Wednesday, June 23, 2021

Cebu exporters face big problem in logistics, global supply chain

CEBUANO exporters are currently facing a worsening problem in the global supply chain and logistics due to the lack of vessel space, soaring freight rates and container shortage that have resulted in shipment delays and huge losses.

Philippine Exporters Confederation Inc. (Philexport) Cebu executive director Fred Escalona blamed these on the Covid-19 pandemic which continues to wreak major havoc on the global supply chain.

“It is a result of the pandemic. It is a global problem. There are a lot of victims. Exporters all around the world are complaining,” he said.

Escalona said the high cost of freight can be attributed to the varying protocols implemented in ports, especially on crew change, causing some shipping lines to reduce their fleet.

“It’s my take. It could be realistic because the crew will disembark and go to quarantine. They are placed in hotels, and some shipping lines are spending for the additional costs. Where would they pass on these costs? To the customers,” he said.

He said the industry is losing billions as it faces the big problem, marring the recovery of the export sector.

Nelson Bascones, an exporter for processed seafood and former Philexport Cebu president, noted that there is no available space in the vessels, preventing their products from reaching the intended market in the US.

“We’re supposed to ship at least one container a week. Last April, we did not ship a single container as well as this June,” he said.

Bascones added there are also no available containers.

He said ports are also congested because of the reduction of labor, especially in the US.

“The US hasn’t bounced back. There is also a decrease in the containers available because it was stuck in the US. The problem now is that they didn’t deploy some of their vessels because there was no demand before,” he said.

Now that the demand is back and the market has recovered, exporters are facing a lack of vessel space and container shortage.

“What the government should do is to analyze the root of the problem. We cannot ship and our storage is full,” he said.

Furniture exporter Pete Delantar, president and chief executive officer of Nature’s Legacy Eximport, shared the same sentiment.

He said his company is facing delivery delays of its furniture and home furnishings abroad due to these shipping issues.

Their buyers who also own stores are also facing penalties for missing out on selling and launching schedules. Because of this, Delantar said, they get paid late due to these delays all over their markets in the US, Europe, Australia and the Middle East.

Delantar added they have already submitted a complaint to the Department of Trade and Industry Export Management Bureau.


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