USAIID: LIINC-EG Program USA D: L NC-EG Program

SHIPPING COST AND COMPETITIVENESS IN NORTHERN MINDANAO
“A CLOSER VIEW ON NORTHERN MINDANAO’S STATE OF COMPETITIVENESS”

May 21,, 2010 May 21 2010

Confederation of the Philippine Exporters’ Foundation Region 10 Chapter, Inc.

TABLE OF CONTENTS

1. Introduction 1.1 Background 1.2 Objectives 1.3 Study Area 1.4 Review of Relevant Studies 1.4.1 Master Plan Study of Cagayan de Oro 1.4.2 RORO for Mobility Enhancement 1.4.3 Master Plan for Strategic Ports in the Phils. 1.4.4 Metro Cagayan de Oro Road Network Development 1.4.5 Domestic Shipping Dev’t Project of the Phils. 1.4.6 The Cost of Exporting a Container from the Phils. 1.4.7 Phil. Logistics Study 1.4.8 Mindanao Logistics Infrastructure Improvement Project 1.5 Study Methodology and Approach 1.5.1 A Review on Government Infrastructure Initiatives 1.5.2 Collection and Review of Information from Past Studies 1.5.3 Conduct of Surveys & Interviews of Industry 1.5.4 Validation session and Survey Trials 1.5.5 Data Processing and Analysis 1.5.6 Completion of Actual Logistics Cost Structures 1.5.7 Report Writing 2. Logistics Conditions in Northern Mindanao 2.1 Infrastructures Logistics Conditions 2.1.1 Spatial Character of Northern Mindanao 09 06 07 07 08 08 08 08 01 01 02 03 03 03 04 04 05 05 05 06

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Shipping Costs and Competitiveness In Northern Mindanao

A. Corridor 1. Eastern Misamis Oriental B. Corridor 2. Western Misamis Oriental C. Corridor 3. Eastern Bukidnon D. Corridor 4. Western Bukidnon 2.1.2 Freight Corridor and Port Access A. Corridor 2 and 4.CDO Port & MCT Road Access B. Licoan Intersection (J. Pacana St.) C. Osmeña Street Extension D. Agora Road 2.1.3 Ports and Port Facilities A. Port of Cagayan de Oro B. Mindanao Container Terminal 2.2 Exports and Imports of Key Commodities 2.2.1 Movement of Commodities A. Corridor 1. Eastern Misamis Oriental B. Corridor 2. Western Misamis Oriental C. Eastern Bukidnon D. Western Bukidnon 2.2.2 Export and Import Volumes 2.3 Logistics Players in Northern Mindanao A. Exporters (Shippers) B. Truckers C. Imports and Importers D. Shipping Lines E. Cargo handling Operators 2.4 Logistics Costs/Charges for Exports and Imports

10 11 11 13

14 15 15 17 18 18 20 21 21 21 22 23 23 24 29 29 29 29 30 31 31

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Shipping Costs and Competitiveness In Northern Mindanao

4. Legislation is Necessary C.1 Trucking and Hauling Rates 2.4.4.3 Port Charges 2.3.2 Profile of Survey Respondents 3.2 Cagayan de Oro Port 4.4.2 Brokerage and Facilitation Charges 2.3.3.4 Shipping Lines Survey 4 Issues and Measures 4. Findings B. Logistics Survey for Northern Mindanao 3.5 Domestic Sea Freight 31 33 34 35 38 38 39 40 40 44 46 48 51 51 51 51 52 54 55 55 55 56 56 56 57 58 4 Shipping Costs and Competitiveness In Northern Mindanao .2.3.1 Terminal Handling Charge and Other Surcharges A.3 Results from the Survey 3.4.3 Transshipment 4.2 Importers Survey 3.4 Sample Logistics Cost of Exporters 3. Other Shipping Surcharges 4.1 Shippers Survey 3.2.4.1 Breakdown of Port Related Transport Costs 4.4 Port Operational Issues 4.1.1 On the World Bank Report 4.1 Survey Implementation 3.3 Truckers Survey 3.2 Costs and Charges for Shipping 4.4.3 Vessel Dues 4.1 Mindanao Container Terminal 4.

1 Empty Backhaul 4. Clearance and Inspection Costs 4.2 Trucking Industry 5.6.4.1 International Shipping and Port Security Code 5.2 Inspection Areas for Imported Items 5.6.7 Harmony of Policies and Programs 4.2.10 Freight Equalization Scheme 4.1 RORO 4.7.9 Value Added Tax 4.3 Customs Clearing 5.4.2 24 Hour Delivery Service Provision 5.1 Value Added Service Provider (VASP) 5.8 Securities.3 DPWH Weigh Bridges 4.3 Labor Unions 5.5.1 Exports and Exporters 5.4 Vessel Tracking System 59 64 64 64 65 66 66 66 68 68 69 69 70 70 70 70 70 70 70 70 71 71 71 71 71 72 5 Shipping Costs and Competitiveness In Northern Mindanao .4.1 One Stop Processing Centers 5.3.2 Vessel Operations Commitments 5.4 Port Management 5.1.2.3.6 Trucking 4.1 DPWH-PPA Cargo Weight Policies 4.2 DOTC-LTO Fines/Penalties 4.1 Water Brakes 5.5.6.4.4.11 Timely Policy Dissemination 5 Best Practices of Logistics Players 5.2 Freight Quotations and Rates 4.

5 Corridor 4 Commodity Flow Table 2.7 Volume of Exports by Commodity Table 2.2 PhilExport 10A 72 72 73 73 73 73 74 74 74 74 74 75 75 75 List of Tables Table 2.1 NORMINSA 6.4 Corridor 3 Commodity Flow Table 2.6 Port Management Advisory Council (PMAC) 6 Way Forward 6.10 Top Import Commodities for Northern Mindanao.8 Comparative container traffic for both ports in TEU Table 2. PPA Table 2.2 Corridor 1 Commodity Flow Table 2.2.3 Maintaining Free Inspection Areas 6.4 Wharfage Discounts 6.9 Value of Exports Table 2.5 Business Support Organizations 6.2.5.2.2 Replicable Best Practices 6.3 Corridor 2 Commodity Flow Table 2.4 Logistics Training 6.5.6 Comparative Shipping and Cargo Traffic.1 Some Difficult Road Sections by Corridor Table 2.2 BOC’s VASP 6.4.1 Institutional Coordination 6.3 Information Drive 6. 2009 13 21 22 23 24 25 25 26 27 28 6 Shipping Costs and Competitiveness In Northern Mindanao .4.1 One Stop Centers 6.5 Port Revenues 5.5.2.

11 Evaluation and Experiences of Selected Export Processes Table 3.22 Exporting a 40’ Refrigerated Van Table 2.13 Foreign Shipping Lines operating in Northern Mindanao Table 2.5 Outsourcing of Trucking Logistics by Shippers Table 3.12 Importers for 2009 Table 2.17 Brokerage and Facilitation of Containerized Cargo Table 2.16 Shipping Lines Trucking Rates for Containerized Cargo Table 2.11 Northern Mindanao’s Exporters Table 2.1 Survey Sampling Table 3.13 Freight Costs by Commodity of Exporters 29 30 30 30 31 32 33 33 34 34 35 36 37 38 39 40 40 41 41 41 42 42 42 43 43 43 7 Shipping Costs and Competitiveness In Northern Mindanao .6 Trucking Share to Total Logistics Cost of Shippers Table 3.8 Evaluation of Quality of Infrastructure by Shippers Table 3.14 Transshipment Cargo from Northern Mindanao Table 2.2 Profile of Exporters and Importers Respondents Table 3.18 Export and Import Processing Charges by Agency Table 2.3 Profile of Trucker Respondents Table 3.Table 2.21 Exporting Lumber through 40’ Dry Van Table 2.9 Ranked Logistics Cost by Shippers Table 3.20 Arrastre and Stevedoring Charges at MCT and CDO Ports Table 2. Ports Table 2.23 Transshipment Cost Components Table 3.12 Perceived Evolution of Logistical Components by Shippers Table 3.10 Logistics Issues from Shippers Table 3.19 Comparative Arrastre Rates of Selected Phil.15 Spot Market Trucking Rates for Containerized Cargo Table 2.4 Profile of Shipping Lines Respondents Table 3.7 Shipping Share to Total Logistics Cost of Shippers Table 3.

1 Comparative Breakdown of transport costs per TEU Table 4.7 Motorela 02 11 12 12 14 14 15 16 8 Shipping Costs and Competitiveness In Northern Mindanao .Table 3.1 Carmen Hill Section Figure 2.21 Identified Problems at Port by Truckers Table 3.6 Osmeña Extension to the CDO Port Figure 2.22 Ranked Operational Expenses of Trucking Firms Table 3.20 Recommended Solutions for Road Improvements Table 3.2: Section of the Highway along Mangima Canyon Figure 2.19 Assessed Road Conditions by Truckers Table 3.3: Hazardous Road Section: Mangima Canyon Figure 2.26 Ranked Port Charges by Shipping Lines Table 4.18 Actual Logistics Costs Incurred by Importers Table 3.5: Difficult road sections leading to ports from Corridor 2 Figure 2.16 Good Practices to Improve Importation Process Table 3.2 Cargo Handling activity & applicability of THC Table 4.14 Assessed Port Charges by Importers Table 3.15 Identified Difficult Import Procedures by Importers Table 3.17 Ranked Importation Costs Table 3.25 Shipping Lines’ Port Operation Conditions Table 3.1 Study Area Figure 2.4 Puerto-Bukidnon junction going to Carmen Hill Figure 1.23 Cargo Tariffs Table 3.24 Rate Port and Freight Conditions by Shipping Lines Table 3.3 THC Rates 44 45 45 46 46 47 47 48 48 49 49 50 50 51 52 53 List of Figures Figure 1.

1: Maersk Line THC Table Annex 4.1 Shippers Survey Form Annex 3.4 Workflow for CHA-RO (RORO/PAX) Figure 4.2 Importers and Cargo Forwarders Survey Form Annex 3.2 Balingoan-Benoni RORO Vessel. Wing Vans ideal for RORO 59 Figure 4.Figure 2. locally known as Trisikad Figure 2.3 Container Vans unloaded from a RORO/Pax Vessel Figure 4.4 Shipping Lines Survey Form Annex 4.12 Export Volumes by Commodity.5 Trailer Horse Figure 4.6 Motorcab Figure 4.11 The Mindanao Container Terminal (MCT) Figure 2. 2009 Figure 4.8 Pedicab.7 MCT Weighbridges 60 61 63 66 67 List of Annexes Annex 1.1 Presentation of Study Results to Relevant Stakeholders Annex 1.2 Highlights of the Validation Meetings Annex 3.3 Truckers Survey Form Annex 3.10 Vehicular Traffic at CDO Port Southern Gate Figure 2.1 PPA reported CDO Port's Annual BOR was beyond 65% in 2009 16 18 19 20 27 57 Figure 4.9 The Cagayan de Oro Base Port Figure 2.2 LTO Fines and Penalties Glossary of Terms and Abbreviations Acknowledgements The Study Team 9 Shipping Costs and Competitiveness In Northern Mindanao .

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. the brunt of the problem still lay on a disproportionate government spending in infrastructure particularly in ports. 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. Showcase the best practices on the different segments on the logistics chain. fertilizer and rice are Mindanao’s main imports. c.2 Objectives From the private sector’s point of view. thus. Mindanao shippers for decades have complained of high domestic and foreign freight rates and surcharges. Access to agricultural production areas is constrained by poor road infrastructure leading to large postharvest losses. shipping. . So as not to duplicate past transport and logistics studies. 1. There had been numerous studies undertaken and designed to alleviate Mindanao’s logistics woes funded by both national entities and international donor agencies. aimed at reducing costs and maximizing efficiency. This has been a bane for Mindanao shippers as fewer international carriers call Mindanao ports and domestic transshipment is too expensive as an option. As far as the private sector (in Northern Mindanao) is concerned. as follows: a. Raw materials. 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). b. Provide recommendations leading to policy changes in ports. Identify present and pressing transport-related issues detrimental to Northern Mindanao’s competitiveness of selected export and import commodities. road use and infrastructure at all levels of government. being Northern Mindanao’s most strategically located gateways. The study objectives are.1. 1. farm to market roads and highways favoring other areas in the Philippines.1 INTRODUCTION 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.

Misamis Oriental) to include Iligan. Bukidnon Areas along the Cagayan de Oro-Talakag Road including the town of Baungon. Northern Mindanao Legend: Corridor 1: Eastern Misamis Oriental (green) Corridor 2: Western Misamis Oriental (blue) Corridor 3: Eastern Bukidnon (orange) Corridor 4: Western Bukidnon (violet) Areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR)1 East of Cagayan de Oro (Tagoloan to Magsaysay. Figure 2. Camiguin. However. Figure 1. Lanao del Norte and Misamis Occidental as well as the cities of Cagayan de Oro (CDO). Lanao del Norte & Misamis Occidental Areas along the Sayre Highway from Cagayan de Oro to Quezon.3 Study Area Northern Mindanao consists of the provinces of Misamis Oriental. Valencia.1. Bukidnon. Bukidnon 1 Formerly known as the Iligan-Cagayan de Oro – Butuan Road (ICBR) per DPWH update 2 Shipping Costs and Competitiveness In Northern Mindanao . Iligan Ozamis and Oroquieta. Misamis Oriental) going to Butuan City Areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR). which is divided into four corridors for a more localized view of the logistics conditions and issues. focus will be on areas which contribute significant freight volume to the ports of Cagayan de Oro (Macabalan) and Mindanao Container Terminal (MCT). West of Cagayan de Oro (Opol to Lugait.1 shows the spatial coverage of the study.1 Study Area. Malaybalay. Gingoog.

