle 29. Operating motor vehicle without head, tail, plate and/or brake lights 300.00 30. Without muffler (should insert windshield) 150.00 31. Without wiper 150.00 32. Dirty or unsightly or unsanitary MV 300.00 33. Dilapidated or defective MV 1,000.00 - to hold release of plates until defect is correct 34. Failure to paint or improper painting of authorize route or PUJ 500.00 Filcabs, Shuttle Services, Trucks For Hire, Taxis and similar for For Hire Motor Vehicles operating with fixed routes. - to hold plates until defect is corrected 35. Non painting of business or trade name 500.00 - to hold plates until defect is corrected 36. Use of unauthorized improvised plates 300.00 37. Without or defective hand brakes 200.00 - to hold plates pending correction of defect 38. Without or defective speedometer 200.00 - to hold plates pending correction of defect 39. Without or defective windshield wiper 200.00 - to hold plates pending correction of defect 40. Without rear view mirror 200.00 - to hold plates pending correction of defect 41. Without interior light 200.00 - to hold plates pending correction of defect 42. Without name or business name and address of operator inscribe 500.00 - to hold Plate or OR/CR until defect is corrected 43. Unauthorized use of bell, siren or exhaust whistle 15,000.00 - forefieture of the said gadgets in favor of the government 44. Without functional spare tire 300.00 45. Without red flag or red lights on projecting end of load extending 500.00 more than a meter beyond the bed or body, and in the evening red lights visible at least 50 meters away. 46. Failure to paint plate number on a motor vehicle for hire 500.00 - to be imposed upon the owner/driver 47. Failure to carry Early Warning Device (EWD) 150.00 48. Failure to install EWD 4 meters from the front rear and of 500.00 the stalled motor vehicle - to be imposed upon the owner/driver 49. Without Capacity marking 375.00 - to be imposed upon the owner/driver


50. Unauthorized installation of jalosies, painted windshield or 600.00 colored windshield. - to be imposed upon the owner/driver 51. Installation of dim/colored lights, strobe lights, dancing lights 600.00 or similar lights - to be imposed upon the owner/driver of the motor vehicles 52. Use or installation of heavily tinted colored/painted windshield or 600.00 or window glass - to be imposed upon the owner/driver sunvizor or light tinted are allowed 53. Without permanent tail gate with inscription “Not for Hire” 500.00 sign in a private jeepney/jitney - to be imposed upon the owner 54. Use/installation of a glaring/stainless object upon at the front 500.00 and/or rear of a motor vehicle - to be imposed upon the owner Weights and Load Limits 55. Load extending beyond the projected width without permit 500.00 - to be imposed upon the driver 56. Axle overloading – an amount equivalent to 25% of MVUC at the 300.00 time of infringement on owner/operator or driver of trucks and trailers for loading beyond their registered gross weight, vehicle weight. The penalty shall be waived for loads exceeding the registered GVW by a tolerance of less than 5%. No motor vehicle shall exceed thirteen thousand five hundred (13,500) kgs. Or the vehicle load exceeds 150% of the maximum allowable gross weight. 57. Operating a passenger truck (bus) with cargo exceeding 160 kgs. 300.00 - to be imposed upon either the driver/operator or conductor 58. Allowing more passengers and/or freight or cargo in excess of carrying 300.00 capacity of MV 59. Baggage or freight carried on top of truck exceeds 20 kgs. Per sq. meter and not distributed in such a manner as not to endanger the passenger or stability of the truck Prohibited or Illegal Operation of Motor Vehicles 60. Out of line 6,000.00 For Operators/Owners: 1st Offense & addt’l P1, 500.00 per day reckoned from the day of apprehension until the case was settled and suspension of registration and/or impoundment of MV for three (3) months 2nd Offense & addt’l P2, 000.00 per day reckoned from the day of apprehension until the case was settled and suspension of registration and/or impoundment of MV for six (6) monts 3rd Offense & addt’l P2, 500.00 per day reckoned from the day of apprehension until the case was settled, revocation of registration and forever banned from applying for a franchise and/or revocation of franchise if franchise holder


For Drivers: 1st Offense 250.00 & suspension of DL for three (3) months 2nd Offense 500.00 & suspension of DL for six (6) months 3rd Offense 750.00 & suspension of DL for one (1) year 61. Colorum operation For Operators/Owner: 1st Offense 6,000.00 & addt’l P1, 500.00 per day reckoned from The day of apprehension until the case was Settled and suspension of registration and/or Impoundment of MV for three (3) months 2nd Offense 6,000.00 & addt’l P2, 000.00 per day reckoned from The day of apprehension until the case was Settled and suspension of registration and/or Impoundment of MV for six (6) months 3rd Offense 6,000.00 & addt’l P2, 500.00 per day reckoned from The day of apprehension until the case was Settled, revocation of registration and forever Banned from applying for a franchise and/or Revocation of franchise if franchise holder For Drivers: 1st Offense 250.00 & suspension of DL for three (3) months 2nd Offense 500.00 & suspension of DL for six (6) months 3rd Offense 750.00 & suspension of DL for (1)year 62. Operating a motor vehicle with expired franchise (CPC) Driver 500.00 Operator/owner/possessor of MV per day from the date 1,000.00 of expiry to the date of the CPC - the plate, OR/CR of the subject MV shall be suspended For six months from the date of apprehension to the fines 63. Operating or using a For Hire Motor Vehicle for driver 1,000.00 different from its types of services mentioned in the CPC for operator 3,000.00 - For Hire Motor Vehicles used by the members of the family of the operator, during emergency cases is allowed. 2nd offense and suspension plates, OR, CR for for driver 2,000.00 six (6) months for operator 4,000.00


for subsequent offenses and suspension of DL, for driver 3,000.00 plate, OR/CR for one (1) year for operator 5,000.00 Breach of Condition of Franchise and Related Violations 64. Employing insolent, discourteous drivers and conductors 400.00 - to be imposed against the owner/operator/possessor of MV 65. Discourtesy of drivers and/or conductors towards the passengers 500.00 in addition to the suspension of conductor’s/driver’s license for (2) two months 66. Unreasonable refusal to convey passengers 1,500.00 - to be imposed against the driver and/or the operator in addition To the suspension of the license of the driver of the license of the driver for two (2) months. If the operator has knowledge or consent to the infraction committed, the place, OR & CR shall likewise be suspended for two (2) months. 67. Non – issuance of fare ticket for operator 375.00 - to be imposed against the operator and the conductor for conductor 1,000.00 68. Unauthorized use of commercial or trade name 500.00 - to be imposed against the operator 69. Undue preference or unjust/unreasonable discrimination 600.00 against the passenger - to be imposed against the driver aside from the penalty, The license of the driver shall be suspended for two (2) months. 70. Overcharging/Undercharging of fare 750.00 - for the driver or the conductor as the case maybe and suspension of conductors license for two (2) months - the operator shall also be liable for equal fine if found to have Participated thereto and the plate, OR/CR for the same period Stated above. - for each subsequent violation the license of the driver or conductor and/or the plate, OR/CR of the subject MV shall be suspended for three (3) months. 71. Breach of Condition in the CPC except when already penalized under 500.00 any provisions of this circular. Frauds and Falsities 72. Use of fake plates/stickers/pursuant documents 2,000.00 to 4,000.00 - to be imposed upon the owner and/or driver of the subject MV. 73. Misrepresenting a copy of a document pertinent to a motor vehicle 1, 500.00 Before the Traffic Adjudication Service. - to be imposed upon the driver or owner Traffic Violations 74. Parking 200.00 a. within an intersection b. within 5 meters of the intersection c. 4 meter from the driveway entrance d. within 4 meters from afire hydrant e. in front of a private driveway f. on the roadway side of any unmoving or parked MV at the curved way of the highway


