logistics study completed
To support local exporters and establish an updated document on the state of competitiveness of transporting key commodities of Northern Mindanao, the Confederation of Philippine Exporters Foundation Region 10 Chapter, Inc. (PhilExport-10A) recently completed its study entitled “Shipping Cost and Competitiveness in Northern Mindanao – A Closer View on Northern Mindanao’s State of Competitiveness”.
The focus of the study is the Cagayan de Oro base port and the Mindanao Container Terminal (MCT), being Mindanao’s strategically-located gateways. Aside from referencing with government offices, the study team of Mr. Noel Tan and Mr. Mike Ignacio conducted a survey among shippers, truckers, shipping lines, cargo handlers and importers within Northern Mindanao.
With the data gathered, the study tried to identify present and pressing transport-related issues detrimental to Northern Mindanao’s competitiveness of selected export and import commodities. The study also showcased the best practices done on the different segments on the logistics chain, aimed at reducing costs and maximizing efficiency. Finally, the study attempted to provide recommendations which would lead to policy changes in the ports, shipping and infrastructure at all levels of government.
Among the study results, it was discovered that exporters are raising the issue of double charges when shipping their goods. An examination of the costs of shipping would illustrate that an exporter has to pay terminal handling charges (THC) to the shipping line aside from paying the port charges to the port operator for the same activities on the ground. Aside from that, another pressing issue is the difficulty in procedures as a result from policy disconnects. Initiatives from the central offices of the national government agencies do not easily translate to areas like Cagayan de Oro. Laws which were passed in order to simplify procedures for exporters are also not strictly implemented.
Nevertheless it was also learned that both ports have accommodated the Bureau of Customs (BOC) for free in their respective areas, which resulted to the BOC’s non-charging of inspection site fees and to comparably low charges for importers. The bureau also ensures that all new exporters undergo a full inspection before given the clearance to send their products overseas. Perhaps one best practice that shows the initiative of the local stakeholders is the setting up of a vessel tracking system for the whole Macajalar Bay. The system utilizes the tower and radar system of the MCT, enabling the Coast Guard to monitor all incoming and outgoing vessels within the stretch of the bay.
While it can be summed up in the study that Northern Mindanao is a competitive place due to the presence of fair roads and infrastructure facilities as well as comparably low trucking and handling rates, results also show that exporters and other stakeholders are endorsing for the full compliance of EO 554, which orders the appropriate agencies to improve the competitiveness of the country’s export sector by simplifying exporting procedures and documentation or cutting down the fees of such requirements. It was noted that while other regional offices of national government agencies complied with the directive, other offices have not.
If the EO 554 shall be fully implemented, PhilExport 10-A, through the study, sees that the establishment of One-Stop-Shop facilities within the ports can be made possible. An improved system that can issue exporters their commodity clearance at a shorter period and enable the transport of their goods on time is expected to further enhance the competitiveness of Northern Mindanao.
The study highlights and draft report was presented last April 23 to representatives of the Local Implementation of National Competitiveness for Economic Growth (LINC-EG) program and the United States Agency for International Development (USAID), which facilitated and funded the study.
Mindanao's distance to the traditional markets and exports is a major competitiveness issue since logistics costs are deemed higher in terms of freight and associated costs. Mr. Wilson C. Amad, PhilExport-10A President, looks forward to using its recently concluded logistics study to push for the economic growth and development of its members and other players in the export business.