Misamis Oriental. Likewise. 3 Shipping Costs and Competitiveness In Northern Mindanao . November 2007 This study highlights the need for a more efficient Roll-on roll-off (RORO) system for the country.4 Review of Relevant Studies The Government of the Philippines. The study not only refreshes the information on local logistics conditions but also gives focus on the various transport modes such trucking. The study encourages institutionalizing SRNH by establishing an SNRH project management office. The study also encourages the need for a sustainable procurement of RORO capable ships. Relevant studies are as follows: 1. Relevant regulatory costs that impacts on the competitiveness of export commodities from Northern Mindanao is also tackled. 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.2 RORO for Mobility Enhancement.1 Master Plan Study for Cagayan de Oro . transportation and logistics in Mindanao. This mechanism will not just oversee existing developments but also future developments on RRTS.4. Balingoan-Camiguin-Bohol). as the principal entity. the Cagayan de Oro 3rd Bridge and By-pass road crossing the Cagayan and Iponan Rivers to Opol.Iligan Corridor Special Development Project. Likewise. through periodic surveys to update the program’s development. linking the existing RORO systems already in place in Northern Mindanao (e. Most of the major infrastructure projects identified in this study are currently either in place or in the pipeline. 1.4.g. The study recommends institutional strengthening and development of the Roll OnRoll Off Transport System (RRTS) by authorizing eight Strong Republic Nautical Highways (SRNH) as a National Project. major road development projects were also proposed. There have been a number of studies for the improvement of the infrastructure. upgrading of existing seaports and the establishment of the Mindanao Container Terminal (MCT) are among the key infrastructures identified for development. 1992 The Laguindingan Airport Development Project (LADP). has conducted several transport studies in the past funded by various donor agencies. ports and shipping. CDO-Cebu. 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.1.

Several road and bridge projects were initially identified for development or improvement by the respective Local Government Units (LGUs) and DPWH. fire fighting). The study recommends installing additional equipment at the CDO Port. establishment of additional 500-meter berth and support facilities for bulk cargo and improvement of RORO facilities. 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. Northern Mindanao was identified as high priority for immediate and long term development.4 Metro Cagayan de Oro Road Network Development Master Plan. first aid. Opol. In Northern Mindanao. introduce lease contract with terminal operator with fixed and variable tariff. Further. Most.4. CDO Western Coastal Road (from Kauswagan. as well as close circuit television (CCTV) system for security. transshipment of some export container cargoes is expected via Manila or Cebu through the RORO system. Cagayan de Oro City. However.g. 1. mainly a Quay crane. 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.3 Master Plan for Strategic Ports in the Philippines. 2004 This is a detailed study of Cagayan de Oro’s road network including those of the city’s neighboring towns. the study recommends that PPA to amend its port tariff from GRT/day to meter/hour basis. improved port procedures had obvious positive results and in 2009 and PPA invested on emergency response equipment (e. Cagayan de Oro City to Igpit. 2. 4 Shipping Costs and Competitiveness In Northern Mindanao . 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. only four (4) projects were found to be feasible by the study namely: 1. introduce the Port EDI System/Single Window System and improve port security measures. The Quay crane was installed and commissioned in early 2005. 1. simplify port procedures. The JR Borja Extension Road connecting the Central business district mainly Cogon Market to BCIR in Gusa.This study includes a plan to establish a RORO terminal for international cargo in the port of Cebu. if not all. 250-meters of the proposed 500-meter additional berth is already established in 2009 with back-up facilities including depot for liquid bulk (molasses).4.

It recommended policy reforms such as rationalizing PPA’s role as regulator and manager of public ports. and campaign against corrupt practices on the road.4. November 2002 The study provided a detailed supply chain analyses for key agricultural commodities from Northern Mindanao. resolution of port labor issues leading to port privatization. CDO West Diversion Road connecting Masterson Avenue (near SM City CDO) and the ICBR in Barangay Bulua. lifting of the cabotage law. 1.4. in light of the 2006 World Bank-IFC “Cost of Doing Business” Report. Cagayan de Oro through Barangay Canitoan. The study also reviewed the deregulation policies in the shipping sub sector. Proposed CDO 7th Bridge and approaches between the Gov. Exporters Confederation (PHILEXPORT). deregulation of domestic shipping and shipping rates. Vietnam and Indonesia. The study also proposed for the passage of the Omnibus Maritime Code. 1. 5 Shipping Costs and Competitiveness In Northern Mindanao .3. Ysalina Bridge (at Carmen) and the Emmanuel Pelaez Bridge (CDO 3rd Bridge) in Barangay Taguanao. particularly on Cross-Border Trade where the Philippines was ranked highest in terms of cost in exporting compared to other ASEAN countries like Thailand. 4. All the recommendations of this study have already been implemented.7 Philippine Logistics Study. 1. the CDO Western Coastal Road which is currently being implemented is experiencing delays caused by right-of-way acquisition. The study aimed to validate the cost of exporting a container from the Philippines and Identify areas for possible cost reduction. Chamber of Commerce and Industry (PCCI) and the Phil.5 Domestic Shipping Development Project of the Philippines.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. 2004 This study highlights the feasibility of an efficient RORO system in the country. Further the study highlights the contestability of cargo handling services. revocation of Executive Order 59 (creation of a single entity from various stakeholders to manage cargo handling operations in public ports).4.

1 A review on government’s infrastructure initiatives: a. The study also reinforced government’s plans and programs for agriculture and farmto-market road development which will integrate. 3. The study however barely touched on the transport cost structure of Northern Mindanao’s exports and imports. coconut as food and vegetable oil.5 Study Methodology and Approach The study was conducted from December 2009 till April 2010. Establishment of RORO traffic for CDO/MCT and Batangas Port. The study provided a detailed description of Northern Mindanao’s shipping system.8 Mindanao Logistics Infrastructure Improvement Project August. 4. The following activities took place: 1.5. Expansion of MCT. 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 2526. these enumerated studies highlighted Northern Mindanao’s logistical problems and possible solutions. 2. especially export winners such as fresh fruits pineapple & banana. 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. Japan). Apart from other recommendations. and 5. Establishment of an agribusiness center (patterned after the Makubetsu Agricultural Coop in Hokkaido. the study highly recommends for additional official development assistance on the following: 1. 1. Additional market researches with focus on the cold chain to encourage more production of other crops such as vegetables.1. 6 Shipping Costs and Competitiveness In Northern Mindanao . and increase productivity and flow cargo. including promising commodities such as vegetables. On the whole. While the Medium Term Philippine Development Plan (MTPDP) is the best basis for government programs and initiatives. as well as the various supply chains of major agricultural commodities of Mindanao. Establishment of a “Container highway” leading to MCT and CDO Port. 2009.4. improve.

the Regional Development Council (RDC) and during other consultations by these respective agencies. Export data from the Bureau of Customs (BOC) and the Department of Trade and Industry (DTI) b. The target key players and participants were: a. which include: a. Shipping Lines . Socio-economic information from the Department of Trade and Industry and the National Economic and Development Authority 1.exporting PhilExport10A members and other exporters.PhilExport member service providers and members of the Cagayan de Oro Port Truckers’ Association as well as other independent truckers. Truckers .3 Conduct of surveys and interviews of industry key players and some government officials in the region. c. These policies are in the form of memo circulars. Import Data from the Bureau of Customs and the Philippine Ports Authority (PPA) c. enacted laws and implementing rules and regulations. d. b. The surveys were undertaken from February till end of March 2010. The team also secured other related policies during mutli-sectoral activities like the CIQS (CustomsImmigration-Quarantine and Security) Northern Mindanao Consultative Committee.b. department orders and the like.especially companies importing raw materials for export.2 Collection and review of information from past studies and official data from government agencies and local governments. Shippers . 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). 7 Shipping Costs and Competitiveness In Northern Mindanao .foreign shipping lines calling the ports of Cagayan de Oro (CDO) and Mindanao Container Terminal (MCT). Port Statistics from PPA offices and from the Philippine Veterans Investment Development Corporation (PHIVIDEC) Industrial Authority d.5. 1. domestic shipping lines and Non-Vessel Operating Common Carriers (NVOCCs). Cargo forwarders and importers .5. PhilExport-10A has also compiled policies issued over the years.

the cargo handling operator of CDO Port and the Mindanao International Container Terminal Services. Inc. Study results and recommendations are presented and validated during the stakeholders’ meeting on April 6.2. fax or email (as requested by the target respondents). 1.5 Data processing and analysis Data collection and processing were done as soon as each data was secured especially for survey sheets.1 and the presentation material is shown in Annex 1.5.4 Validation session and survey trials The survey questionnaires were drafted early January. Most of the survey sheets were hand delivered with priority given to PhilExport 10A members while the others were either sent through courier.6 Completion of actual logistics cost structures based on transport cost standards While the survey sheets provided questions on the cost components.e. 8 Shipping Costs and Competitiveness In Northern Mindanao . Inc. Others were apprehensive to respond.5.5. 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. the terminal operator of MCT. 1.7 Report writing This final activity documents all interpretation and findings of the study. fearful of compromising business positions. The attendance list of said meeting is attached as Annex 1. 1.5. 2010 which provided feedback in improving the survey mode and survey instrument. (MICTSI). OROPORT Cargohandling Services.. separate interviews with key respondent companies (either their managers or their import/export staff) were done to ensure that these data were secured. 1. 2010. A trial survey was conducted on January 14.

clear mountain springs and waterfalls and rustic old world charm. poultry and dairy are also produced in large quantities in the province supplying the needs of neighboring provinces and cities. Malaybalay.846. Valencia. 11 Congressional districts.2 LOGISTICS CONDITIONS IN NORTHERN MINDANAO 2. Lanao del Norte and Misamis Occidental in the west. Misamis Occidental. the cities of Cagayan de Oro. while in urban areas. Iligan. Oroquieta.1 Infrastructure Logistics Conditions 2. Population density in the rural areas is 1. Misamis Oriental is also an industrial hub of the region. It is home to the regional capital. wetlands.4%. The total area of the region is 2.685. Lanao del Norte is the newest province added to the Northern Mindanao region. rice. a place of natural beauty. The island of Camiguin is a place of unspoiled beauty. coffee. 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. vegetables crops. Gingoog. first class hotels and variety of agri-based and other manufacturing industries.193. a total of 85 municipalities.018. Cagayan de Oro hosting a regional airport. on the South by Lanao del Sur and North Cotabato.1. Ozamis. DA-RFU 10 9 Shipping Costs and Competitiveness In Northern Mindanao .020 barangays. and 2. Camiguin is the perfect place for tourism adventures.579 with an average annual growth rate of 2. The region consists of five provinces composed of the landlocked province of Bukidnon in the south. It is the base for most of the region’s aquaculture industries. It is the region's food basket and primary supplier of raw materials for processing in the various agri-industrial centers of the region. Bukidnon has vast agricultural resources which are highly suitable for most types of crops like corn. the island of Camiguin in the northeast. on the West by Zamboanga provinces. and Tangub. white sandy beaches. it is 4. and on the East by Agusan Provinces and Davao. unspoiled forests and rich fertile soils. The province used to belong to the Central Mindanao region. Misamis Oriental in the north. shrimp and squid spawning grounds in the Philippines.617 hectares with a population of about 4. The province is traversed by several rivers. Moreover.05 per square kilometer.37 per square kilometer. DTI-10. international seaports. 2 Northern Mindanao Socio Economic Profiles from NEDA-10. fruits and other commercial crops such as abaca. It is one of three major prawn. rubber and sugarcane.1 Spatial Character of Northern Mindanao2 Northern Mindanao is bounded on the North by Bohol Sea. livestock.