g. at any place where signs of prohibitions have been installed. 75. Reckless Driving 1st Offense 1, 000.00 2nd Offense 1, 500.00 - and suspension of DL for two (2) months 3rd Offense 2, 000.00 - and suspension of DL for six (6) months Succeeding offense 5, 000.00 - and revocation of DL Such as but not limited to the following: a. Disregarding Traffic Signs (Should be “failure to observe traffic signs and signals”) b. Allowing a passenger to top or cover of a motor vehicle except in a truck helper c. Failure to provide canvass cover to cargos or freight of trucks requiring the same d. Permitting passenger to ride on running board, stepboard or mudguard of MV while the same is in motion e. Failure to dim headlights when approaching another motor vehicle f. Driving For Hire motor vehicle in slippers g. Driving in a place not intended for traffic or into place not allowed for parking h. Hitching or permitting a person or a bicycle, motorcycle, tricycle or skate roller to hitch to a motor vehicle i. Driving against traffic – failure to pass to the right when meeting persons or vehicles coming towards him j. Illegal turn – failure to conduct the motor vehicle to the right of the intersection of the highway when turning to the left in going from one highway to another k. Illegal overtaking – failure to pass to the left when overtaking persons or vehicles going the same direction except when there are two or more lanes for the movement of traffic in one direction l. Overtaking at an unsafe distance – failure to pass at a safe distance to the left of another motor vehicle when overtaking that vehicle. m. Cutting an overtaken vehicle – driving to the right side of the highway after overtaking before his motor vehicle is safely clear of such overtaken vehicles. n. Failure to give way to an overtaking vehicle – failure to give way to another vehicle approaching from the rear that wishes to overtake his vehicle when the former has given suitable and audible signal o. Increasing speed when being overtaken – increasing the speed of the motor vehicle before the overtaking vehicle has completely passed. p. Overtaking when left side is not visible or clear of oncoming traffic - driving to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the same direction where the left side is not clearly visible and is not free of oncoming traffic for a sufficient distance to pass in safely. q. Overtaking upon a crest of a grade – overtaking or passing another vehicle proceeding in the same direction when approaching the crest of a grade r. Overtaking upon a curve – overtaking or passing another vehicle proceeding in the same direction upon a curve in a highway where the driver’s view along the highway is obstructed within a distance of 500 feet ahead. s. Overtaking at any railway grade crossing – overtaking or passing another vehicle proceeding in the same direction at any railway grade crossing. t. Overtaking at an intersection – overtaking or passing another vehicle proceeding in the same direction at any intersection of highways except on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake another vehicle on the right. u. Overtaking between “men working” or “caution” signs – overtaking or passing or attempting to overtake or pass another vehicle proceeding in the same direction between warning or caution signs indicating that men are working on the highway. v. Overtaking at no overtaking zone – overtaking or passing or attempting to overtake or pass another vehicle proceeding in the same direction in any “no passing or overtaking” zone. w. Failure to yield the right of way – failure of the vehicle on the left to yield the right intersection at approximately the same time. x. Failure to yield the right of way – failure of a vehicle approaching but not having


entered an intersection to yield the right of way to a vehicle within such intersection or turning therein to the left across the line of travel of the first mentioned vehicle when such vehicle has given a plainly visible signal of intention to turn. y. Failure to yield the right of way – failure of the driver of any upon a highway within a business or residential district to yield the right of to a pedestrian crossing such highway within a crosswalk except at intersection where the movement of traffic is regulated by a peace officer or by traffic signal. z. Failure to stop before traversing a “through highway” or railroad crossing – failure of the driver of a vehicle upon a highway to bring to full stop such vehicle before traversing any “through highway” or railroad crossing. a.a. Failure to yield right of way – failure of a vehicle entering a highway from a private road or drive to yield the right way to all vehicles approaching on such highway. a.b. Failure to yield the right of way to ambulance, police or fire department vehicles – failure of a driver upon a highway to yield the right of way to police or fire department vehicles and ambulances when such vehicles are operated on official business and the drivers thereof sound audible signal of their approach. a.c. Failure to yield right of way at a “through highway” or a “stop intersection” – failure of a vehicle entering a “through highway” or a “stop intersection” to yield the right of way to all vehicles approaching in either direction on such “through intersection”. a.d. Failure to give proper signal – Failure to give the appropriate signal before starting, stopping or turning into a direct line. a.e. Illegal turn – failure of the driver of a vehicle intending to turn to the right at an intersection to approach such intersection in the lane for traffic nearest to be right-hand side of the highway and. In turning, to keep as close as possible to the right hand curve or edge of the highway. a.f. Illegal turn – failure of the driver of a vehicle intending to turn to the left, to approach such intersection in the lane for traffic to the right of and nearest to the center line of the highway, and turning , to pass to the left of the center of the intersection except upon highway laned for traffic and upon one-way highway. a.g. Failure to stop motor and notch handbrake of motor vehicle when unattended – failure to turn off the ignition switch and stop the motor and notch effectively the handbrake when parking a motor vehicle unattended on any highway. a.h. Unsafe towing 76. Obstruction – obstructing the free passage of other vehicles on the 200.00 highway while discharging or taking passengers or loading and unloading freight, or driving a motor vehicle in such a manner as to obstruct or impede the passage of any vehicle Violations involving Taxi Units except those already provided in this circular 77. Fast, Tampered, Defective or non operational, Tampered, broken, fake or altered meter seal. - and suspension of DL for three (3) months 1st Offense 3,000.00 - and suspension of DL for four (4) months 2nd Offense 4,000.00 - and suspension of DL for six (6) months; 3rd Offense 6,000.00 DL will be revoked and franchise will be recommended for cancellation For the said infraction, the operator of the subject MV shall be summoned. Upon determination That he is also liable for the said infraction, the plates, OR/CR of the subject MV shall be suspended for the said duration of the suspension suffered by the driver in addition to the fine equivalent to the amount paid by the driver. 78. Tampered, broken, joint, reconnected, fake or altered sealing wire 1, 500.00 - to be imposed upon the driver or owner whoever maybe responsible. The License of the driver or the plate, OR/CR of the MV shall be suspended for one month for the 1st offense. Two (2) months for the 2nd offense and three (3) months for the 3rd offense - after third violation Dl will be revoked and franchise


Will be recommended for cancellation. 79. Violation of color scheme, adaptation of MV color or design 500.00 without authority - to be impose upon the owner 80. Old meter seal/or loose triplex seal 500.00 - to be impose upon the and/or driver 81. Flagged up meter and/or operating on contractual basis 750.00 - to be impose against the driver. The License of the driver shall be suspended For forty five (45) days 82. No taxi Meter 1, 200.00 - to be imposed against the driver & 1, 200.00 the total amount of - to be imposed against the operator The total amount of 2, 400.00 83. Failure to paint the word “Aircon” 750.00 - to be impose against the operator / Owner only. 84. Unauthorized installation of Aircon 750.00 - to be impose against the operator/owner and driver 85. No Identification Card 150.00 86. No Taximeter light 200.00 87. Failure to provide top light indicating availability 200.00 - to b impose upon the driver and/or owner 88. Failure to print owner/operator’s name, address and/or 500.00 Capacity markings, type of service on taxi units - to be imposed upon the owner/operator or driver Other Non – Traffic Violations 89. Unauthorized installation of aircon on buses 750.00 90. Non painting of the word aircon for buses 750.00 91. Operating aircon MV with defective aircon 500.00 92. Smoke Belching define under RA 8479 - for the 1st offense and to pass the smoke emission test 1, 000.00 - for the 2nd offense and to pass the smoke emission test 3, 000.00 - for 3rd and subsequent offenses and to pass the smoke 5, 000.00 Emission test and to suspend of plates, CR/OR/ Registration of MV for one (1) year 93. Operating a right hand drive motor vehicles 50, 000 .00 94. Failure to Install Seatbelt as defined under RA 8750 1,000.00 95. Failure to wear/unbuckled seatbelt 250.00 96. Allowing child six years old and below on passenger seat 250.00 97. Display of sign board (PUB & PUJ ONLY) without front panel route 500.00 Copyright © 2009 Land Transportation Office LTO Website Comments:


No fines for overspeeding, beating the red light, illegal u-turn, entering a no entry zone, parking on wrong side of road, double parking, lane violations, road marking violations, tailgating, counter flow violations, motorcycle without helmet, tridem on motorcycle, stopping on pedestrian lanes, parking on crosswalks, over width mudguards, no side mirrors, trucks with no running lights, red light on front of vehicle, green light at rear of vehicle, no reflecting lenses, fleeing the scene of an accident (hit and run), hit and run with fatality, hit and run resulting to injury, failure to report an accident involving damage to property, driving under the influence resulting in injuries, driving under the influence resulting in fatalities, failure to pay traffic fines within a specified period, diplomatic exceptions, ambulance and fire trucks, etc.

The foregoing document is riddled with vague description of violations, construction and grammatical errors, double listing, inconsistent fines, etc. Some violations are subjective and may result to different interpretations. Recommendations: Review and re categorize violations into General violations (licensing, plates and tags, DUI, etc.), , Moving

violations, violations and traffic signs, signals, speed limits, etc., PUJ, Bus and Taxi, Commercial vehicles, Heavy Cargo and articulated Vehicles,


GLOSSARY OF TERMS AND ABBREVIATIONS 3PL – Third Party Logistics Advance Against Documents

Load made on the security of the documents covering the shipment. Advising Bank

A bank that receives a letter of credit from an issuing bank, verifies its authenticity, and forwards the original letter of credit to the exporter without obligation to pay

All Risk Insurance - Is a clause included in marine insurance policies to cover loss and damage from external

causes, such as fire, collision, pilferage, etc. but not against innate flaws in the goods, such as decay, germination, nor against faulty packaging, improper packing/ loading or loss of market, nor against war, strikes, riots and civil commotions (See Marine Insurance)

All-Risk Clause - Is an insurance provision that all loss or damage to goods is insured except that of inherent

vice (self caused). (See All Risk Insurance). Alongside - A phrase referring to the side of a ship. Goods to be delivered "alongside" are to be placed on the

dock or barge within reach of the transport ship's tackle so that they can be loaded abroad the ship. Arrastre - Cargo handling, port side Authority (formerly the Bureau of Coast and Geodetic Survey) Authority to Load - shall refer to the approval or permission granted by the BOC or its deputized agencies for

the loading of export goods on board the carrier specified in the covering Export Declaration Authorized Shipyard/Repair Operator - refers to a shipyard operator owner or ship repair facility which has

been given recognition/accreditation/permit and has registered with the Philippine Ports Authority/Maritime Industry Authority.

