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Monday, April 14, 2003
Shippers urged to pool cargoes to cut costs
DUE to high logistics and shipping costs, Philippine products remain more expensive than other imported items in the country. This problem has become one of the factors that deter competitiveness.
Thus, the Philippine Interisland Shipping Association (Pisa) is urging exporters and shippers to pool their cargoes to cut costs.
Pisa officials, through its executive director Leonardo Odono said the cargo consolidation strategy would elicit easier negotiation for volume discounts with shipping lines.
To make this possible, exporters and shippers should organize themselves, pool their cargoes, and haggle as one group to the shipping lines to avail of substantial discounts.
The prevailing rate for corn shipments from Cagayan de Oro to Manila is P542 per metric ton and P850 per metric ton if coming from General Santos. The shipping cost reduces inversely if the cargoes become heavier.
"What is important is to get the maximum number of exporters into the pool to achieve a critical mass of cargo commitments to project a credible bargaining posture vis-à-vis the shipping lines," Odono was quoted as saying during a conference with the members of the Chamber of Furniture Industries of the Philippines earlier.
Most of the local products need to be transshipped from various ports in the country to Manila, making it relatively more expensive than exports to other countries
Pisa officials believe that transshipments may be avoided with the establishment of a regional hub port and a direct service to the port of destination is made available.
Another cost cutting measure, the Pisa official said, is for the group of shippers and exporters to directly book with foreign shipping lines as going through the freight forwarders result in higher costs.
In the absence of a regional hub port, Odono urged shippers to transport their cargoes directly to Manila International container terminal or the South Harbor instead of the North Harbor to avoid extra handling costs.
Pisa also suggests clustering of production activities in strategic location to minimize transshipment costs. CEU
(April 14, 2003 issue)
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