Lanao del Norte & Misamis Occidental Areas along the Sayre Highway from Cagayan de Oro to : Quezon. rolling hills. Laden cargo trucks take approximately five hours to bring cargoes from Butuan to Cagayan de Oro Port or to MCT. through Davao del Norte to Davao City. the region enjoys distinct advantages over other areas in the country. hosting 29 manufacturing companies and 62 service firms. Agusan del Norte. Misamis Oriental) going to Butuan City Areas along the Iligan-Cagayan de Oro – Butuan Road (ICBR) West of Cagayan de Oro (Opol to Lugait. Misamis Oriental) to include Iligan. The corridors are as follows: Areas along the Butuan -Cagayan de Oro – Iligan Road (BICR)3 East of Cagayan de Oro (Tagoloan to Magsaysay. municipalities. Agusan del Sur. It is located outside the typhoon belt and enjoys a climate that is favorable to agriculture and industrial activities. It has fertile soil. linking this resource-rich island to the rest of the country and the world via its relatively modern seaport. The two-lane coastal highway is also the major artery that connects Cagayan de Oro City to the agricultural provinces of Surigao del Norte.Physically. The region serves as the gateway to and from the rest of Mindanao. 3 Formerly known as Iligan – Cagayan de Oro – Butuan Road (ICBR) 10 Shipping Costs and Competitiveness In Northern Mindanao . road network. Surigao del Sur. The study area is grouped into four corridors based on the locations of the cities. The highway stretches 170 kilometers to Butuan City and is in fairly good condition with periodic maintenance by DPWH. and an extensive arterial road network. and industries for a better grasp of its spatial and transport attributes. abundant minerals and forest and aquaculture resources. Bukidnon Areas along the Cagayan de Oro-Talakag Road including the towns of Baungon. mountains. 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. It is geologically a combination of plains. airports. and coastal areas. Bukidnon Corridor 1: Eastern Misamis Oriental Corridor 2: Western Misamis Oriental Corridor 3:Eastern Bukidnon Corridor 4: Western Bukidnon A.

Along this very important stretch of national road is the soon to be operational Laguindingan International Airport. vehicles are reduced to a crawl of approximately five kilometers per hour.2. The peak hour traffic volume at this section was around 500 vehicles per hour. 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. Pagadian and Zamboanga. As vehicles Figure 2. Bukidnon momentum due to congestion. Cagayan de Oro & Ala-e. This is a “no passing” section but faster vehicles will always try to overtake laden trucks which poses danger to motorists. North Cotabato passing through the province of Bukidnon. 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. A short section has been recently rehabilitated but was not widened. cannot gain Manolo Fortich. between Puerto. Mangima section and Damay pass. The Sayre Highway though paved predominantly by asphalt traverses sections with deep ravines and cliffs such as the Manolo Fortich Section. winding and steep. improving and protecting this road section is of vital importance as the airport’s international status is expected to attract cargo traffic. Cagayan de Oro City to Kabacan. 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. Accidents involving hauling trucks carrying various Bukidnon products are common occurrences along this stretch of national road.B.1 and 2. C. this road probably carries the heaviest cargo loads comprising of steel. Ozamis. Carmen Hill section is a narrow two lane road. Corridor 3: Eastern Bukidnon Sayre Highway is the portion of the Philippine national highway that starts from Puerto.1 Carmen Hill Section. cement and wood products. Though current airfreight export volume contribution is negligible. Dipolog. Corridor 2: Western Misamis Oriental This coastal highway connects Cagayan de Oro City to the cities of Iligan. The hazardous road sections are shown in Figures 2. 11 Shipping Costs and Competitiveness In Northern Mindanao .

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. Figure 2.2: Section of the Highway along Mangima Canyon 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 2.3: Hazardous Road Section: Mangima Canyon

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Shipping Costs and Competitiveness In Northern Mindanao

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.

13
Shipping Costs and Competitiveness In Northern Mindanao

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 Figure 2.4 Unsignalled Puerto-Bukidnon junction 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

14
Shipping Costs and Competitiveness In Northern Mindanao

Pacana Street from the west turning left after crossing the Marcos bridge. 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. 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. C. The road is a 16 meter concrete with asphalt overlay and has been recently rehabilitated up to the corner of Gaabucayan street. B. Pacana Street) Cagayan de Oro Port is currently accessed by J. Traffic flow from the highway is smooth unless a gridlock occurs at the un-signaled J. Near the port access. The approach from the highway is by a sharp right turn. Pacana-Gaabucayan intersection. 15 Shipping Costs and Competitiveness In Northern Mindanao . jeepneys. trucks. When the access road leading to the 4th bridge connecting Puntod and Kauswagan is completed. taxis and buses. Even after the opening of 4th bridge. the contribution of trucks to congestion can be greater than their share of traffic. Intermittent effort by local traffic management officials has not eradicated trisikads from using this road and illegal parking by cargo trucks and trailers. port related traffic to/from the west can utilize this route and relieve Marcos bridge from some of its excess traffic volume. Osmeña Street Extension Osmeña Street Extension is the second most important access road to the port from the east turning right from IliganCDO-Butuan Road. Licoan Intersection (J. and adjacent section of road networks at both side of river bank will be still suffering serious traffic problem. The left lane vehicles are always in danger of being crushed. Marcos Bridge will be remaining as a bottleneck of the City. This section is four lane concrete road with narrow shoulders. mainly private cars. motorela. 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.The roads are shared by several road users. 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. As trucks and buses occupy more road space than cars.

thus impeding traffic flow. motorelas and debris occupy part of the road and most of 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. This is also used by motorelas and trisikads (pedicabs).The left lane is oftentimes occupied by passenger jeeps loading and unloading passengers leading to the intersection. 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. These impede traffic flow with forklifts using the road to load and unload cement. Coca Cola have not provided parking for these delivery trucks. 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. and illegal structures. illegal parked trucks. 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. locally known Motorelas and trisikads are also allowed on this road. plywood and steel bars. as Trisikad 16 Shipping Costs and Competitiveness In Northern Mindanao . However. The opposing two lanes is also tight as unserviceable vehicles. Cargo trucks will then turn right from Osmeña street extension to Gaabucayan street before turning right to Corrales street extension leading to the port. Figure 2. Along Gaabucayan Street are structures that impede traffic flow such as a vulcanizing shop. 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. At times. a car repair shop that occupied the sidewalks and a store constructed on the sidewalk. 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. After turning from the highway.7: Motorela Some other obstructions include a barangay outpost. Figure 2. This intersection is un-signaled and can often result in gridlocks. appropriation by some businesses of the sidewalks.8 Pedicab. 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.

etc. However. This has not been made feasible as Agora road has turned into a free for all section. trisikads sharing road space with passenger bus that calls Agora as its primary eastbound terminal. Agora Road The most strategic and most preferred route from the east is the Agora road turning right from the Butuan-CDO road. sidewalk vendors. PPA has opened the port’s main gate for the entry of cargo trucks. The four lane section with a median divider has been turned to a one lane affair due to illegal parking and illegal structures. illegal structures.D. This is aside from trucks unloading agricultural produce. For its credit. 17 Shipping Costs and Competitiveness In Northern Mindanao . vegetable stalls. vulcanizing shops. corn. used clothing stalls. has congested the road that truckers have shunned using it. Non containerized trucks such as those carrying rice. trucks that needs to be weighed needs to go through Agora gate for weighing. 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. Illegal parking.9). sugar are also facing risks of pilferage when using this road. The port’s southern gate is its most important entry point (see Figure 2.

1.500 square meters of reclaimed back-up area is being planned for implementation this year). (v) 43 units of 3ton forklifts. (ii) 2 units of 45-ton reach stackers. It is also capable of handling containerized. general and break bulk cargoes. The port is also equipped.200 linear meters and over 23 hectares of back up area and container yards (a 50 meter wharf extension and 4. A. 18 Shipping Costs and Competitiveness In Northern Mindanao . Figure 2. as part of its cargo handling fleet.9: The Cagayan de Oro Base Port The Cagayan de Oro port has an annual potential capacity of at least 300. (iv) 7 units 25-ton forklifts. Mindanao’s traditional gateway is a multi-purpose port catering to domestic as well as import/export cargoes. liquid bulk and break bulk cargoes. In 2008. and (vi) 14 units 1.5-ton electric forklifts. Port of Cagayan De Oro The port of Cagayan de Oro is the biggest port in Mindanao with a total berth length of 1. CDO Port cargo handling operator established a cold storage facility with a capacity of 100. etc.3 Ports and Port Facilities Northern Mindanao boasts of two modern international port facilities with a combined potential capacity of 500. passenger and RORO vessels.000 TEUs of containerized cargo and at least four million tons of general. A brief description of both these commercial ports is given below. (iii) 2 units 45-ton toplifts. liquid bulk.2.000 TEUs of containerized cargoes. bulk. the following: (i) 1 unit of ship to shore gantry crane.000 boxes of fresh banana and pineapple for export markets exclusively used by Del Monte Fresh International. bulk.

10 Vehicular Traffic at CDO Port Southern Gate 19 Shipping Costs and Competitiveness In Northern Mindanao .ORORAMA Metro Bank ACTUAL VEHICULAR FLOW I s l a n d Island Okay-okay Area Okay-Okay Area Agora Market Terminal (Underutilized Road) Proposed Okay-okay Bus Area Bus Terminal i s l a n d Fish Landing (Busy only in early morning) Island To Gaabucayan Road I s l a n d PPA Agora Gate Vehicular Flow Figure 2.

4-hectare container yard. It can accommodate container vessels up to 30. 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. catalyzing Northern Mindanao's role as domestic food basket and agri-industrial exporter.. (ICTSI). The MCT has been identified as a Mindanao flagship project. Port facilities include 2 quayside gantry cranes and four rubber-tired gantry cranes and 262 reefer outlets.B. Tagoloan.11: The Mindanao Container Terminal (MCT) containerized and semi-containerized domestic and foreign vessels with an annual capacity of 270. Mindanao Container Terminal The Mindanao Container Terminal (MCT) at the PHIVIDEC Industrial Estate. The berth length of the port measures 300 meters and 13 meter draft. The port was privatized in 2008 and is now operated as a subsidiary of the International Container Terminal Services. 20 Shipping Costs and Competitiveness In Northern Mindanao .000 DWT. Misamis Oriental was originally conceptualized to maximize Northern Mindanao's potential as the Philippines' southern gateway. It has been designed to be exclusively operated for fullyFigure 2. one of the key infrastructure envisioned to jump start the island's economic potential.000 twenty equivalent units (TEUs) with a 9. Inc.

raw rubber Minerals Source: Compiled from DTI. It is also the major link to other raw material sources from Camiguin Island and CARAGA such as wood and mineral ore.2 gives the origin and destination of export and import commodities.2 Corridor 1 Commodity Flow In-bound Raw Material Fertilizers Grains Fresh Coconut Copra Crude coconut oil Fresh fruit Milk powder Aquamarine products Resins Steel products Petrochemicals Industrial products Agricultural Products Packaging materials Iron ore Silica Lime Source Imported from other countries Imported & other areas in Mindanao via Corridor 3 Local and some from other areas of Mindanao Local and some from other areas of Mindanao Corridor 2 and other areas of Mindanao Corridor 2 and other areas of Mindanao Imported from other countries Corridor 2 Imported from other countries Imported from other countries and from Corridor 2 Imported from other countries Imported from other countries Imported from other countries Imported from other countries Corridor 3 Other areas in Mindanao Main Markets World-wide Japan World-wide World-wide World-wide Japan and Europe Asia USA & Europe China China & USA Europe & Asia Forest Products – Logs Industrial Out-bound Commodity Coconut: Desiccated. PhilExport and BOC data. Table 2. Lagonglong. Table 2. metal scraps ResourceBased GTH: Handmade paper Minerals Wood: Lumber & furniture components Others: Pineapple & Sugarcane by-products. Medina. fiber & coconut oil Industrial: Sintered ore. Binuangan. silicon metals. 2009. going to Butuan City in the CARAGA Region.2. Fiber-reinforced plastics.1 Movement of Commodities The flow of commodities by type is segregated by corridor as described below. raw sugar Coconut: Oleo chemicals. activated carbon Food Iron & Steel: Tin cans. Villanueva. frozen chunks. A. Corridor 1: Eastern Misamis Oriental These are coastal areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR) East of Cagayan de Oro.2. coconut cream. covering the towns of Tagoloan. charcoal. Sugbongcogon. Talisayan. Kinoguitan. It is one of the region’s largest coconut producing areas with the presence of small to large coconut-based industries. Balingasag. 21 Shipping Costs and Competitiveness In Northern Mindanao . Magsaysay and Gingoog City in Misamis Oriental. Balingoan.2 Exports and Imports of Key Commodities 2. coco sugar Aquamarine: Prawns Fresh fruit: pineapple & banana Processed: canned/dried/cooked fruit. Salay. finished rubber. Jasaan.

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. Kauswagan. the area also has its share of perennial heavy rainfall during the wet season. Naawan. Kolambugan. Corridor 2: Western Misamis Oriental These are areas along the Butuan-Cagayan de Oro-Iligan Road (BCIR) West of Cagayan de Oro. Europe & Japan China China & USA Europe & Asia Forest Products . Bacolod. Lala and Kapatagan. Initao.Logs Other areas in Mindanao Out-bound Commodity Coconut: Coconut vinegar Aquamarine: Prawns Processed: Banana chips Food Industrial Coconut: Charcoal. Gitagum. El Salvador.3 Corridor 2 Commodity Flow In-bound Raw Material Fertilizers Grains (and wheat) Fresh Coconut Copra Tapioca Starch Agricultural Products Steel products Petrochemicals Clinker Packaging materials Industrial Products Source Imported from other countries Imported from other countries & other areas in Mindanao Local and from other areas in Mindanao Local and from other areas in Mindanao Corridor 3 & 4 and other countries Imported from other countries Imported from other countries Imported from other countries Imported from other countries Main Markets USA Japan World-wide World-wide Japan and Europe Asia USA. Maigo. Iligan City and the coastal areas of Lanao del Norte namely: Linamon. destroying some bridges along the BICR. wooden toys ResourceBased Source: Compiled from DTI. metal scraps Minerals: copper and chromite ore Wood: Lumber Others: Abaca pulp. rubber cup lumps GTH: Handmade paper. 22 Shipping Costs and Competitiveness In Northern Mindanao . 2009.B. PhilExport and BOC data. Alubijid. It covers the towns of Opol. fiber & coconut oil Industrial: Cement Iron & Steel: hot rolled coils. cold rolled coils. Tubod. Table 2. especially along the Lanao del Norte Stretch and flooding between the El Salvador and Alubijid in Misamis Oriental. Similar to Corridor 1. Manticao and Lugait in Misamis Oriental. Libertad. Laguindingan. Iligan is considered the industrial city of the south as it is home to 17 large manufacturing companies.