B/B - Break-Bulk Cargo BFAR – Bureau of Fisheries and Aquatic Resources of the Department of Agriculture Berth Liner Service - Is a regular scheduled steamship line with regular published schedules (port of call ) from

and to defined trade areas

Berth or Liner Terms - Is an expression covering assessment of ocean freight rates generally implying that loading and discharging expenses will be for ship owner's account, and usually apply from the end of ship's tackle in port of loading to the end of ship's tackle in port of discharge.

Bill of Lading - A document that establishes the terms of a contract between a shipper and a transportation

company under which freight is to be moved between specified points for a specified charge. Usually prepared by the shipper on forms issued by the carrier, it serves as a document of title, contract of carriage, and a receipt for goods. Also see Air Waybill and Ocean Bill of Lading.

BIR - Bureau of Internal Revenue BOC - Bureau of Customs Bonded Warehouse - A warehouse storage area or manufacturing facility in which imported goods may be

stored or processed without payment of customs duties. BPI - Bureau of Plant industry Berth - Is the place beside a pier, quay or wharf where a vessel can be loaded or discharged CAD - The acronym meaning "cash against documents," a method of payment for goods in which documents

transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller. Cargo - Is merchandise/commodities/freight carried by means of transportation. Cargo Receipt - Is a receipt of cargo for shipment by a consolidator (used in ocean freight).


Carrier, Common - A public or privately owned firm or corporation that transports the goods of others over land, sea, or through the air, for a stated freight rate. By government regulation, a common carrier is required to carry all goods offered if accommodations are available and the established rate is paid.

Carrier(s) Containers or Shipper(s) Containers - The term Carrier(s) Container(s) or Shipper(s) Container(s)

means containers over which the carrier or the shipper has control either by ownership or by the acquisition thereof under lease or rental from container companies or container suppliers or from similar sources. Carriers are prohibited from purchasing, leasing or renting shipper owned containers.

Cartel - Is an association of several independent national or international business organizations that regulates competition by controlling the prices, the production, or the marketing of a product or an industry.

Cash Against Documents (CAD) - Payment for goods in which a commission house, or other intermediary,

transfers title documents to the buyer upon payment in cash. Cash in Advance (CIA) - Payment for goods in which the price is paid in full before shipment is made. This

method is usually used only for small purchases or when the goods are built to order. CDO - Cagayan de Oro CENRO – Community Environment and Natural Resources Office of the DENR Certificate of Inspection - A document certifying that the goods were in apparent good condition immediately

prior to shipment. Certificate of Manufacture - A statement in which a producer specifies where his goods were manufactured,

certifies that manufacturing has been completed, and confirms that the goods are at the buyer's disposal.

Certificate of Origin - refers to the declaration of the exporter, certified by the BOC that his export complies with the origin

requirement specified under bilateral, regional or multilateral trading arrangements to which the Philippines is a party.

- A statement signed by the exporter, or his agent, and attested to by PhilExport or a local Chamber of Commerce, indicating that the goods being shipped, or a major percentage of them, originated and were produced in the exporter's country.

Certificate of Shipment - shall refer to the document which the BOC or its deputized agencies issues upon

request of the exporter or his duly authorized representative, certifying to the nature of shipment of his export goods (full shipment effected, shut-off or non-shipment)

cbm - Cubic Meter C&F - Cost and Freight CFR/CIF - Terms beginning 'C' are 'Contracts of Dispatch'. They differ from other INCOTERMS as they

segregate the point at which risk and responsibility passes from the point at which costs pass.

Under all other terms, the point of transferring risk and the point at which responsibility for cost is also transferred are simultaneous. With the 'C' terms this is NOT the case.

CFR (Cost and Freight) has a long history and outside of INCOTERMS a definition with consensus is difficult.

As an INCOTERM risk passes from the seller to the buyer when the cargo crosses the ship's rail at the origin port. However, the responsibilities for the costs of transit only pass from the seller to the buyer at the destination port. CFR and CIF are Monomodal expressions used when the main carriage is by sea and both are suited to the use of Bills of Lading. Because the ship's rail is seen as triggering these terms, it is often inappropriate to use either in a modern port and reference should be made to the notes on this subject under FOB. Buyers are disadvantaged with contracts of dispatch. The buyer must take risks for a period of carriage during which the buyer has no means of controlling or limiting those risks. The carrier used; the costs incurred for carriage and the timing of the carriage are all under the seller's control. The buyer must consider this disparity before accepting a C termed contract. From the seller's perspective, the C terms represent exceptional risk-management opportunities and are actively pursued as a consequence.


CIF (Cost, Insurance and Freight) represents the condition of CFR with the addition of Insurance. This is the first of only two terms that place a compulsory responsibility for insurance on the seller. Under all other terms, the buyer considers insurance as an optional responsibility. (Refer CIP)

CFS (Container Freight Station) - The term CFS at loading port means the location designated by carriers for the

receiving of cargo to be packed into containers by the carrier. At discharge ports, the term CFS means the bonded location designated by carriers in the port area for unpacking and delivery of cargo.

CFS Charge (Container Freight Charge) - The term CFS Charge means the charge assessed for services

performed at the loading or discharging port in packing or unpacking of cargo into/from containers at CFS. CFS/CFS (Pier to Pier) - The term CFS/CFS means cargo delivered by break-bulk to Carrier's CFS to be packed

by Carrier into containers and to be unpacked by Carrier from the container at Carrier's destination port CFS.

CFS/CY (Pier to House) - The term CFS/CY means cargo delivered break-bulk to Carrier's CFS to be packed by Carrier into containers and accepted by consignee at Carrier's CY and unpacked by the consignee off Carrier's premises, all at consignee's risk and expense.

CPT/CIP (Carriage Paid To) - Is the multimodal equivalent of CFR. The named place where the seller's costs end

can be a point other than a seaport (as well as being a seaport), in the buyer's country.

CPT may be used for airfreight, roadfreight and railfreight as well as for seafreight when the ship's rail serves no purpose. E.g. if the destination is an inland point or a modern port with conditions as discussed under FOB. CPT requires the use of multimodal documents and documents such as Bills of Lading or Airwaybills may prove inappropriate in recording the passage of risks under this term. Under CPT, risk and responsibility passes when the cargo is handed to the first carrier (with a carrier defined as either an Actual or Contractual carrier i.e. a Freight Forwarder or Multi Transport Operator could act as 'carrier' as could an airline or shipping line). However, responsibility for costs only transfer when the goods arrive at the stated place where carriage is 'paid to'. The diagram represents this condition with a brace, indicating that the place where carriage is paid to may be any point in the country of destination. The cautions expressed for buyers using CFR are equally applicable to CPT with added complications in that the transfer of risks can begin earlier. If the carrier is collecting the cargo from the seller's premises then the risks of carriage pass to the buyer at that point, while the buyer's ability to control the costs and timing of carriage only pass at the destination point. Although these reservations warrant serious consideration for a buyer, they represent great risk-management opportunities for the seller.

CIP (Carriage & Insurance Paid to) represents CPT with the inclusion of Insurance. The cautions and notes made

regarding CPT equally apply to CIP. Charter - Originally meant a flight where a shipper contracted hire of an aircraft from an airline. Has usually come

to mean any non-scheduled commercial service. Charter Party - The contract between the owner of a ship and the individual or company chartering it. Among

other specifications, the contract usually stipulates the exact obligations of the ship-owner (loading the goods, carrying the goods to a certain point, returning to the charterer with other goods, etc.); or it provides for an outright leasing of the vessel to the charterer, who then is responsible for his own loading and delivery. In either case, the charter party sets forth the exact conditions and requirements agreed upon by both sides.

Charter Party Bill of Lading - A bill of lading issued under a charter party. It is not acceptable by banks under

letters of credit unless so authorized in the credit.

Chassis - A wheel assemble including bogies constructed to accept mounting of containers. Class Rates - A class of goods or commodities is a large grouping of various items under one general heading.

All items in the group make up a class. The freight rates that apply to all items in the class are called class rates.

Classification - Is a customs term. The placement of an item under the correct number in the customs tariff for

duty purposes. At times this procedure becomes highly complicated; it is not uncommon for importers to resort to litigation over the correct duty to be assessed by the customs on a given item.


Claused Bill of Lading - Is a bill of lading which has exemptions to the receipt of merchandise in "apparent good order" noted.

Clean Bill of Lading - Is a bill of lading which covers goods received in "apparent good order and condition" and without qualification. Clean Draft - Is a draft to which no documents have been attached.

Commercial Invoice - An itemized list of goods shipped, usually included among an exporter's collection papers. Commercial Risk - Risk carried by the exporter (unless insurance is secured) that the foreign buyer may not be

able to pay for goods delivered on an open account basis. Common Carrier - A firm or individual that transports persons or goods for compensation. Conference - A group of vessel operators joined together for the purpose of establishing freight rates.

RORO/Container Vessel - Ship designed to accommodate containers and roll-on roll-off cargo. It can be self sustaining. RORO/Container/Break-bulk Vessel - Designated to accommodate three types of cargo, usually self sustaining.