Europe & Japan Food Cut flowers (via air) Resourcebased Mineral: Copper ore Wood: Lumber Others: rubber cup lumps. Impasug-ong. Bukidnon.4 Corridor 3 Commodity Flow In-bound Raw Material Agricultural Products Fertilizers Grains Feeds Source Imported from other countries Imported from other countries & other areas in Mindanao Imported from other countries & other areas in Mindanao Industrial -Packaging materials Imported from other countries Resource-based . however. Bukidnon is known as the food basket of Northern Mindanao. including the cities of Malaybalay and Valencia. 2009. pineapple & sugarcane by-products Source: Compiled from DTI. Major roads are all-weather concrete paved but most of the farm to market roads are either. Corridor 4: Western Bukidnon These are areas along the Cagayan de Oro-Talakag Road. Asia China China & USA Europe & Asia D. because of the terrain. irrigated areas are limited. Table 2. affecting agricultural production despite technologies and techniques applied on ground. Irrigation facilities are in place with enough water supply for yearround agricultural production.Raw Rubber Local and from other areas in Mindanao Out-bound Commodity Main Markets Fresh fruit: Pineapples & Bananas World-wide Raw sugar Asia Processed: Frozen fruit Japan Industrial: rubber boots Japan and Europe GTH: handbags and home décor USA. the area is also perennially visited by heavy rainfall during the wet season. 23 Shipping Costs and Competitiveness In Northern Mindanao . particularly the hinterlands of Cagayan de Oro. Maramag and Quezon. Similar to Corridors 1 and 2. Bukidnon.C. vegetables and livestock are located along these areas. and the towns of Baungon and Talakag. This area has its share of irrigation. Large plantations and contract farms of fruit. yet to be developed or needs improvement. Corridor 3: Eastern Bukidnon Areas along the Sayre Highway from Cagayan de Oro to the towns of Manolo Fortich. PhilExport and BOC data.

For Northern Mindanao. the exports/imports through airports are negligible as only export samples are the usual commodities sent out. the Department of Trade and Industry and PhilExport’s One-stop Export Processing Center.2. 24 Shipping Costs and Competitiveness In Northern Mindanao . 2. 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.8). However. PhilExport and BOC data.6 and 2.2 Export and Import Volumes Ports and airports are the regular gateways for exports and imports.5 Corridor 4 Commodity Flow In-bound Raw Material Agricultural Products Fertilizers Grains Feeds Source Imported from other countries Imported from other countries & other areas in Mindanao Imported from other countries & other areas in Mindanao Imported from other countries Local and from other areas in Mindanao Main Markets World-wide USA China Industrial Products -Packaging materials Resource-based – Raw rubber Out-bound Commodity Food Fresh fruit: Bananas Processed: Frozen diced/chunk fruit Resource-based . The data on export and import volumes passing through the ports are reported by the Philippine Ports Authority based on ships’ manifests. 2009.Table 2.Mineral: Copper ore Source: Compiled from DTI. 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. PPA statistics are aggregated to broader categories as to import and export cargo by packing type rather than details on commodities. The PPA 2008 and 2009 statistics show a slightly lower volume than the study team’s data. As such.

780 18.050.698.8 3.610.130) (877) (253) (22.1 -19.11 137.777 5.620) (169.064) 1.888.403.686.830.664.455 3.533) (94.449) (2.24 69.654) (3.758.482 2.172 367 13.110.82 26.672.837.741 1.635.430) (1.Table 2.381 24.835) (3.385.306 10.090.06 231.924.156) (346.49 909.974.45 5.4 -13.43 134.557.526 140.00 23.050) (537.679.7 65.453 10.499.9 25 Shipping Costs and Competitiveness In Northern Mindanao .09 2008-2009 Variance (%) -31 25 -16 -29 -34 -10 13 10 -62 -89 -17 -51 10 -31 Ave.428 10.905.860 675.31 92.858.99 295.605.925) (20.751 60.457 12.6 12.30 322.695.020.003.T.6 121.027 13.255.01 163.039.174.770) (25.434 22.200.636 Inc (Dec) variance % (1.088.543 1.142 357 227.58 2.459) (45.075 3.40 2.359.427.64 212.860 116.87 2008 557.707.625 402 14.983.281.601) (392.24 233.830 26.6 Comparative Shipping and Cargo Traffic.62 6.334 836.140.22 52.255) (18.81 101.467 57.499 9.78 17.847.68 20.02 278.82 17.19 55.4 2.74 2.019 610 249.87 2.485 (3.95 63.80 119.97 333.11 2009 386.477 4.78 159.488) (1.812 227.08 456.52 148.176.821 13.172.293.525.371.460.557 208.192.13 2007 272. Total Cargo (m tons) Domestic Trade Inbound Outbound Foreign Trade Import Export C.01 5.19 254.407) (252.666. PPA Particulars A.55 16.126) (9.826.057.232.453) (35) (707.2 43942.503 10.1 3659.59 33.086 59.144.342. Shipping Traffic Number of Shipcalls Domestic Foreign Total G.511. 2008 and 2009 Table 2.393 14.348) (7.50 189.32 109.015.346.15 382.679.435.504.652 150.186.378 6.53 35.764.502.284) (3.25 8.5 13.7: Volume of Exports by Commodity (in Metric Tons)1 Sector Food Coconut (Food) Aquamarine Fresh Processed (including Sugar) Industrial Coconut (Industrial w Coco oil) Industrial Iron & Steel GTH Resource-based Minerals Wood Others 2006 236. Domestic Foreign Total Waiting Time Domestic Foreign Total Service Time Domestic Foreign B.98 34. Growth (%) 15.618 1.921 62.93 216.5 57.5 15.964.838.087 2008 14.061 1.403.712 2.998 9.R.42 187.51 352.088.49 412.629 10.208 123.96 14.83 12.905 1.905.78 29.393 769.226.09 322.136.936 4.047.549) -11% -11% -9% -5% -5% -5% -11% -9% -41% -9% -8% -16% -6% -1% -1% -1% -19% -12% -23% -6% -6% -6% -5% -8% 12% -26% Source: Philippine Ports Authority Statistics.07 53.16 27. Container Traffic (baseports) Domestic Inbound Outbound Foreign Import Export 2009 12.8 -2.539 12.

4% for the food sector.03 4.36 742.897.51 1. Inc were segregated since they have their own port facilities and 100% of their export pass through their respective ports in bulk.803 22.00 5. non dipterocarp types.930 2009 MCT 33.772 CDO 12.00 4. respectively.942 26..5 21. Coconut-based products posted 47% of total volume in the industrial sector and 5% of the food sector.085. industrial commodities accounts for 56% of total export volumes.134 8.137.053.2%. Sinter Corp. It should be noted that the wood products are of the commercially grown.95 555.115.16 3. an average of 21.000 metric tons of export cargo while the study team’s data shows a total of 1.45 725.295. Sinter Corp. On a four-year growth analysis.361.16 2008-2009 Variance (%) 263 -20 -28 -35 -27 Ave.481.79 2008 548. On the whole.613. 26 Shipping Costs and Competitiveness In Northern Mindanao .165 31.440.21 448.00 293.808 18. and wood posted positive growths of 2.796 20. While the overall cargo traffic has gone down compared to the previous year. Most of the resource-based products.284.000 metric tons.832.5 -10. 13.829 72.4 -16.1 Note: Volume of Phil. Figure 2.395.032. are exported to China and the USA.874. fresh and processed food products are exported worldwide. it is noted that that total FCL (full container load) traffic accounting to about 72.033 51.632 11. Total NM Exports 1 2006 317. posted a strong growth of 57% in the industry sector but a slight dip of -2.01 742.8: Comparative container traffic for both ports in TEU Container Traffic (FCL only) Import Export Total 2008 CDO 10. HOLCIM Phils.5.172 17.418. Table 2.618. Growth (%) 131.2 to 2.793. Source: Compiled by the Study Team based on records from BOC.771 TEUs has increased in 2009. Other top commodities such as processed food.032.78 2007 554.990.968 53.9 -6.5% yearly increase in volumes was realized between 2006 and 2009.771 For 2009.7 shows the shares of commodities to total export volumes for 2009.316. and HOLCIM Phils. on the other hand.060. This is followed by food products (fresh and processed) with 26% and by resource-based products with 18% of total exports. DTI and Philexport10A One-stop Export Documentation Center. Coconut.8% and 121.02 5.14 2009 1.90 6.88 1.76 909.104.435 MCT 14. iron and steel. PPA reports a total of 837.337 Total 24.841 Total 45.804 28.Sector Special Transactions Sub-total (Commercial Ports) Phil.497. which excludes the export volumes of large industries using their own ports.431.43 17.5%. The markets for these commodities are indicated in Table 2. The top commodity.319. coconut-based products.

42 0.1 Note: Values of Phil.7 Export Volumes by Commodity.5 44.9 Value of Exports (in Million US Dollars)1 Sector Food Coconut (Food) Aquamarine Fresh Processed (including Sugar) Industrial Coconut (Industrial w Coco oil) Industrial Iron & Steel GTH Resource-based Minerals Wood Others Special Transactions Sub-total (via Commercial Ports) Phil.92 542.7 139.0 56.0 5.21 21.0018 0.5 -3.43 116.7 -10.75 1.71 55.57 323.62 245.41 19. Inc were segregated since they have their own port facilities and 100% of their exports pass through their respective ports in bulk. HOLCIM Phils.73 5.49 1.83 1.38 10.77 389.5 5.13 3.45 204.57 18.77 90.15 26.92 2008 252.31 109.45 10.19 67. DTI & Philexport10A One-stop Export Documentation Center.72 Ave.9 -2.34 537.59 357.32 1.Table 2.7 5.02 526. Sinter Corp.20 33.92 9.50 830.47 288.86 63.50 21.92 133. 27 Shipping Costs and Competitiveness In Northern Mindanao . Source: Compiled by the Study Team based on records from BOC.0 -21.19 245. Total NM Exports 1 2006 135. Growth (%) 4.83 35.30 22.77 0.94 3.02 3..27 2009 161.2 24.44 1.00 24.42 478. 2009 Source: Compiled by the Study Team based on records from BOC.53 70.3 2. Sinter Corp.00 11.57 2007 149.38 10.57 125.97 844.1 160.91 4. Figure 2.73 19.46 23.5 -9. DTI and Philexport10A One-stop Export Documentation Center.60 62.87 12.95 45.67 257.30 463.43 20.41 94.81 1.69 0.61 1.8 -14.76 31.00 36.53 23.97 27.49 157.1 -3.13 921. and HOLCIM Phils.62 1.59 53.63 600.3 -4.78 39.71 56.

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 Minerals Foodstuffs Fertilizer Corn Chemicals Paper & paperboard thereof Spare Parts Footwear Petrochemical Products Forest Product Plastic/rubber & articles thereof Iron & Steel Products Live Animal Hardware Textiles & textiles articles Electrical Machinery Miscellaneous Items Maize Non-electrical machinery Motor Vehicle Articles of Iron Old stocks Others, raw hides, shin & leather Machine Parts Acc. Total Source: BOC CDO District Vol. (Kgs.) 147,164,493 97,735,684 40,488,025 27,717,124 21,422,033 9,900,250 6,645,759 5,172,683 3,400,000 3,042,084 2,173,291 2,035,912 1,924,510 1,894,254 1,827,945 1,738,983 1,112,478 1,000,000 831,119 380,721 57,208 16,250 6,100 3 377,686,909 Value (Php) 540,967,161.00 2,604,132,298.58 337,429,813.00 259,563,594.00 522,356,023.15 224,637,552.00 90,526,836.67 7,602,797.00 81,953,687.00 26,881,112.00 159,709,649.99 149,461,617.40 79,548,560.00 30,044,606.00 62,020,343.00 69,390,043.00 49,595,870.87 1,892,008.00 98,203,160.00 17,001,433.00 13,015,167.00 187,148.00 37,371.00 3,802.00 5,476,161,653.66

28
Shipping Costs and Competitiveness In Northern Mindanao

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 Food Coconut (Food) - desiccated, coco cream, frozen chunks, coco sugar Fresh - banana, pineapple Aquamarine – prawns Processed Sugar - tropical fruit, sugar Industrial Coconut - Oleo-chemicals, Coconut oil, Coco charcoal, Coco husks Industrial - construction materials, processed silica, activated carbon, finished rubber Iron & Steel - hot rolled coils, cold rolled coils, scrap metal GTH - gifts toys and house-ware Resource-based Minerals - copper ore, chromite ore Wood - lumber, furniture components Others - pineapple & sugarcane by-products, raw rubber, abaca pulp Special Transactions Total Source: DTI, BOC and PhilExport, 2009

2006 25 2 8 5 10 34 13 10 11 6 52 10 34 8 10 127

2007 31 2 7 12 10 33 13 11 9 6 79 30 35 14 11 160

2008 35 2 6 17 10 41 18 11 12 7 88 43 37 8 15 186

2009 41 3 6 22 10 44 22 13 9 6 70 22 32 16 13 174

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.

29
Shipping Costs and Competitiveness In Northern Mindanao

Table 2.12 Importers for 2009
Corridor 1 Exporters importing raw materials Importers for Domestic Consumption Total Source: BOC CDO District 27 140 167 Corridor 2 9 33 42 Corridor 3 6 1 7 Corridor 4 5 1 6 Total 47 175 222

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 American President Lines (APL) Maersk Lines Marianas Shipping Pacific Eagle Lines (PEL) Region Container Lines (RCL) China Shipping Orient Overseas Container Line Nippon Yusen Kaisha (NYK) Call Frequency Weekly Weekly Weekly Weekly Weekly Weekly Weekly Weekly Port(s) of Call CDO-Bugo-MCT MCT MCT MCT MCT Via Cebu Via MICT/Cebu 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 2006 2007 2008 2009 Vol. (MT) 80,695.14 98,406.33 134,868.35 123,101.51 Val. (USD Million) 54.72 37.39 27.08 20.95

Source: BOC, 2009

30
Shipping Costs and Competitiveness In Northern Mindanao

500 6.000 12. Prevailing spot market trucking rates are usually paid on cash.000 127 254 P43/km P62/km 35/km/unit Medina.000 16. a subsidiary of the International Container Terminal Services. – INPORT(1977)) has been providing cargo handling services at the port since 1999. overloading becomes a major issue.000 112 223 P37/km P62/km 31/km/unit Bukidnon (BUSCO) 11. radius El Salvador.000 Dist. Inc. OROPORT.000 18. model and type. Or. Mis. since its merger (between Continental Arrastre and Stevedoring Co. as its cargo handling service provider. trucking rates per container unit becomes cheaper. Mindanao Container Terminal is operated by the Mindanao International Container Terminal Services.1 Trucking and Hauling Rates The trucking fleet in Northern Mindanao is primarily composed of Japanese and American surplus trucks of various age.4 Logistics Costs/Charges for Exports and Imports 2. (Kms): 1-way 20 38 Back and forth 20 76 20 Footer P62/km P52/km 40 Footer P87/km P78/km Tandem (2x20) 50/km/unit 40/km/unit Source: Trucker interviews and rate canvass 8. Cargo Handling Operators Cagayan de Oro Port is managed by the Philippine Port Authority’s Port Management Office and contracted OROPORT Cargohandling Services. – CASCO (1986) and Gold City Integrated Port Services.E. The 10-wheeler semi truck with 40-foot trailers can load two units of 20-foot containers (tandem load).. With this system. however. Mis. Table 2. (Celebes Oil) 2.14 Northern Mindanao Spot Market Trucking Rates for Containerized Cargo -including empty positioning/empty return (in PhP) FCL 20 Footer 40 Footer Tandem (2x20) MCT to CDO w/n 20Km. Inc. 2.000 6.500 14.. which took over terminal operations in 2008. Inc. Inc. short term credit and/or short term credit with diesel cost paid in advance.000 14.000 4.000 3. 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. Or (Sanwa) Iligan City (Global Steel) 8.500 4.000 94 188 P42/km P63/km 35/km/unit 31 Shipping Costs and Competitiveness In Northern Mindanao . Inc.000 13.4. (MICTSI).

22 2.50 7.00 19.796.7 2.44 5.75 Balingasag 30 3.22 2.50 El Salvador 38 4.00 5.644.398.686.153.372.85 3.00 10.642.00 Iligan City 108 9.750.20 20.60 9.20 MCT to Eastern Misamis Oriental Villanueva 3.00 Lugait 93 8. Table 2.156.00 11.15 Shipping Lines Trucking Published Rates Containerized Cargo Door to Door Service (in PhP) Distance 20 Footer Dry (Kms) Non-VAT VAT-in MCT.20 Balingoan 76 6.398.325.44 5.90 14.686.00 Jasaan 15 2.578.85 Medina 94 8.00 Alubijid 45 4.00 Source: Philippine Liner Shipping Association (PLSA) Destination 40 Footer Dry Non-VAT VAT-in 4.20 20.00 5.710.155.70 17.00 Gitagum 56 5.914.651.542.55 Sugbongcogon 64 6.60 Magsaysay 112 10.35 Kinoguitan 72 6.90 7.00 Manticao 84 7.50 Initao 72 7.980.6 to 18 2.372.00 8.875.744.50 11.076.50 Libertad 62 6.30 Lagonglong 37 4.372.996.00 Laguindingan 50 5.991.322.686.018. This is shown in Table 2.063.325.40 13.877.00 12.00 4.00 14.10 Gingoog 102 10.40 5.829.152.00 9.218.00 Naawan 80 7.393.70 6.00 Carmen/Kauswagan/Bulua 20 to 25 2.076.223.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.796.990.659.00 15.669.489.284.95 Talisayan 80 7.00 15.531.957.787.992.00 32 Shipping Costs and Competitiveness In Northern Mindanao .10 12.95 MCT to Western Misamis Oriental Opol 28 3.338. Bugo to CDO proper 1. which usually includes empty positioning/return.650.00 17.00 CDO Proper 18 2.744.00 10.00 Salay 45 5.755.311.446.009.855.438.70 12.15.75 Binuangan 53 5.489.983.271.

000/application Php1.000 5.500 2.250 5.000 Total Unit Cost (PhP) 32.2.500 2.40’* ATRIG: Facilitation Certification Fee Doc Stamps “Facilitation” (Informal) Miscellaneous Break bulk Cargo (PEZA Registered) Customs Legal Charges: Processing Fee ATRIG: Facilitation Certification Fee Doc Stamps Broker’s Facilitation Miscellaneous Brokers: Brokerage Facilitation Fee *: subject to applicable forex Source: CDO Import/Export Brokers Amount (PhP) Php1.786 6. Table 2.500 Facilitation Unit Fee (PhP) 30.500 17.500 2.000 10.500 2.000 15.500 12.40’* Container Security Fee .500 7.17 Export and Import Processing Charges by Agency Cost Item Containerized Cargo Due to Customs :Processing Fee Container Security Fee .500 7.4.500 2.000 4.16 Brokerage and Facilitation of Containerized Cargo No.500 2.000/BL Php100.000 US$10 US$5 Php3.16.000/BL Php1.834 5.500 6.500 2.500 Source: Compiled from Bill of Ladings Table 2. 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 2.2 Brokerage and Facilitation Charges Services provided by import-export brokers have a standard charge by the quantity of goods exported as shown in Table 2.750 3.334 3.000/BL Php3.000/application Php1.000/BL 33 Shipping Costs and Competitiveness In Northern Mindanao .000/application Php100 Php30 Php5.17.000/application Php100 Php30 Php5.000 8.286 3.000/BL Php50.000 7.500 10.500 2. of units/BL 1 box 2 boxes 3 boxes 4 boxes 5 boxes 6 boxes 7 boxes 8 boxes 9 boxes 10 boxes & Over Brokerage Unit Fee (PhP) 2.500 2.

50 974.797.797 1.436 1Arrastre rates (Terminal Handling) for major ports in Mindanao under the jurisdiction of the Philippine Ports Authority (PPA).00 1.2.3 Port Charges Costs incurred at the port are the arrastre and stevedoring charges. stevedoring rates at these ports favor the domestic-bound containers as they are considerably lower than their import/export counterparts.646 6. MCT Tariff. CIP.077 3.19).797 PHIVIDEC – MCT 974.50 974.50 1.00 40’ Source: PPA CDO and MCT Tariff 34 Shipping Costs and Competitiveness In Northern Mindanao . Table 2.00 40’ Stevedoring 273.241 7.4. It is evident that a uniform Mindanao-wide arrastre rate is used while those of Cebu and MICT (Manila) are different and much higher.00 20’ 273.797 1.448 2. 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 2.50 603.50 974.50 1.465 1.797 1.806.50 1. 1.448 Manila – MICT 2.18 for the Northern Mindanao ports in comparison to other international ports in the country.797 Cebu – Cebu Int’l. However.465 2.797 Davao – Sasa 974. namely Cagayan de Oro. ICTSI Tariff Port Table 2. The 40 footers for the import/export are even slightly lower than the domestic-bound containers.19 Arrastre and Stevedoring Charges at MCT and CDO Ports FCL Containers Domestic Import/Export Arrastre 903.207. Davao and General Santos had been leveled as of August 2009.50 1.50 974.50 20’ 1.18 Comparative Arrastre Rates of Selected Philippine International Ports1 20 Footer FCL 40 Footer FCL Import Export Import Export CDO – CDO Port 974. Source: PPA CDO. Davao Port Tariff. The rates are shown in Table 2.

02 179. accounts for 78% of export cost.00 1.2. all costs actually incurred are documented.012.00/CBM 1.0 1.000.491.00 575.437.21 for a better understanding of the recent export cost structure to a destination within Asia. Table 2. on the other hand.64 134.500. The informal cost incurred is quite high at 20% of total cost.500. 35 Shipping Costs and Competitiveness In Northern Mindanao . Freight cost for a 40-footer reefer.2 0.20 Exporter’s Cost .000.00 20.74 Actual (PhP) 28.4. A representative sample of how costs run for a dry and reefer 40-footer are presented in Tables 2.00 900.20 2.5 0.740.4 Sample Logistics Cost of Exporters Based on several receipts and financial records of exporters and importers.0 Source: Compiled by the Study Team from actual cost disbursements of exporters.09 100.74 3.3 3.00 20.20 2.1 2. Freight cost is shown to account for almost 40% of total cost for a dry 40-footer.4 0.3 0.3 Share to Total (%) 49.00 1.6 Remarks paid to shipping line paid to shipping line paid to shipping line paid shipping line paid to port authority paid to terminal operator paid to terminal operator paid to terminal operator paid to trucker paid to BOC paid to regulatory agency @ 45CBM/40’ van paid to Customs Broker paid to trucker informal cost (per "rush" transaction) informal cost (per bill of lading) informal cost (per export declaration) Total 58.0 1.068.00 7.Exporting Lumber through 40 Footer Dry Van from CDO to Shanghai via MCT November 2009 Cost Items Ocean Freight Docs Fee (Bill of Lading) THC (Terminal Handling Charge) Seal Fee Wharfage (VAT-in) Weighing (VAT-in) Arrastre (VAT-in) Storage (VAT-in) Trucking (VAT-in) Documentary Stamps (shipper) Commodity Clearance (DENR) Customs Broker's fee Stuffing DENR "Facilitation" BOC Customs on Board Cargo Clearance “Facilitation” BOC Export "Facilitation" Published (PhP) 5.200.5 10.00 1.00 150.03 179.00 219.20 and 2.00 438.00 1.5 2.00 4.987.1 2.64 134.200.990.00 5.00 900.500.2 6.50 150.

1 1. That is. Ozamis and Butuan do not have direct foreign containerized shipping calls due to low cargo volume.64 179.4 0.2 1.000.120.00 900.8 Remarks paid to shipping line paid to shipping line paid to shipping line paid to shipping line paid to shipping line paid to shipping line paid to shipping line paid to PhilExport (processing fee) paid to terminal operator paid to terminal operator paid to port authority paid to port authority paid to trucker paid to BOC paid to Customs Broker 5.20 Published (PhP) Actual (PhP) 119.795. Many ports of Northern Mindanao particularly Iligan.102. Presently.00 7.380. exporters from these areas truck their products to Cagayan de Oro or MCT to have access to foreign shipping.50 for a 20-footer and Php2.00 Share to Total (%) 77.9 5.00 150.200.990.3 0.00 Source: Compiled by the Study Team from actual cost disbursements of exporters.00 1.20 437.1 0.00 10.00 150.6 3.053 for a 40-footer is noted with the use of the RORO.012.00 per EO 554 Informal cost (per bill of lading) informal cost (per export declaration) Total 153.00 150.595.64 179. Presently.22 gives the build up of costs to be incurred for transshipped goods using the conventional and the RORO.00 575.21 Exporter's Cost . domestic transshipment of FCL containers is not a viable option for Mindanao shippers/exporters since the cost is too high.00 1.Table2.82 100.Exporting a commodity through 40 Footer Refrigerated Van from CDO to Tokyo via MCT March 2010 Cost Items Ocean Freight FAF (Fuel Adjustment Factor) YAS (Yen Appreciation Surcharge) Docs Fee (Bill of Lading) THC (Terminal Handling Charge) Documentary Stamps (shipping line) Seal Fee ED Processing (OSEDC) Arrastre (VAT-in) Weighing (VAT-in) Wharfage (VAT-in) C-5 Form (PIA) Trucking Documentary Stamps (shipper) Customs Broker's fee Commodity Clearance (BFAR) BOC Customs on Board Cargo Clearance "Facilitation” BOC Export "Facilitation" 2.00 3.00 10. The latter transport system is the development thrust of the government to improve inter-island movement of goods and passengers.200. handling.0 2. only a savings of Php1. and wharfage charges.200.00 1. 36 Shipping Costs and Competitiveness In Northern Mindanao . Table 2.1 0.600.0 0.98 56.012.00 2.00 4.1 0.830. Among others.1 0.00 1.3 0.1 0.9 6. 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. due to very high domestic freight rates.