Confirmed Letter of Credit - A letter of credit, issued by a foreign bank, with validity confirmed by a U.S. bank.

An exporter who requires a confirmed letter of credit from the buyer is assured of payment by the U.S. bank even if the foreign buyer or the foreign bank defaults.

Confiscation - The taking and holding of private property by a government or an agency acting for a government. Compensation may or may not be given to the owner of the property.

Consignee

- Person or firm to whom goods are shipped under a bill of landing. - The individual or company to whom a seller or sipper sends merchandise and who, upon presentation

of necessary documents, is recognized as merchandise owner for the purpose of declaring and paying customs duties.

Consignee Marks - A symbol laced on packages for identification purposes; generally consisting of a triangle,

square, circle, diamond, cross, with letters and/or numbers as well as port of discharge. Consignment - Is the physical transfer of goods from a seller (consignor) with whom the title remains, to another

legal entity (consignee) who acts as a selling agent, selling the goods and remitting the new proceeds to the consignor.

Consignor - A term used to describe any person who consigns goods to himself or to another party in a bill of

lading or equivalent document. A consignor might be the owner of the goods, or a freight forwarder who consigns goods on behalf of his principal.

Consolidated Shipment - An arrangement whereby various shippers pool their boxed goods on the same

shipment, sharing the total weight charge for the shipment. Consolidator - An agent which brings together a number of shipments for one destination to qualify for

preferential airline rates. Consortium - The name for an agreement under which several nations or nationals (usually corporations) of

more than one nation, join together for a common purpose. It could be for management or exploitation of a natural resource, as in the case of some international petroleum consortiums.

Consul - A government official residing in a foreign country, charged with representing the interests of his or her

country and its nationals.

Consular Declaration - A formal statement, made to the consul of a foreign country, describing goods to be shipped.

Consular Documents - Special forms signed by the consul of a country to which cargo is destined.

Consular Invoice - A document, required by some foreign countries, describing a shipment of goods and

showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official of the foreign country, it is used by the country's customs officials to verify the value, quantity and nature of the shipment.


Container - means any structure so designed to hold and keep articles, materials and products together inside a

hold in the form of boxes, tanks or the like, for singular or unit handling and transport, generally having any internal volume or capacity of not less than one (1) cubic meter. It is further defined according to their uses as dry cargo, refrigerated, liquid bulk, platform, open top, solid bulk, ventilated, etc.

- The term container means a single rigid, non-disposable dry cargo, insulated, temperature controlled

flatrack, vehicle rack portable liquid tank, or open top container without wheels or bogies attached, having not less than 350 cubic feet capacity, having a closure or permanently hinged door that allows ready access to the cargo (closure or permanently hinged door not applicable to flatrack vehicle rack or portable liquid tank). All types of containers will have constructions, fittings and fastenings able to withstand without permanent distortion, all the stresses that may be applied in normal service use of continuous transportation. All containers must bear manufacturer's specifications.

Container Ship - Ocean going ship designed to carry containers both internally and on deck. Some are self

sustaining. Containerization - Is a concept for the ultimate unitizing of cargo used by both steamship lines and air cargo

lines. Containers allow a greater amount of cargo protection from weather, damage, and theft.

Containers (Air Cargo) - Many types of air cargo containers are offered. The containers are designed in various sizes and irregular shapes to conform to the inside dimensions of a specific aircraft. Containers (Ocean) - Are designed to be moved inland on its own chassis and can be loaded at the shippers plant for shipment overseas. Basic types of containers are; dry van, open top, half high, hi cube, flat rock, tank container, refrigerated container, insulated container, tilting container. Average outside dimensions are generally 20, 35, and 40 feet in length, 8 feet wide and 8 feet high standard and 9’6” high cube. Containerized Cargoes - mean cargoes packed in containers for easy handling or transportation of same as a

unit. Customs Bonded Warehouse - Is a warehouse where imported goods may be stored for a total of three years without the payment of duty or taxes. CIIS - Customs Inspection and Investigation Service, Bureau of Customs Customs Tariff - Is a schedule of charges assessed by the government on imported goods. CY (Container Yard) - The term CY means the location designated by Carrier in the port terminal area for receiving, assembling, holding, storing and delivering containers, and where containers may be picked up by shippers or re-delivered by consignees. No container yard (CY) shall be a shipper's, consignee's, NVOCC's, or a forwarder's place of business, unless otherwise provided. DA – Department of Agriculture DAF (Delivered At Frontier) - Is a monomodal (land) expression which should be further qualified by naming the

frontier (border post) up to which the seller is prepared to take responsibility for transport costs and the corresponding risks of transit.

The frontier is deemed to be on the seller's side of the applicable border unless the term is modified to

express that the point of transfer is the frontier on the buyer's side of the border. The seller must clear the cargo through customs on the export side of the border of handover, whereas the buyer must clear the goods through customs on the import side. Because the Frontier falls on the seller's side of the border, DAF can vary from other D terms in that the seller may not be responsible for all or even a part of the main carriage.

For example, if the transit involved the movement of cargo through several frontiers, the seller may pass risk

and responsibility at the first of these, obligating the buyer to arrange the main carriage thereafter. As a land term the application of DAF is for land-based operations and other D terms such as DDU or DDP should be considered if the transaction is not land-based. (i.e. it is not exclusively road or rail or a road/rail combination)

D.W. - Deadweight (tons of 2,240 lbs.)


Dangerous Goods - Articles or substance capable of posing a significant risk to health, safety or property, and that ordinarily require special attention when being transported.

Decommissioned Vessels - vessels which are not engaged in commercial trade, as certified to by the Marine

Industry Authority (MARINA) or the Philippine Coast Guard (PCG). Demurrage - A penalty for exceeding free time allowed for loading or unloading at a pier or freight terminal. Also

a charge for undue detention of transportation equipment or carriers in port while loading or unloading. DENR - Department of Environment & Natural Resources DES/DEQ - Terms prefixed 'D' are 'Contracts of Arrival' involving the passing of risk and responsibility at the point

where costs also terminate.

DES (Delivered Ex Ship) is Monomodal. Although not triggered by the use of the ship's rail, the point of handover (ship's side, arrived) will be inappropriate in a modern port. The buyer may not be able to take control at a point in a restricted port area. An alternative D term such as DDU might be better suited to represent an achievable point of handover for both parties. DES will often financially correlate to CFR. But, for the buyer DES represents CFR without the disadvantages of placing risks on the buyer, over which they have no control. (See CFR). From the seller's perspective, DES reverses the risk advantages of CFR, placing all risks with the seller until the cargo arrives at the named port. DEQ (Delivered Ex Quay) extends the shipper's responsibility beyond the arrival of the vessel to the point where the goods are discharged. Although not triggered by the use of the ship's rail, the point of handover (landside on the harbour, duty paid) is frequently inappropriate in a modern port environment. The buyer may not be able to take control at that point and an alternative D term such as DDP may be better suited to identify an achievable point of handover between the two parties.

Seller's using DEQ are cautioned that they must be in a position to pay the destination discharge fees both in

physical terms as well as administratively in accordance with any Exchange Control Regulations applicable in the country of Origin.

Caution is appropriate when using D prefixed terms with Documentary Credits as few 'documents' are

geared to record the passing of risks on arrival. DDP (Delivered Duty Paid) - Is a Multimodal term that must be qualified by naming the place to which the seller

is taking responsibility for transport costs and the risks of transit. These risks and costs include the payment of domestic duties in the buyer's country and any ancillary charges associated with the import clearing process at destination.

As with all of the D prefixed terms, this term is not easy to use in conjunction with a Documentary Credit and

in the case of DDP this payment difficulty extends to any form of Exchange document. As a multimodal term, DDP requires the use of Multimodal transport documents over monomodal documents such as Bills of Lading or Airwaybills.

Sellers are cautioned that the payment of foreign duties and taxes may be contrary to the Exchange Control

regulations of their country and that they should seek clarity on this point from their bank or appropriate authority. Equally, both parties should consider VAT if payable in the buyer's country. DDP may be modified to exclude the seller from having to pay a VAT that the buyer could recover directly. If this is not done, the seller's price may include this amount which otherwise could actually be recovered by the buyer. Regulations regarding sellers claiming VAT paid to foreign revenue services vary from country to country, and there is no clear-cut position in this matter. Both parties should seek guidance in this. Additionally, although the seller will pay Duties, the buyer would be named on the import customs entry and will have the obligation to the domestic Customs Authority for the accuracy of the declared tariff headings used and the rates of duty applied. Should these subsequently prove to be incorrect the buyer will have the obligation to bring any under recovery to account.


DDU (Delivered Duty Unpaid) - Is a Multimodal term that must be further qualified by naming the place up to which the seller is prepared to take responsibility for transport costs (and the corresponding risks of transit). This is excluding the payment of domestic duties and the ancillary clearance charges associated with the import process at destination.

DDU will often financially correlate to CPT. But, for the buyer DDU represents CPT without the

disadvantages of placing risks on the buyer, over which they have no control. (See CPT). From the seller's perspective, DDU reverses the risk advantages of CPT, placing all risks with

the seller until the cargo arrives at the named port. As with all of the D prefixed terms, this term is not easy to use in conjunction with a Documentary Credit and as a multimodal term, would require the use of Multimodal transport documents over any traditional monomodal documents such as Bills of Lading or Airwaybills. Sellers are further cautioned that, if the intended transit is beyond the point of entry in the country of destination, then their ability to move the goods to the final destination may be dependent on the buyer's ability to first clear the goods through the customs authority. The possibility of delays in transit and any resultant storage charges (should the buyer fail to conduct clearance in good time), should be noted. Seller's should be equally aware of additional charges which may be due for payment resultant from local taxes which do not fall into the category of 'duty', but are nevertheless payable prior to release.

DDU (and DDP) correlates closely to the generic expressions of 'free domicile', 'franco domicile' and 'free

house', which are frequently used in the transport industry. Each should be avoided due to their ambiguous nature.

DMA (Dimethylamine) (CH3)2NH Flammable gas with ammonia aroma, boiling at 7°C; soluble in water, ether, and

alcohol; used as an acid-gas absorbent, solvent, and flotation agent, in pharmaceuticals and electroplating, and in de-hairing hides.

Dockage (at Anchorage) - is the amount assessed against a vessel engaged in international or foreign trade,

including those engaged in barter trade, that do not berth but drop anchor at either a government or privately-owned port whether operated exclusively or commercially.

Dockage (at berth) - is the amount assessed against a vessel engaged in international or foreign trade, including

those engaged in barter trade, for mooring or berthing at a pier, wharf, bulkhead - wharf, river or channel marginal wharf at any national port in the Philippines; or for mooring or making fast to a vessel so berthed.

DOF - Department of Finance DPWH - Department of Public Works and Highways DTI - Department of Trade and Industry Domestic Cargoes - are cargoes brought to a pier, wharf or bulkhead to and from a port within the Philippine

waters. Export Declaration - a document required for every shipment of goods, whereby the exporter or his duly

authorized representative declares and certifies the full particulars of the shipment EDI or EDIFACT - Electronic Data Interchange for Administration, Commerce and Transport, from the UN-

backed electronic data interchange standards body, to create electronic versions of common business documents that will work on a global scale. One digital document under consideration, the International Forwarding and Transport Message will do the jobs of six different electronic messages currently in use.

Ex - Signifies that the quoted price applies only at the indicated point of origin (e.g. "price ex factory" means that

the quoted price is for the goods available at the factory gate of the seller).

EXW - Ex works. Same as the former "Ex Works." - Represents the minimum involvement of the seller and the maximum involvement of the buyer in the

movement of the goods from the point of 'works'.

The statement 'EXW' must be qualified to give the address of the 'works', which may be a factory, site or warehouse etc. Care should be taken to note that the actual point of manufacture might well vary from the place where the seller operates their commercial undertaking.


Under INCOTERMS 2000, risk and responsibility pass from the seller to the buyer when the cargo is made available on the ground at the 'works', at or on the agreed future date or future time, uncleared through customs. The seller must give advance notice of availability (how much notice would have to be predetermined e.g. through the sales contract). This point is important as the buyer assumes liability for all risks from the time of availability on the ground and is therefore exposed from that moment up to the event of collection. During this period, the buyer is liable for all risks to the cargo, even though they are not yet under the buyer's physical control, and this is further aggravated by the fact that the goods are generally uninsured throughout this period too.

The buyer and seller should only consider EXW when the buyer can actually arrange the customs clearing prior to export and for the immediate collection of the cargo on availability. The Seller should note that the export of the goods is NOT guaranteed under EXW and the buyer may, for example, opt to keep the goods in the country of origin. Although EXW is a popular term it remains complex. EXW is rarely compatible with documentary credits (for example) - and the term FCA often offers a more manageable alternative.

Export Cargoes - are cargoes brought to a pier, wharf of bulkhead intended for shipment to a foreign port. FAS (Free Alongside Ship)

- Seller is responsible for inland freight costs until goods are located alongside the vessel/aircraft for loading. Buyer is responsible for loading costs, ocean /air freight and marine/air insurance.

- is Monomodal in that it may only be used for transaction where the main carriage is by seafreight. Note

that the entire journey need not be by sea, but the moment of 'export' must be.

Under this term, which has a considerably long tradition, risk and responsibility pass from the seller to the buyer when the goods are placed alongside a named ship (or a ship operated by a named service) at a named area within a named port. FAS requires the seller to arrange export customs clearing.

The essential aspect of the term is that the vessel is in port prior to the seller delivering the cargo into the port area. However, in many markets, the seller is not allowed into the harbour area. Even if the seller can enter the port area, most operations involve the placing of cargo into a berth where the vessel in question is intended to arrive, as opposed to it having physically docked prior to the arrival of the cargo. Thus the vessel comes to the cargo rather then the cargo coming to the vessel.

There are significant risks associated with the older seafreight terms (such as FAS, FOB, CFR/CIF etc) specifically with regard to the transport documents issued. Careful consideration should be given to the appropriate section of the official INCOTERMS 2000 text dealing with 'proof of delivery'. In many cases, the modern documents issued by lines may present risk-management complications to the seller when using such an old term as FAS. The use of this term in the charter and bulk markets is attractive as an alternative to many of the traditional chartering terms that are often subject to unique definitions from country to country - or even between ports within one country.

FAK - Freight All Kinds - uniform charging scale applying to a number of commodities; as opposed to SCR

(Specific Commodity Rate) applying to one commodity only. FCA (Free Carrier) - Defines the conditions under which many sellers and buyers actually transfer risks. FCA

must be qualified by both naming the place where risks and responsibilities pass from the seller to the buyer and by identifying the carrier the buyer has appointed.

FCA requires the seller to take responsibility for risks and costs up to this handover, including export

customs clearance. It is important to consider that the nature of the carrier being used, and the various points of transfer that different modes of transport may involve, are subject to extreme variables. It is common that the transport used to deliver or handover is a different than the actual transport to be used for the main carriage (e.g. collected by road for an airfreight export). The term may well involve detailed instruction to make such distinctions and it should be noted that multimodal transport documents better serve this term than traditional documents such as Bills of Lading or Airwaybills.


For deep-sea transactions, FCA represents an excellent alternative to FOB, which is inappropriate in most modern port operations. However, under FCA the seller hands over risks/control of the cargo at a point prior to the vessel, frequently prior to the port. Although this reflects the physical condition of much seafreight trade conducted using 'FOB'; it is a departure from the commoner financial interpretation of 'FOB'. This normally obligates the seller to pay for the origin handling/loading and/or stowage charges raised by the port.

Under FCA, these charges are for the buyer's account. If this is not acceptable, the term may be modified to represent the passage of FCA risks with 'FOB' costs. FCA may involve the carrier collecting from the seller or the seller delivering to the carrier, dependant on the conditions of the sales contract.

F&D - Freight and demurrage

FOB (free on board) - Seller is responsible for inland freight and all other costs until the cargo has been loaded on the

vessel/aircraft. Buyer is responsible for ocean/air freight and marine/air insurance. - is one of the commoner trade terms in use. Yet this 'common' aspect of the term has resulted in the

myriad definitions found all over the world for FOB. Some of these directly contradict others, and many are supported by domestic legislation making such definitions unique to a specific country or port.

In defining FOB as an INCOTERM, it is expressed as being Monomodal and it can only be used for transactions

where seafreight is the main carriage. Therefore, as an INCOTERM, there is no application for FOB in road, rail or air transport. Under INCOTERMS 2000, risk and responsibility pass from the seller to the buyer when the goods pass over the (named or unnamed) ship's rail at the (named) port of loading, cleared for export by the seller. For FOB to apply, the seller must be in the physical position of being able to load the cargo over the rail under their own direct control i.e. the loading is undertaken by the seller's own labour, or by an agent that is under the contractual control of the seller. Further this process would have to be monitored by both the seller and buyer or their representatives. Generally, from the modern deep-sea export perspective, this control often cannot be achieved as the seller is either not allowed into the harbour area or, even in those extreme circumstances where they are, they have no influence over the party loading the vessel. The INCOTERM FOB still has an application in some markets, but these are more and more in the minority. Note that the use of an 'on-board' Bill of Lading or mate's receipt could be appropriate in recording the passage of risks under FOB making FOB one of the few terms still unavoidably dependant on such documents.

FOD - Free of damage

FPA - Free of Particular Average (Marine Insurance Term). A term used in marine insurance policies to indicate

that while the underwriter is unwilling to assume liability for ordinary partial losses due to the peculiar qualities of the particular article or to its form of package, he is willing to bear partial losses, the direct result of stranding, sinking, burning, collision, or other named peril

Foreign Transshipment Cargo - refers to any article arriving at the port from a foreign port or place and destined for shipment to another foreign port.

Forwarder, Freight Forwarder, Foreign Freight Forwarder - An independent business that dispatches

shipments for exporters for a fee. The firm may ship by land, air, or sea, or it may specialize. Usually it handles all the services connected with an export shipment; preparation of documents, booking cargo space, warehouse, pier delivery and export clearance. The firm may also handle banking and insurance services on behalf of a client.