00 1.077.00 3.00 2.00 2.00 437.Table 2.00 3.032.00 437.00 202.98 43.760.102.864.187.50 202.00 431.00 437.913.00 3.077.760.797.646.00 202.00 202.00 31.00 20.00 7.646. 37 Shipping Costs and Competitiveness In Northern Mindanao .00 7.98 CHA-RO 20 Footer 431.00) 40 Footer 862.00 40 Footer (2.960.418.00 2.00 63.085.913.980.22 Transshipment Cost Components (Php) Conventional Item Arrastre (CDO) Wharfage (CDO) Domestic Freight Arrastre (North Harbor) Wharfage (North Harbor) Trucking to MICT Wharfage (MICT) Arrastre (MICT) VAT Total 20 Footer 974.00 437.00 437.00 6.00 65. MICT. Shipping lines.00 862.00 990.50 40 Footer 1.50) CHA-RO Source: Compiled from tariffs of PPA CDO.00 202.00 3.418. and Truckers.960.053.98 Difference between 20 Footer Conventional and (1.640.917.032.00 202.00 2.98 43.00 437.00 32.640.00 20.00 6.

truckers and shipping lines.. Based on this information. 26% of total registered firms were targeted and a good sampling rate of 10% was achieved.1 Survey Sampling Particulars Total Firms1 in Study Area Target Samples Number of Samples Share to Total Number of Samples Sampling Rate Shippers/ Exporters 161 46 29% 14 9% Importers 222 36 16% 14 6% Shipping Lines 6 6 100% 6 100% Truckers 40 25 63% 8 20% Total 429 113 26% 42 10% Data on Shippers – DTI.3 LOGISTICS SURVEY FOR NORTHERN MINDANAO 3.e. b) Follow ups and collection were extensively done for a month. the disclosed information on actual charges and costs incurred by the respondents are used Survey Returns 38 Shipping Costs and Competitiveness In Northern Mindanao . interviews were also conducted for the truck drivers to supplement the trucking questionnaire forms. The truck drivers gave specifics as to difficult road sections to traverse and the nature of problems. On the whole. in terms of shippers. Philippine Sinter Corporation) are no longer included in survey.1 presents the sampling rate by logistics group. shipping lines and truckers were the main export logistics groups targeted for the survey. Data on Truckers – CDO Port Truckers’ Assn & Others identified by Philexport10A 2009. The questionnaires are shown in Annexes 3-1 to 3-4. The sampling was based on the recorded/registered firms in the study area. which were accomplished by the truck operators. 1 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. One Stop Export Documentation Center and BOC-CDO/MCT 2009. importers. Data on Foreign Shipping Lines – Philexport10A. c) Accomplished forms were reviewed and call-backs to respondents were made for those needing clarification and completion. are discussed in chapter 2. Table 3. the bigger firms with their own private ports (i. As such. The shippers/exporters. Further. importers. Table 3. Moreover. The locations and number of players.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 target sampling was drawn up only for those firms that use the public ports of Cagayan de Oro (CDO) and Mindanao Container Terminal (MCT). Data on Importers – BOC Accredited Firms and MCT List 2009. d) Encoding of the collected forms was done using MS Excel. Findings and results of the surveys are given in succeeding sections of this report.

3 14.6 No. The importers. of Exporters 14 2 2 2 5 3 2 0 12 0 0 2 4 4 4 Distribution (%) 100. which is discussed in section 2. A fair distribution of the respondents by size of business is noted.6 28.0 42.3 0.7 21. Some of the importers (i. of Respondents Industry Sector1 Agriculture/Aquaculture Processed Food Wood/Furniture Industrial Others Business Type1 Production Trading Manufacturing Services Others Business Size1 Micro (below Php3M) Small (Php3M-15M) Medium (Php15M-100M) Large (above Php100M) 1 Using Importers No. 3.0 42. 2010 39 Shipping Costs and Competitiveness In Northern Mindanao .1 28.3 35.3 14. Most of these firms acquired second-hand or surplus vehicles for their operation and many are operating on a “for hire” basis.4 7.2 Profile of Survey Respondents The profiles of the survey respondents by target group are presented in Tables 3. are more of the service business types (such as forwarders) servicing the exporters. however.in the comparative cost analysis against the published rates gathered from relevant agencies and entities. There is one large sized trucking firm owning a fleet of hundreds of trucks.0 35.0 0.0 0.4 of this report.0 7. For the shippers/exporters. The total number of vessels calling at Northern Mindanao is 11 but the frequency of calls is 6 vessels weekly.2 Profile of Exporters and Importers Respondents Exporters Item No.9 21. Table 3. All firms have vessels calling at MICT port but only one firm has vessels calling at CDO port. Two of the respondents.1 0.7 57.2 to 3.0 14. For the shipping companies.7 0. of Importers 14 0 0 0 6 7 1 0 5 8 0 6 3 1 4 Distribution (%) 100.3 28.6 28. are importers for the domestic market only. 6 firms) are actually the exporters themselves importing their raw material requirements.9 50. five respondents are foreign liners and one is a non-vessel operating carrier company (NVOCC).e..0 14.0 85. The trucker respondents are more on the micro business size owning about 1 to 3 trucks. respondents from all industry sectors are covered with many in the manufacturing type of business.4.4 14.0 0.6 NEDA classifications Source: Logistics Survey. on the other hand.1 0.0 0.

300 100 China Japan Singapore Source: Northern Mindanao Logistics Survey.5 and 3.3 Profile of Trucker Respondents Item Total Samples Business Size Micro (below Php3M) Small (Php3M-15M) Medium (Php15M-100M) Large (above Php100M) Operation Type For Hire Not For Hire Mixed Vehicle Acquisition Type Brand New Surplus Source: Northern Mindanao Logistics Survey.7).6).0 12.0 12.1 Shippers Survey Most of the shippers or exporters surveyed apparently outsource their trucking logistics instead of maintaining their own fleet.5 Table 3. trucking still remains an outsourced service (see Tables 3.114 & 1. on the other hand. of Ships Calling MCT Port No.200 220 1. Even with costs reaching 26% to 50% of total cost.3 Results from the Survey 3. 2010 3. 2010 No. Europe. This is true for exporters in all industry sectors especially since trucking cost make up less than 10% of their total logistics cost.4 Profile of Shipping Lines Respondents Vessel Information No. 1 1 2 2 2 3 1 4 6 5 1 6 1 - Conventional Containerized Singapore Weekly 1108 1.5 25. of Truckers 8 3 2 2 1 5 1 2 1 7 Distribution 100.338 220 & 449 1.5 25.Table 3.0 37. of Ships Calling CDO Port Vessel Types Origin/Destination Call Frequency Ship Capacity (in TEUs) Ship Capacity (reefer plugs) 712 & 1.0 25. 40 Shipping Costs and Competitiveness In Northern Mindanao .049 220 & 180 Asia. is substantial for most of the surveyed companies accounting for more than 75% of total logistics cost (see Table 3.5 62.5 12. Shipping cost.3. US Hong Kong Respondent No.5 87. This may be explained by the proximity of most shippers of less than 20 Kilometers from the ports.

Table 3. c: 26% .6 Trucking Share to Total Logistics Cost of Shippers Industry Sector of Samples Agriculture/Aquaculture Processed Food Wood/Furniture Industrial Others Percentage of Total Samples 1 Note: Trucking Share to Total Logistics Cost1 a b c d e 1 1 0 0 0 1 1 0 0 0 1 1 0 0 0 1 1 1 0 2 2 0 1 0 0 43% 29% 14% 0 14% a: Less than 10%. 41 Shipping Costs and Competitiveness In Northern Mindanao . 2010 Based on the evaluation of the present logistics infrastructure shown in Table 3. b: 10% . d: 51% .7 Shipping Share to Total Logistics Cost of Shippers Industry Sectors of Samples Agriculture/Aquaculture Processed Food Wood/Furniture Industrial Others Percentage of Total Samples 1Note: Shipping Cost to Total Logistics Cost1 a b c d e 0 1 0 0 1 0 0 0 1 1 1 1 0 0 0 1 1 1 0 2 0 0 0 1 2 43% 14% 21% 7% 14% a: Less than 10%. 2010 Table 3. Warehouses are just average in quality.1 Source: Northern Mindanao Logistics Survey.1 14.50%. c: 26% .5 Outsourcing of Trucking Logistics by Shippers Industry Sector of Samples Total Samples Agriculture/Aquaculture Processed Food Wood/Furniture Industrial Others Percentage of Total Samples Distance from Port (kms) <20 20-50 51-100 101-150 Shippers 14 2 2 2 5 3 Shippers 10 1 2 1 Yes No 13 1 2 0 2 0 2 0 5 0 2 1 93% 7% Share (%) 71.50%. the quality of ports.25%.75%. e: More than 75% Source: Northern Mindanao Logistics Survey. d: 51% .75%.3 7.25%. 2010 Table 3. b: 10% . e: More than 75% Source: Northern Mindanao Logistics Survey.4 7. and telecommunication services are found adequate (either average or highly adequate).8. roads and highways.

Another nagging issue on the software aspects of logistics is the difficult and time consuming export documentation/ clearance procedures.poor Total Source: Northern Mindanao Logistics Survey.9 Ranked Logistics Cost by Shippers Rank of Costs (% of responses) Cost Items Port Charges: THC Trucking Arrastre Stuffing/Stripping Customs Brokerage Warehouse Port -Wharfage Freight Customs Facilitation Other Informal Very Low 7 7 7 Low 7 7 7 Average 43 43 57 36 36 29 43 14 43 21 High 21 43 14 7 14 43 29 7 Very High 7 7 7 7 14 7 7 29 7 14 Source: Northern Mindanao Logistics Survey.8 Evaluation of Quality of Infrastructure by Shippers Logistics Infrastructure Ports Roads and Highway Warehouse Telecom Infrastructure & Services Total Source: Northern Mindanao Logistics Survey. 2010 Table 3.high Doc Processing . 2010 Number of Samples 8 4 4 3 3 1 23 % of Responses 34. 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 3.3 100.4 13.10 and 3.10 Logistics Issues from Shippers Identified Issues Freight charges .complicated Fuel/Transport Cost .0 4.high Infrastructure .0 42 Shipping Costs and Competitiveness In Northern Mindanao .8 17.9).Table 3. The issues of high freight cost and presence of high informal cost repeatedly appears in other survey responses as seen in Tables 3.4 17.high Shipping Schedules .poor Informal Charges .0 13. Table 3.11. 2010 Evaluation of Quality (% of answers) Very Very High Ave. freight is revealed as highest cost followed by the trucking cost. Low High Low 36 36 14 14 0 7 0 8 8 29 9 38 29 36 82 31 44 21 9 23 17 1 0 0 2 Among the components of the logistics costs.

7 16.0 25.000 Shipment Mode C&F FOB FOB FOB Domestic Shipment Freight Cost (PhP) Package Destinations Package Wood Silicon Silicon Paper Products 40' 20' 20' 3.3 21.7 14.7 8.3 7.0 8.7 16.7 25.3 8. Improvements were noted for the quality of infrastructure.3 33.000 3. 2010 Development of Logistics Conditions (in % of responses) About Much Much Worse Better the Worse Better Same 75.7 58. Table 3.12).7 33.4 14.7 8.6 35.0 8.3 41.7 Table 3.0 33.11 Evaluation and Experiences of Selected Export Processes Evaluation of Selected Export Processes Timely Clearing & Shipping of Export Goods Timely Clearing & Delivery of Import Goods Transparency of Customs' Clearance Process Timely & Adequate Receipt of Regulatory Changes Electronic Processing of Customs' Declaration Experiences of Shippers Delays due to Pre-shipment Inspection Criminal Activities (e.12 Perceived Evolution of Logistical Components by Shippers Logistics Components’ Evolution in the Past 3 Years – Shippers’ Views Customs clearance procedures Port clearance procedures Quality of transport infrastructure Quality of telecommunications infrastructure Availability of private sector services Regulatory regime Good governance and eradication of corruption Overall business environment Source: Northern Mindanao Logistics Survey.6 41.3 16.3 8. customs.3 25.7 58.0 25.0 41.0 58.0 8.3 25. Stolen cargo) Solicitation of Informal Payments Source: Northern Mindanao Logistics Survey.g.12cbm 43 Shipping Costs and Competitiveness In Northern Mindanao .3 75.3 28. However.Table 3.7 14.000 39. the shippers perceived some of the components to have improved in the past 3 years.3 16. telecommunications.3 25. port clearance and business environment are perceived to be same (see Table 3.400 103.3 8.3 16.000 87.1 28.6 14. and private sector services.7 25.3 50.3 7. Likewise.3 42.3 66.0 Despite the poor rating of logistical conditions.3 8.3 66. Table 3.1 28.7 8.3 16.4 14.0 14. 2010 Frequency of Occurrence (% of responses) SomeHardly Always Often Rarely times Ever 85.12 cbm China Europe USA Europe 3.3 8.9 21. those exporters with import activities especially for their raw material inputs provided freight costs of their imports.13 summarizes the freight costs provided by the shippers by type of commodity and by destination.13 Freight Costs by Commodity of Exporters Export Commodity Freight Cost (PhP) 24.