Free Alongside - Quoted price includes the cost of delivering the goods alongside a designated vessel.

Free In (F.I.) - Cost of loading a vessel is borne by the charterer Free In and Out (F.I.O.) - Cost of loading and unloading a vessel is borne by the charterer.


Free Out (F.O.) - Cost of unloading a vessel is borne by the charterer. Free Port - A port which is a foreign trade zone, open to all traders on equal terms; more specifically a port where merchandise may be stored duty-free, pending re-export or sale within that country.

Free Storage Period - means the period allowed for any article, baggage and/or container to be stored in any

port premises, cargo sheds and warehouses of the Authority without the payment of storage fee. Freight Forwarder - An individual or company , acting on the behalf of a shipper, who arranges all necessary

details of shipping and documentation for a manufacturer or exporter, which includes employing the services of a carrier of carriers.

Full Container Load (FCL) - means a container loaded with cargoes belonging to a single consignee and/or

covered by only one Bill of Lading. FCL - Full container load, full car load G.R.Wt./G.W. - Gross Weight

Gang/Workgang - Group of stevedores usually 12 members with supervisor assigned to a hold or portion of the

vessel being loaded or unloaded. GRT - refers to the gross registered tonnage of the vessel. General Breakbulk Cargo - means those that are listed in a number of bills of lading, each consisting of different

commodities. These include but are not limited to bagged cargoes, crates, cylinders, cases, baskets, bales, rolls, drums and such other like or similar types of packing including vehicles, live animals, crated or uncrated fowls such as chicken, ducks and the like and other loose cargoes.

Gross Weigh - Entire weight of goods, packing, and container,, ready for shipment. Hatch - The cover of - or opening- in the deck of a vessel, through which cargo is loaded.

Heavy Lift Vessel - Specifically designed to be self sustaining with heavy lift cranes, to handle unusually heavy and/or out-sized cargoes. Heavy Lifts - Freight too heavy to be handled by regular ship's tackle

Hub - A central location to which traffic from many cities is directed and from which traffic is fed to other areas.

Hundredweight (cwt.) - A short ton hundredweight = 100 pounds. Long ton hundredweight = 112 pounds. Husbanding - Term used by steamship lines, agents, or port captains who are appointed to handle all matters in assisting the master of the vessel while in port to obtain bunkering, fresh water, food and supplies, payroll for the crew, doctors appointments, ship repair, etc.

Import Cargoes - are cargoes coming from a foreign country to a pier, wharf or bulkhead by vessel coming from

a foreign port. Irrevocable Letter of Credit - A letter of credit with a fixed expiration date that carries the irrevocable obligation

of the issuing bank to pay the exporter when all of the terms and conditions of the letter of credit have been met. ISO - International Standards Organization also referred to as the International Organizational for Standardization.

Just-In-Time (JIT) - The principle of production and inventory control in which goods arrive when needed for

production or use. Knock Down (KD) - An article taken apart, folded or telescoped in such a manner as to reduce its bulk at least

33 1/3% below its assembled bulk. Knot (Nautical) - The unit of speed equivalent to one nautical mile, or 6,080.20 feet per hour or 1.85 kilometers per hour.


L & D - Loss and damage L.C.L. - Less than container load

L/C (Letter of Credit) - A document issued by a bank per instructions by a buyer of goods, authorizing the seller

to draw a specified sum of money under specified terms. Issued as revocable or irrevocable. Lay-up areas - The areas designated by PPA for vessels that are laid-up. These are identified by the

corresponding coordinates (latitudes and longitudes) in the Nautical Chart produced by the Mapping and Resource Information

Laid-up vessels - vessel which have been decommissioned or otherwise unemployed and idle while waiting for

better business prospects for their operations or when so authorized by the Authority. Lay-up Fee - is the amount levied against vessels engaged in domestic trade which are temporarily authorized to

lay-up and anchor at designated lay-up areas. LCL Container (Less Container Load) - refer to containerized cargoes owned by or belonging to more than one

shipper/consignee and / or covered by more than one bill of lading. Less than Truck Load (LTL) - Rates applicable when the quantity of freight is less than the volume or truckload

minimum weight. Letter of Credit (L/C) - A document issued by a bank at a buyer's request honoring debt obligations to the seller upon receipt of the document. Letter of Credit - payment by sight draft - The exporter receives guaranteed payment from the confirming bank in the U.S. upon presentation of the sight draft and documents required by the letter of credit.

Lighter - An open or covered barge equipped with a crane and towed by a tugboat. Used mostly in harbors and inland waterways.

Lighterage - The cost of loading or unloading a vessel by means of barges alongside.

Liner - The word "liner" is derived from the term "line traffic" which denotes operation along definite routes on the basis of definite, fixed schedules; a liner thus is a vessel that engages in this kind of transportation, which generally involves the haulage of general cargo as distinct from bulk cargo.

Liquidation - The finalization of a customs entry. Livestock - Common farm animals Lkg. & Bkg. - Leakage and breakage. Lo/Lo - The acronym meaning "lift-on,lift-off," denoting the method by which cargo is loaded onto and discharged

from an ocean vessel, which in this case is by the use of a crane. Load Factor - Capacity sold as against capacity available, expressed as a percentage. Ltge. - Lighterage LUNAC – brand name of an Oleic Acid MCT - Mindanao Container Terminal M/T - Metric Ton (2204 lbs.) M/V or M.V - Motor vessel Manifest - A list of the goods being transported by a carrier. Marine Insurance - An insurance which will compensate the owner of goods transported overseas in the event

of loss which cannot be legally recovered from the carrier. Mark - As used on containers in foreign trade, a symbol or initials shown together with the port of importation and

the final destination, if different. Example A.G. y Cia., Bogota via Barranquilla. Marks are registered at appropriate customs houses; they also appear on bills of lading and invoices. In domestic trade, it is


common to mark containers with the name and address of the recipient, but this is rarely done in foreign trade.

Marking - Every article of foreign origin, or its container, imported into the United States shall be permanently

marked in a conspicuous place in a manner which would indicate to the ultimate purchaser the English name of the country of origin of the article.

Mate's Receipt - Receipt of cargo by the vessel, signed by the mate (similar to dock receipt).

Measurement Ton - The measurement ton (also known as the cargo ton or freight ton) is a space measurement,

usually 40 cubic feet or one cubic meter. The cargo is assessed a certain rate for every 40 cubic feet or 1 cubic meter it occupies.

MFN - (Most Favored Nation) Designation for countries which receive preferential tariff rates. This is no longer the best tariff structure available.

MMA (Mono-Methyl Amine) - Colorless gas with the strong, fishy, ammonia-like odor characteristic of amines.

Methylamine is a raw material for N-methylpyrrolidone and also for carbamate insecticides and other carbamate-based products. Relatively smaller quantities are converted to alkylalkanolamines, surfactants and explosives.

Min. B/L - Minimum bill of lading MRL (Minimum Residue Level) – minimum quantity of pesticides in agricultural products like fruits and

vegetables mt./mty – Empty MW - Minimum weight factor Minimum Charge - it is the least amount of payment due from port users based on prescribed rates. NEDA - National Economic and Development Authority N n.e.m. - Not elsewhere mentioned (English) n.e.s. - Not elsewhere specified N.O.E. - Not otherwise enumerated N.O.H.P. - Not otherwise herein provided N.O.I. - Not more specifically described N.O.I.B.N. - Not otherwise indicated by number; Not otherwise indicated by name. N.O.S. - Not otherwise specified N.T. - Net tons NVOCC (Non-vessel operating carrier carrier) - An F.M.C. registered cargo consolidator of small shipments in

ocean trade, generally soliciting business and arranging for or performing containerization functions at the port. These carriers issue their own bill of lading referred to as a house bill of lading.

Net Terms - Free of charters' commission Net Weight - (Actual Net Weight) Weight of goods alone without any immediate wrappings; e.g., the weight of

the contents of a tin can without the weight of the can. Non-Tariff Barriers (NTB) - Economic, political, administrative or legal impediments to trade other than duties,

taxes and import quotas

O.D. - Outside diameter O.R. Det. - Owner's risk of deterioration


O.r.b. - Owner's risk or breakage. O.R.F. - Owner's risk of fire or freezing O.R.L. - Owner's risk of leakage O.R.W. - Owner's risk of becoming wet O.S. & D. O/N - Order notify; own name O/o - Order of O/R - Owner's risk Ocean Bill of Lading - A receipt for cargo in transit, and a contract between the exporter and an ocean carrier

for transportation and delivery of goods to a specified party at a specified foreign destination. Issued after the vessel has sailed and the cargo has been entered in the ship's manifest.

Open Account - A high-risk trade arrangement in which goods are shipped to a foreign buyer without guarantee

of payment. Open Policy - A cargo insurance policy that is an open contract; i.e., it provides protection for all an exporter's

shipments afloat or in transit within a specified geographical trade area for an unlimited period of time, until the policy is cancelled by the insured or by the insurance company. It is "open" because the goods that are shipped are also detailed at that time. This usually is shown in a document called a marine insurance certificate.