Export Commodity Freight Cost (PhP) 38. Import procedures were evaluated by all the importer respondents and the top most difficult processes identified per implementing agency are given in Table 3.000 32.000 not given not given 69.325 45.000 Industrial) Source: Northern Mindanao Logistics Survey.000/cbm 6.000 120. Table 3.000 16.2 Importers Survey There were 7 respondents from a total of 14 that gave their assessment on charges by port they use. Tertiary 36. RG PG (Coco 20' 150.000 bulk shipment Rubber Boots 20' Consignee paid Fatty Alcohol. the ports of MICT and CDO are found to be very expensive as compared to the ports in Baloy (private port).000 Shipment Mode FOB & CIF FOB FOB C&F C&F FOB Consignee Designated FOB FOB C&F FOB FOB FOB&CIF Domestic Shipment Freight Cost (PhP) 175.000 Consignee paid 10. 2010 3. 2010 44 Shipping Costs and Competitiveness In Northern Mindanao .000/cbm 154.825 20.14 Assessed Port Charges by Importers Ports Cheap CDO Port MCT Cagayan Corn Port-Baloy Davao Cebu 0 0 0 0 0 Comparative Port Charges (in % of responses) Reasonable 0 8 8 17 17 Expensive 8 0 0 0 8 Very Expensive 17 17 0 0 0 Source: Northern Mindanao Logistics Survey.000 20' reefer 350.14).000 22. On the whole. USA Japan Worldwide 90. USA USA Japan Japan Japan Europe.000 Package Destinations Package 20' 20' 10' raw material 20' Paper Products Raw Sugar Cocohusk Chips Fiberglass Fiberglass Abaca Bags Frozen Fruits (coconut) Wood/Native Crafts Wood/Native Crafts Fresh Seafood Ceramics 20' Bulker not given 40' 20' box LCL 20' 40' 20' 40'reefer 20' Europe USA Japan Japan Japan Europe.3.15.000-45.000 Amines. Davao and Cebu (see Table 3.

the benefits of using the VASP is not well explored as this is the electronic submission of required import forms. The actual logistics costs and charges incurred by the importers are broken down by component as shown in Table 3. Moreover.7 92.9 64.1 28.0 7. which eliminates a number of steps of the importation process (see Table 3. Freight is shown as the largest cost component together with the customs duties.6 7.9 42. This is followed by customs duties and informal costs (Table 3. 2010 To compensate for difficulties encountered in import procedures. of Environment and Natural Resources (DENR) Bureau of Internal Revenue (BIR) Dept.17).15 Identified Difficult Import Procedures by Importers Agencies Bureau of Customs (BOC) a) b) c) d) e) a) b) c) a) b) c) d) Identified Most Difficult Procedures Documentations Facilitations Manila-based Tax Refund Manila-based Accreditation Renewal of Permits Processing of Documents and Payments Withdrawal of Cargoes Permit to Load Dangerous Cargoes Withdrawal of Loose Cargoes Heavy Equipment Operation Cargo Stripping of LCL Payments Philippine Ports Authority (PPA) Arrastre Service Provider Bureau of Plant Industry (BPI) Dept. The common practice of an early cargo withdrawal from port is done by almost all the firms. many of the firms encourage formal training for their staff on import procedures. Table 3.Table 3. 45 Shipping Costs and Competitiveness In Northern Mindanao .16 Good Practices to Improve Importation Process 1) 2) 3) 4) Practices of Importing Firms VASP submission to Bureau of Customs Early cargo withdrawal from port Participate in consultations on regulatory matters Encourage staff formal training on import procedures Source: Northern Mindanao Logistics Survey. of Finance (DOF) a) Manila-based Filing of Import Permits a) b) c) a) b) a) Securing Dangerous Goods Certificate Export Permit Ore Certification Process Processing of Authority to Release Imported Goods Tax Clearance Release of Tax and Duties Exemption Source: Northern Mindanao Logistics Survey.18.1 Similar to the claim of exporters. 2010 Yes 35. importers also ranked freight costs as the highest in their incurred logistics costs. However.3 No 50. the respondents have resorted to the use of some measures listed in the questionnaire.16).

797 CDO:1.3.Table 3.610.500 5.300 11.500 Wharfage Freight Not disclosed Not disclosed Coffee 3 in 1 (origin .0 0.230 2.18 Actual Logistics Costs Incurred by Importers Import Costs (in PhP) Customs Duties Facilitation/ Informal Cost 14.000 20.915 exempt exempt zero rated Inclusive Inclusive 60. MCT:873 CDO:1.6004.000 3.000 63. the truckers were made to assess the conditions of their operation in terms of the roads they traverse.650 3.0 Source: Northern Mindanao Logistics Survey.000 1.491 80. MCT:2. the conditions at the ports.200 894 MCT:974 MCT:974 779 CDO:1.1 21.500 5.1 14.5009.000 5.000 Packing Type Port Storage Brokerage 2. 2010 Table 3.4 7.716 exempt exempt Source: Northern Mindanao Logistics Survey.000 30.013 CDO:1.000 3. 2010 3.000 210.3 Truckers Survey There were eight respondents for the trucker’s survey.6 0.650 80.610..000 5.545.500 6.545.4 100. MCT:874 1.000 70. For the worst roads traversed. Similar to the other surveys.800 773 MCT:520 MCT:520 539 539 550 MCT: 269 MCT: 269 2.0 7.000 345.19 lists the road with a ranking of the type of difficulties. VAT Commodity Trucking Arrastre 46 Shipping Costs and Competitiveness In Northern Mindanao .300 6.000 23.014 1. and the costs of their operations.000 3.0 0.000 24.3 21.000 5.000 11.17 Ranked Importation Costs Importation Cost Items Freight Arrastre Wharfage Dues Port Storage Charges Trucking Customs Duties Value Added Tax Brokerage Facilitation/Informal Cost Total Respondents Ranked Highest 4 0 0 0 1 3 1 2 3 14 Share (%) 28. Table 3.000 50. MCT:2.500 8.000 15.Asia) Not disclosed Not disclosed DMA/MMA LUNAC 20' 20' 40' 40' 150.000 2.

Table 3. 2010 The respondents identified the problems they encounter at the commercial ports of the study area (i. b) Repair of cemented and asphalted roads.5 - Worst Roads Bukidnon (via Sayre Highway) Talakag.5 25.0 62. West Misamis Oriental Eastern Misamis Oriental Note: Shown here are ranked 3 (quite problematic) and 4-5 (very problematic) responses only.5 12. Iligan..20). Bukidnon Lanao. Likewise.5 25.5 25.21 shows that the common problem of both ports is the lack of equipment. and e) Deployment of more traffic enforcers.5 12. CDO port and MICT).0 25.5 12.e. the obvious high cost solutions given are new roads and paving of roads (see Table 3.0 12. Source: Northern Mindanao Logistics Survey. b) Set up proper road signs. 47 Shipping Costs and Competitiveness In Northern Mindanao .Table 3.5 12.5 12.5 25. other roads in Bukidnon that are enumerated by the truckers as the accident-prone areas are as follows: 5) Manolo Fortich 1) Baloy 6) Carmen Hill Road 2) El Salvador 3) Mangima Road 7) Talakag Road 4) Maluko When requested to provide solutions for the road improvements.5 12.19 Assessed Road Conditions by Truckers Ranked Conditions (% of responses) Poor Road Highway Congestion due Design Congestion to Accidents (Geometry) 3 4-5 3 4-5 3 4-5 37.0 12. 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. 2010 The Sayre Highway in Bukidnon is ranked as the worst road due to congestion and accidents. 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. Source: Northern Mindanao Logistics Survey.5 12. Table 3. d) Dissemination and strict implementation of allowable weight of trucks. Low Cost Solutions a) Repaint and improve road signages.0 12. c) Improve pave roads. and c) Build new roads/ highways.20 Recommended Solutions for Road Improvements Improvements for Recommended Solutions Roads High Cost Solutions a) Pave/cement roads.

22 Ranked Operational Expenses of Trucking Firms Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 Source: Operation Cost Item Fuel Financing Cost Repair and Maintenance Drivers and Helpers’ Salaries Tires Insurance and Inland Marine Business Permits and Vehicle Registration Oil and Lubricants Franchise Fee and Regulatory Permits Garage Port Bribes Road Bribes Weighbridge Northern Mindanao Logistics Survey. Fuel has been ranked by almost all firms as the highest cost incurred accounting for 40% to 55% of total expenses.Table 3.24). not all provide their cargo tariff although the shippers provide information on this (see Table 3.21 Identified Problems at Port by Truckers Commercial Port Cagayan de Oro a) b) c) d) e) f) g) a) b) c) d) e) f) g) h) Identified Problems at Port Breakdown of Equipment Lack of Equipment Tips to Equipment Operator Misplaced cargoes Stickers Traffic Kotong or Informal Collections Dont allow trailer jack-up Lack of lifting equipment Computer malfunctions Long coffee and lunck breaks of regulatory agencies Long truck queue for loading/unloading of containers Red tape in entering Too many requirements Delays due to heavy traffic upon vessel arrival Mindanao Container Terminal Source: Northern Mindanao Logistics Survey. 48 Shipping Costs and Competitiveness In Northern Mindanao .3 to 2% 0.3. In terms of port and freight conditions.5 to 1% 3. Table 3.4 Shipping Lines Survey All the shipping lines in the study area responded the survey. shipping lines rated timeliness of cargo delivery by shippers and power outages as serious problems (see Table 3.23). 2010 Share of Operation Cost 40 to 55% 1% 7 to 9% 1 to 15% 10 to 25% 1 to 8% 1 to 7% 1 to 5% 1 to 5% 1 to 1.4% 0.7 to 2% 0. However. 2010 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.

4: really a problem. All ships are charged berthing dues based on their gross registered tonnage (GRT). 50% of the respondents are open to charges based on actual space occupied. 2: slight problem.24 Rate Port and Freight Conditions by Shipping Lines Port/Freight Conditions 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 Truck ban restrictions on movement of large Poor truck access to shipping terminals Cargo truck queuing area Other (specify): Power Outages Number of Respondents by Rated Problem Areas 1-2 3 5 5 5 6 6 6 4 3 3 3 3 5 5 2 2 3 3 3 1 1 1 1 3 3 1 1 1 4-5 Note: 1: not a problem.25 gives the port operation conditions of the shipping lines. 5: very serious problem Source: Northern Mindanao Logistics Survey. Europe.23 Cargo Tariffs (in USD) Container Size Origin/Destination 10 Footer Dry 20 Footer Dry 40 Footer Dry 20 Footer Reefer 40 Footer Reefer Source: Northern Mindanao Logistics Survey. 3: manageable problem. However. 2010 Table 3. US 2 Hong Kong 3 Singapore 4 China 5 Japan 6 Singapore Table 3.Table 3. which all claim to be appropriate. 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. 2010 3500 2200 603 1207 603 1207 Respondent Number 1 Asia. 49 Shipping Costs and Competitiveness In Northern Mindanao .

3=average. Your vessels are currently charged berthing dues based on GRT per day. and 4-5=high and very high. Would you find it appropriate for the port authority to charge berthing dues based on actual space occupied rather that GRT basis? 12. Yes Yes 1 2 Respondent Number 3 4 8 12 Yes Yes 5 12 Yes 6 10 Yes No No Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Equipment Monitoring No volume is very small No High maintenance cost No High maintenance cost Yes For better monitoring Yes For low cost of operations Source: Northern Mindanao Logistics Survey. 2010 Table 3. and departs at 6am the ff.) 10. do you find the system appropriate? 11. Table 3. day.m. If your vessel arrived at 10 p. All other charges are basically assessed by the shipping lines as average or low. Source: Northern Mindanao Logistics Survey. This is followed by informal charge.Table 3. 2010 50 Shipping Costs and Competitiveness In Northern Mindanao . Does your company deem it necessary to operate your own container yard? Justification.26 reveals that shipping lines find the port storage charge to be quite high.25 Shipping Lines’ Port Operation Conditions Questionnaire Item Average Time at Ports (hrs. are you charged an equivalent of two days port dues? 13.26 Ranked Port Charges by Shipping Lines Cost items Port charges Arrastre charges Stevedoring charges Quay crane charges Wharfage rates Port Storage Port dues (dockage) rates Pilotage rates Tug service rates Trucking rates Stuffing/Stripping rates Reefer Plug rates Weighbridge rates 1 Number of Respondents by Ranking of Costs/Charges1 1-2 3 5 5 5 5 5 1 5 4 1 1 4 4 2 4 1 3 4-5 1 1 1 1 1 5 1 2 1 1 1 2 1 3 Informal Cost (bribes) 1 Rank 1-2 = very low and low.