Original Equipment Manufacturers (OEM accounts) - Customers who incorporate the exporter's product into

their own merchandise for resale under their own brand names. PPA - refers to the Philippine Ports Authority P.A. - Particular average P.W. - Packed weight Pallet - Load carrying platform to which loose cargo is secured before placing aboard vessel. Perishables - Any cargo that loses considerable value if it is delayed in transportation (Usually refers to fresh

fruit and vegetables). PENRO – Provincial Environment and Natural Resources Office of the DENR Phytosanitary Inspection Certificate - A certificate issued by government indicating that a shipment has been

inspected and is free of harmful pests and plant diseases. Pilferage - As used in marine insurance policies, the term denotes petty thievery, the taking of small parts of a

shipment, as opposed to the theft of a whole shipment or large unit. Many ordinary marine insurance policies do not cover against pilferage, and when this coverage is desired, it must be added to the policy.

Pilotage Rates - fee paid to a harbor or river pilot ; manual navigation or controlling of a ship Port Authority - A government body (city, county or state) which in international shipping maintains various

airports and/or ocean cargo pier facilities, transit sheds, loading equipment warehouses for air cargo, etc. Has the power to levy dockage and wharfage charges, landing fees, etc.

Port Charges - refer to port dues, dockage at berth, dockage at anchorage, usage and lay-up fees, wharfage,

storage fees assessed on the vessel/cargo. Port Dues - is the amount assessed against a vessel engaged in foreign trade based on its total GRT or part

thereof, including those engaged in barter trade for each entrance into and departure from a port of entry in the Philippines.


Private Port - for purposes of the 1994 Port Tariffs Rates application, a private port is a port duly registered with the PPA and which is owned and operated exclusively or commercially by a private person or entity catering to its own cargo or cargoes owned by third parties.

Port of Discharge - Port where vessel is off loaded and cargo discharges. Port of Entry - A port at which foreign goods are re-admitted into the receiving country.

Port of Loading - Port where cargo is loaded aboard the vessel lashed and stowed

Power of Attorney - A document that authorizes a customs broker to sign all customs documents on behalf of

an importer.

Pre-Advice - Preliminary advice that a letter of credit has been established in the form of a brief authenticated wire message. It is not an operative instrument and is usually followed by the actual letter of credit.

Prepaid Freight - Generally speaking, freight charges both in ocean and air transport may be either prepaid in

the currency of the country of export or they may be billed collect for payment by the consignee in his local currency. However, on shipments to some countries freight charges must be prepaid because of foreign exchange regulations of the country of import and/or rules of steamship companies or airlines.

Pre-Slung Cargo - Cargo shipped already in a cargo sling or net. Usually prepared and loaded at pier ready for

arrival of vessel and subsequent loading (i.e. coffee in bags, coconut shells, etc). Price Quotation/Proforma Invoice - An invoice prepared by the seller in advance of shipment that documents

the cost of goods sold, freight, insurance, and other related charges. It is often used by the buyer to secure a letter of credit, an import license or a foreign currency allocation.

Prima Facie - Latin, "on first appearance." A term frequently encountered in foreign trade. When a steamship

company issues a clean bill of lading, it acknowledges that the goods were received "in apparent good order and condition" and this is said by the courts to constitute prima facie evidence of the conditions of the containers; that is, if nothing to the contrary appears, it must be inferred that the cargo was in good condition when received by the carrier.

Pro Number - A number assigned by the carrier to a single shipment, used in all cases where the shipment must

be referred to. Usually assigned at once.

Proforma - When used with the title of a document, the term refers to an informal document presented in advance of the arrival, or preparation of the required document, in order to satisfy a customs requirement.

Proof of Delivery - Add-on service in express market, delivered either by phone or courier. Often offered free.

Quay Crane Charges – a fee paid in using the waterside platform that runs along the edge of a port or harbor,

where boats are loaded and unloaded. Queuing area - form of waiting line Rebate - A deduction taken from a set payment or charge. As a rebate is given after payment of the full amount

has been made, it differs from a discount which is deducted in advance of the payment. In foreign trade, a full or partial rebate may be given on import duties paid on goods which are later re-exported.

Reciprocity - A practice by which governments extend similar concessions to one another.

Red Clause Letter of Credit - A letter of credit that allows the exporter to receive a percentage of the face value of the letter of credit in advance of shipment. This enables the exporter to purchase inventory and pay other costs associated with producing and preparing the export order.

REFG. - Refrigerating; Refrigeration Regs. - Registered Tonnage Retaliation - Action taken by a country to restrain its imports from another country that has increased a tariff or

imposed other measures that adversely affects the firsts country's exports. RORO (ROLL ON-ROLL OFF) - Direct drive on/drive off wheeled vehicles on specially-designed sea-going

vessels.


Revenue Tonnage - means 1,000 kgs or 1.1326 cubic meters (40 cu. Ft.) whichever yields the greater amount of revenue.

S. & F.A. - Shipping and forwarding agent.

S.I.T. - Stopped in Transit S.L. & C. - Shipper's Load and Count S.L. & T. - Shipper's Load and Tally

S.O.L. - Ship Owner' Liability S.R. - Shipping Receipt Sanitary and Health Certificate - A statement signed by a health organization official certifying the degree of

purity, cleanliness, or spoilage of goods, and the health of live animals. Self-Sustaining - Vessel has its own cranes and equipment mounted on board for loading/unloading. Used in

ports where shore cranes and equipment are lacking. Shipment - Freight tendered to a carrier by one consignor at one piece at one time for delivery to one consignee

at one place on one bill of lading. Shipper's Export Declaration - A form required by the Treasury Department and completed by a shipper

showing the value, weight, consignee, destination, etc., of export shipments as well as Schedule B identification number.|

Ship's Manifest - An instrument in writing containing a list of the shipments comprising the cargo of the vessel. Ship's Tackle/Ships Gear - All rigging, etc., utilized on a ship to load or discharge cargo. Shut-out Cargoes - are cargoes brought to the premises, cargo sheds and warehouses of the government,

wharf or bulk-head for export or domestic shipment which are not loaded on the intended carrying vessel provided that such carrying vessel has actually docked.

Sight Draft - A draft payable upon presentation to the “drawee”. Compare date draft and time draft. Single Entry Charter - A non-scheduled flight carrying the car Stevedoring - cargo handling, ship side Storage Charge - is the amount assessed on articles, baggage and containers for storage in the port premises,

cargo shed and warehouses of the government. Stowage - The lacing of cargo in a vessel in such a manner as to provide the utmost safety and efficiency for the

ship and the goods it carries. Surety Bond - A bond insuring against loss or damage or for the completion of obligations. Stuffing Report - contains the description of goods to be shipped, number of containers and seal, size of the van Stuffing and Stripping.

- the packing and unpacking of containers - We take care of the loading and unloading of your goods, regardless of size and shape and whether

they arrive loose, wrapped or unwrapped, palletized, crated etc Tally Sheet - List of cargo, incoming and outgoing, checked by Tally clerk on dock. Tare Weight - The weight of the container and/or packing materials only - excluding the weight of the goods

inside the container. Tariff - A general term for any listing of rates, charges, etc. the tariffs most frequently encountered in foreign

trade are tariffs of the international transportation companies operating on sea, on land, and in the air; tariffs of the international cable, radio, and telephone companies; and the customs tariffs of the various countries, which list goods that are duty free and those subject to import duty, giving the rate of duty in each case. There are various classes of customs duties.


Temperature Controlled Cargo - Any cargo requiring carriage under controlled temperature TEU - Twenty foot equivalent unit of one shipper. Third Party Cargoes - refer to cargoes not owned by the private pier owner/wharf owner/operator. THC - Total Handling Charge TL - Truckload

Ton - Freight rates for liner cargo generally are quoted on the basis of a certain rate per ton, depending on the

nature of the commodity. This ton, however, may be weight ton or a measurement ton.

Ton-Deadweight - Indicates the carrying capacity of the ship in terms of the weight in tons of the cargo, fuel, provisions and passengers which a vessel can carry.

Ton-Displacement - The weight of the volume of water which the fully loaded ship displaces. Ton-Registered - Indicates the cubical contents or burden of a vessel in tons of 100 cubic feet. The space within

a vessel in units of 100 cubic feet. Trade - A term used to define a geographic area or specific route served by carriers. Tramp - A tramp is a vessel that does not operate along a definite route on a fixed schedule, but calls at any port

where cargo is available. Transferable Letter of Credit - A letter of credit that allows all or a portion of the proceeds to be transferred from

the original beneficiary to one or more additional beneficiaries. Transshipment - The transfer of a shipment from one carrier to another in international trade, most frequently

from one ship to another. In as much as the unloading and reloading of delicate merchandise is likely to cause damage, transshipments are avoided whenever possible.

Truckload - Truckload rates apply where the tariff shows a truckload minimum weight. Charges will be at the

truckload minimum weight unless weight is higher.

Trust Receipt - Release of merchandise by a bank to a buyer for manufacturing or sales purposes in which the bank retains title to the merchandise.

Transit Cargo for Export - refers to any article arriving at any domestic port from another domestic port or place

and destined for reshipment to a foreign port. Usage Fee - the amount assessed against a vessel engaged in domestic trade for berthing, for making fast to a vessel so berthed or for mooring at an anchorage area. Valuation Charges - Transportation charges assessed shippers who declare a value of goods higher than value

of carrier's' limits of liability.

VASP - Value Added Service Provider VAT (Value-Added Tax) - A sales or consumption tax which the end user pays. Typically, this is a "hidden" tax,

added to the list price of the goods in question. Ves. – Vessel Volume Weight - Used when calculating air freight when the size of the carton is greater than the average

weight, calculated by multiplying the length times the width times the height and dividing by 166.

Vessel for Drydocking - refer to vessels or watercrafts intending to undergo dry-docking/ repair as required by the Classification Society or other government agencies.

Vessel in Distress - a vessel which has suffered engine trouble, marine accident or has met a typhoon or other

natural calamities or disasters during its voyage that forced her to call at the port for repair, medical help or shelter.

Vessels for strapping - refer to vessels or watercrafts which are no longer seaworthy to undertake voyage and

are eligible only for breaking up.


W. & I. - Weighing and Inspection W.G. - Weight guaranteed W.P.A. - With Particular Average W/M - Weight and/or measurement W/R - Warehouse receipt Warehouse Receipt - A receipt of commodities deposited in a warehouse, identifying the commodities

deposited. It is non-negotiable if permitting delivery only to a specified person or firm, but it is negotiable if made out to the order of a person or firm or to a bearer. Endorsement (without endorsement if made out to bearer) and delivery of a negotiable warehouse receipt serves to transfer the property covered by the receipt serves to transfer the property covered by the receipt. Warehouse receipts are common documents in international banking.

Warehouse- to-Warehouse - A clause in marine insurance policy whereby the underwriter agrees to cover the

goods while in transit between the initial point of shipment and the point of destination, with certain limitations, and also subject to the law of insurable interest. When it was first introduced, the warehouse-to-warehouse clause was extremely important, but now its importance is diminished by the marine extension clauses, which override its provisions.

Weight - (a) Gross - The weight of the goods including packing, wrappers, or containers, internal and external. The total weight as shipped (b) Net - The weight of the goods themselves without the inclusion of any wrapper (c) Tare - The weight of the packaging or container (d) Weight / Measurement Ton - In many cases, a rate is shown per weight/measurement ton, carrier's option. This means that the rate will be assessed on either a weight ton or measurement ton basis, whichever will yield the carrier the greater revenue. As example, the rate may be quoted on the basis of 2,240 pounds or 40 cubic feet or of 1 metric ton or 1 cubic meter (e) Weight Ton - There are three types of weight ton; the short ton, weighing 2,000 pounds; the long ton, weighing 2,240 pounds; and the metric ton weight 2,204.68 pounds. The last is frequently quoted for cargo being exported from Europe.

Weight Load Factor - Payload achieved as against available, expressed as a percentage. Cargo is frequently limited by volume rather than weight; load factors of 100% are rarely achieved.

Weight, Legal - Net weight of goods, plus inside packing.

Wet Lease - An arrangement for renting an aircraft under which the owner provides crews, ground support equipment, fuel and so on (of dry lease).

Wharfage

- A charge assessed by a pier or dock owner against the cargo or a steamship company for use of the pier or dock.

- is a charge on all cargoes, whether containerized or not coming in/going out or transhipped through a port on the basis of the total metric or revenue tonnage whichever is applicable.

X Heavy - Extra Heavy

X Strong - Extra strong XX Heavy - Double extra heavy XX Strong - Double extra strong Sources: PPA, DTI, BOC, Shippers, Truckers


ACKNOWLEDGEMENT

The Study Team wishes to thank and acknowledge the following: Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. Mr. Jaime Rafael U. Paguio Ms. Lordilie S. Enjambre Ms. Jenneth Balaba

Cagayan de Oro City Council Hon. Ian Mark Lacaya, Chair, Committee on Transport and Utilities Hon. Roger Abaday, Councilor, Cagayan de Oro City 1st District Confederation of Philippine Exporters Foundation Region 10A Chapter, Inc. Ms. Marlene M. Camat Mr. Wilson C. Amad Mr. Venchito C. Bullecer Ms. Vivian B. Libao Mr. Arturo D. Mercader Mr. Emmanuel C. Soloria Mr. Artemio A. Cruz, Jr. Department of Agriculture Regional Field Unit-10 RED Lealyn A. Ramos Ms. Honey Gladys A. Valledor Ms. Carmelita Bajarla Ms. Hyacinth Flores Department of Finance – Bureau of Customs (DOF-BOC) Atty. Abedin P. Macapasir Ms. Bellarmine C. Valencia Atty. Roswald J. Pague Mr. Santiago Arrabaca, Jr. Mr. Lowell L. Medija Department of Public Works & Highways-10 Dir. Jerome Dela Rosa Engr. Virgincita Lomoto Department of Trade and Industry -10 Dir. Alicia V. Euseña ARD Linda O. Boniao Ms. Liza M. Alcanzar Ms. Emelia A. Lasquites Mr. Nelson N. Catubig Ms. Lodie M. Cadiz Department of Transportation and Communication - Land Transportation Office-10 Dir. Sulta Porcawa Dia Mr. Napol G. Garcia Department of Transportation and Communication - Maritime Industry Authority-10 Dir. Marianito D. Mendoza Department of Transportation and Communication - Philippine Ports Authority Engr Efren B. Bollozos Mr. Reynaldo B. Lumbay Ms. Lolita A. Cabanlet

Engr. Isidro Butaslac, Jr.


ETX Trucking Services Mr. Edilberto Tiu Filipinas Port Services, Inc. Mr. Jose Puentespina Loadout TLC Mr. Matildo Helia (Truck Driver) Lorenzo Shipping Inc. Mr. Francisco Descallar

Manila North Harbor Port, Inc. Mr. Ferdinand Inacay MCC Transport Corp. Mr. Edward Peña Mindanao International Container Terminal Services, Inc. Mr. Rafael G. Lauron Mr. Jose Mari G. Fernandez Nathan and Associates, Inc. - LINC-EG Program Mr. Rafael G. Evangelista, Jr. Ms. Lynn Sison Ms. Heidi Grace Mendoza National Economic and Development Authority-10 Dir. Leon M. Dacanay, Jr. Engr. Jaime H. Pacampara Ms. Estrella R. Peñaloza

Oriental Port and Allied Services, Inc. (Cebu City) Eng’r. Emmanuel Perrales OROPORT Cargohandling Services, Inc. Mr. Franklin U. Siao

Mr. Rey Cababaros Mr. Lorimer Moralda PHIVIDEC Industrial Authority Mr. Dante F. Clarito Ms. Elvira Garcia

Portmizer, Inc. (Makati City) Mr. Aris Ramos Quiltrans Prime Carrier Mr. Bartolome Quilab Mr. Jobert Jumawan (Truck Driver) Solid Shipping Lines Mr. Mar Ybañez Stinis (Manila) Mr. Cris Ayonon


Online and Other References - A new approach to handling charges by Willy Lin, Chairman - Hong Kong Shippers'

Council

- Asia-Australia Discussion Agreement (AADA)

- Australian Competition and Consumer Commission (ACCC)

- Bureau of Customs Website

- Bureau of Internal Revenue - Tax Information & Value Added Tax

- Calls to Abolish Terminal Handling Charges Intensify in Indonesia

- Cebu Ports Authority

- Confederation of Truckers Association of the Philippines (CTAP)

- European anti-trust legislation

- European Union, the Competition Directorate-General of the European Commission

- Federation of ASEAN Shippers’ Councils (FASC) held a meeting with the Intra-Asia

Discussion Agreement (IADA) on 27 April 2004 in Singapore on the Terminal

Handling Charge (THC).

- Kluwerlaw 2009

- Land Transportation Office (LTO) Website

- Light Rail Transport Authority

- Liner Shipping & EU Competition Law

- Manila North Tollways Corporation

- Metro Pacific Tollways Corporation

- Metro Rail Transit Authority

- Philippine Ports Authority

- Philippine Shippers Bureau

- Port Calls

- Presentations and Materials from the Mindanao Logistics Conference 2009

- Province of Bukidnon Official Website

- Shippers in the greater China area attack surcharges, rates, cartels and conditions of

carriage

- South Harbor, Manila

- Sun Star Cagayan de Oro

- THC Advisory, Maersk Lines

- The ASEAN Senior Transport Officials Meeting (STOM)

- The Shippers' Voice - June 30, 2009 ⋅

- Xinhua News Agency – CEIS 2005


Ofelia Elanea D.

Chaves

(Technical Staff)

Rema Weena C.

Romualdez

(Technical Staff)

THE STUDY TEAM

Project Manager

(Michael Joseph R. Ignacio)

LINC-EG

Project Adviser

(Lynn M. Sison)

Project Consultant

(Noel M. Tan)

Project Admin

(Carina B. Sumugat)

Final Report Shipping Costs and Competitiveness in Northern Mindanao

Documents

Transcript of Final Report Shipping Costs and Competitiveness in Northern Mindanao