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$1.0 percent of the total USUS$1.8 percent of the USUS$994 Ports & Terminal Handling component-charges.50) only at exit port.87) Remarks Charged by shipping lines @US$104/TEU For export cargoes a 20-footer container from Northern Mindanao will entail wharfage and container handling charges amounting to USUS$5. The World Bank erred in its 2006 World Bank-IFC “Cost of Doing Business” Report. cargo handling/arrastre (US$175).336. namely (a) Documentation.233. which entails the biggest chunk at US$994 of the US$1.70 (US$27.1.4. Ports and terminal handling rates for export/import cargoes in Northern Mindanao are the lowest in Asia.336 WB figure or merely 2.86 (PhP259. includes domestic transshipment (US$500). particularly on Cross-Border Trade where the Philippines was claimed to have the highest cost of exporting compared to other ASEAN countries like Thailand. 4. ISSUES AND MEASURES 4.50 (US$22) NA PhP259. (b) Inland Transportation.1 Breakdown of Port Related Transport Costs /TEU.336 in the Philippines as compared to US$ 848 in Thailand. (c) Customs Clearance and Technical Control.336 transport cost in the Philippines. Table 4.70 (US$5. 51 Shipping Costs and Competitiveness In Northern Mindanao . The breakdown of the US$1. Vietnam and Indonesia. and (d) Ports and Terminal Handling.70) and USUS$22 (PhP974. as cited by the World Bank covers four areas. terminal handling charge (US$45) and port charges (US$274). Ports and Terminal Handling.86) PhP1. Combined port-related export costs (wharfage and container handling) represent a measly 2.1: Comparative Breakdown of transport costs per TEU Particulars Domestic Transshipment Cargo handling/ Arrastre Terminal Handling Charge Port charges Total Port & Terminal Handling WB-reported Rates (US$) 500 175 45 274 994 Rates at CDO/MCT NA Php974. US$335 in China and US$ 382 in Singapore. WB Report Port-related costs are those paid to PPA or PHIVIDEC (wharfage) and those paid to the terminal operator (container handling).

Hence. 17. 9. This is defined as the Origin THC. stating that THC is in nature an integral part of the freight. The World Bank-IFC included THC in the computation of port related charges in arriving at its conclusions as the term is indeed misleading. re-sealing Movement of container on/from chassis Internal transport of container to or from stack Handling container into or out of stack Storage of full container within time limits defined by port authority Storage charges after free storage period Take laden box out of stack Internal transport from stack to ship’s side under hook Move of container from ship’s side to ship’s rail Move of container from ships rail into ship’s cell Cranage Opening and closing of hatch covers Lashing of container Covered by Shipper/consignee THC Arrastre Charge Shipping THC Shipping THC Arrastre Charge Arrastre Charge Arrastre Charge Arrastre Charge Shipper/consignee Arrastre Charge Arrastre Charge Stevedoring/Freight rate Stevedoring/Freight rate Stevedoring/Freight rate Stevedoring/Freight rate Stevedoring/Freight rate 52 Shipping Costs and Competitiveness In Northern Mindanao . and/or where responsibility for the goods is transferred. 8. removal invalid labels.1 Terminal Handling Charge (THC) and other Surcharges Terminal Handling Charge (THC) has been a source of contention since its introduction in 1991. 4.2. 7. Delivery Empty +all associated clerical work and reporting Receiving full (+all associated clerical work & reporting) Inspection and reporting condition of container/completion interchange Inspection and reporting of seals and wiring. it should be shouldered by the party who secures the shipping service and thus pays the freight. For containers shipped on an FOB (Free-On-Board) terms. 2. that all costs shall be inclusive in the freight as an “all in” freight rate. 10.4. 11. 15. 12. In Indonesia. which specifies which party (buyer or seller) pays for which shipment and loading costs. 14. known as the destination charge. Table 4. 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. 13. most shipping lines have introduced separate charges for the freight rate and THC. 6. the Chinese Government has announced the conclusion of its investigation into the THC issue. the THC has been successfully reduced while in China. This is consistent with the Incoterms (International Chamber of Shipping) definition. Asian shippers have fought for their removal as the THC has become an extra charge over and above the freight rate. Since 1991. The Federation of ASEAN Shippers’ Councils (FASC) and Asian Shippers’ Council (ASC) emphasized that THC is an integral part of the freight. The shippers at the origin port of shipment are responsible for paying the THC at the port of loading. 16. 3. 5.2 Cargo Handling activity & applicability of THC Activity 1.

Terminal operators collect terminal services from the shipping line and. arrastre rates usually differ from one Philippine port to another making the terminal cost per port of call variable.400 37. 4.000 450 110 170 In USD 130 309 391 139 110 170 Shipping lines collect a uniform THC for the entire country irregardless of the port of call. shipping lines are earning more than the cargo handling operator who are actually performing the service. A comparative arrastre rates for selected international ports in the country is shown in Chapter 2 (Table 2. Whether the rates/charges per country are justified is another matter.2 THC Rates Country Currency 20’ In USD Charges Philippines USD 100 100 Hong Kong HKD 1. Wharfage Covered by Stevedoring/Freight rate Stevedoring/Freight rate Shipper/consignee Source: Study Team 2010 Note that actual terminal handling activities with costs borne by the shipping lines are only items 3. THC charges by the shipping lines is justified. 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. Hong Kong. thus.Activity 18. Overtime 20. Through the THC.000 264 Malaysia MYR 300 93 Pakistan USD 90 90 Sri Lanka USD 120 120 Source: Shipping lines THC advisory 2009-2010 40’ 130 2.16). Table 4. However. which does not warrant the USUS$100 charge. Physical & clerical planning of vessel operation +reporting 19. The primary issue against THC in the Philippines however.600 206 Japan Yen 25. In effect. THC in the Philippines is an arbitrary charge and has nothing to do with land-based terminal cost recovery. India. Stevedoring services (service performed on board vessel) has been traditionally for the account of the shipping lines and stevedoring 53 Shipping Costs and Competitiveness In Northern Mindanao . THC is a mechanism by which shipping lines recover the expenses of landbased cost. and a portion of item 1. 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. Singapore and China shippers/consignees do not pay the terminal operator handling charges similar to arrastre.

It violates the simple principle of “no work.charges are bundled with freight. A. why are Philippine shippers paying arrastre (cargo handling) charges directly to the cargo handling or terminal operator? (see Maersk Line THC Table) f.Competitive and Non Transparent a. Effects on Mindanao Exports (on current levels) a. It is a bad reflection on Mindanao port and handling charges which are actually the lowest in Asia. Only a small section of the business community (multinationals and large scale exporters) has the bargaining power of reducing costs. e. all land based cost are included in the freight rate E.g. THC has continued to increase since 1997. The payment of stevedoring services through THC is not only highly irregular. Up to 1994 THC was part of Freight. d. delivery points of USA. THC is Anti. Increases cost for FOB shippers c. There is a profit element as well as a over recovery c. b. When other methods of land transport is used such as rail/road to deliver to inland destinations. it is also unfair for Philippine FOB shippers/exporters who are practically subsidizing their buyers freight cost by paying the THC. It is forced on shippers’ and thus it is non-negotiable b. It violates the principle of free market forces (supply and demand) e. There is no guarantee that THC will not increased further. The admission by the AISL is unfair to the shippers and should be addressed. Findings THC as an Integral Part of the Freight Charge a. land based cost in these transshipment points are included in the freight rate. b. When containers are moved across the globe using transshipment points. no pay”. Charges other than the so called Land Based charges are included in the THC d. If THC is an actual recovery of land based cost. Europe & Russia c. It contributes to making Mindanao exports uncompetitive. 54 Shipping Costs and Competitiveness In Northern Mindanao .: Inland.

at Manila or Cebu discharging port. but which costs are already part freight as these are not in any way related to product shipment.B. C. These authorities have wide powers to monitor unfair pricing. e. Legislation is particularly necessary to protect the interest of the small and medium scale shippers c.3 Transshipment Domestic transshipment of FCL containers have not been an option for exporters. Some cost such as reporting. there would be less confusion and disputes. The large portion of land based cost namely “arrastre” is already paid by the shipper. 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. Legislation is Necessary a. In transshipments. Other Shipping Surcharge Surcharges should be temporary in nature and should be removed when normality resumes. To prove that THC pricing mechanism is an anti-competitive practice in a free market economy. empty wharfage are some of the terminal costs that are borne by the shipping lines. 55 Shipping Costs and Competitiveness In Northern Mindanao . shippers will have to pay on top of domestic freight domestic arrastre and wharfage dues at origin port. THC should be imposed on a port to port basis given the disparities in handling rates among the different ports in the country. trucking to international port and again wharfage and export arrastre at the final loading port. the Philippine Shippers Bureau. 4. documentation and empty container handling. All charges are subject to 12% Value Added Tax. 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. Helps to keep export products competitive The government. Domestic freight rates are higher than foreign freight rates per nautical mile. There are mechanisms in place in the USA and EU to prevent price fixing (anti trust) d. thus paving the way for improved shipper-carrier relationships. b. By having a simplified freight tariff after due consultations. There are also mechanisms in place in the USA and EU which compels shipping lines to file details of pricing with the authorities.

forklifts) were not considered in the ports design criteria. Demand versus capacity projection will guide PHIVIDEC and MCT in deciding when port expansion should commence. The hitch however is that cargo should be shipped from Cebu. 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. Shippers will also need to pay overtime to employees. 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. an exporter of marine products from Northern Mindanao was offered freight rate that is USUS$1. Efficient container yard operation is however hampered by the exclusive use of container front end loaders. prioritizing vessel over yard (withdrawal) operations is strategically appropriate. stripping and warehouse receiving crew or pay overnight charges to truckers. 4. As traffic volume increases. wide storage areas and covered transit sheds.000 lower than the usual rates his company is paying. he found out that it will cost his company approximately PhP80. with domestic containers enjoying only two days of free storage privilege. Upon checking with local freight rate and charges.4. Operationally.4. Pavement block construction on the yards has also limited the use of MCTs container reach stacker. this becomes a problem and complaints of delayed withdrawal will abound. 56 Shipping Costs and Competitiveness In Northern Mindanao . equipment reliability becomes a major issue for the CDO port. However. MCT cannot just rely on its four units of RTGs and one unit reach stacker for its yard operations. 4.In an interview.4.770) in freight.1 Mindanao Container Terminal With increasing domestic and foreign traffic. handling and associated costs to bring his company’s 40footer refrigerated container to Cebu. mostly acquired surplus or second hand. This could mean that the container yards were designed exclusively for RTG type of operation and front end loaders (reach stackers. Port Operational Issues 4.000 (USUS$1. Though the cargo handler is well equipped based on inventory.2 Cagayan de Oro Port CDO port has the advantage of having long berths. MCT will need to improve its yard handling capacity and additional RTGs may be the only option to keep up with higher demand.

The Tariff and Customs Code.Until 2009. 4. 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. However. 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. With the approval in 2009 of its tariff leveling petition.3 Vessel Dues PPA currently charge berthing fees on a GRT-day basis. the PPA decided to change the charge base to GRT per Calendar Day due to the following reasons: a. Unlike MCT. etc. which originally embodied the berthing fees. CDO cargo handling tariff is thirty percent lower than that of the ports of Davao and General Santos. b.1: PPA reported that CDO Port's Annual Berth reliability. etc. delay in the arrival of quarantine launch. c. it should be in a position to replace ageing front end loaders and improve equipment Figure 4. 57 Shipping Costs and Competitiveness In Northern Mindanao . CDO port does not have an Electronic Data Interchange (EDI) system and due to apprehensions by domestic shipping lines of higher handling costs. 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. This is most prevalent among tramping vessels. did specify that the berthing charges shall be assessed based on the GRT of the vessel for the first 24 hours or fraction thereof. 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. Occupancy Rate was beyond 65% in 2009 The continued and increasing use of domestic liners of ten footer containers is also a problem in yard and equipment planning. The cargo handling operator’s ability to acquire modern cargo handling equipment may have been curtailed by issues of affordability. utilization of the CDO port quay crane has not been made compulsory. There were some problems when to reckon a vessel as having arrived and when to reckon it as having departed.4.

Inc. 58 Shipping Costs and Competitiveness In Northern Mindanao . Lorenzo Shipping Corp. Negros Navigation Co.. Besides. high insurance premium. 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. and Cebu Ferries. maintenance and drydock costs. Vessels intentionally slows down when their estimated time of arrival (ETA) will be before midnight to save a day’s equivalent of berthing fees. The implementation of the present charging base of Per GRT per Calendar Day has been going on for the last 20 years. Additionally. 4. vessels arriving before midnight and departs early the next day are charged equivalent of two days at berth.5 Domestic Sea Freight Only Philippine registered vessels may engage in inter-island shipping. 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. high interest rates. Solid shipping. Cebu run vessels (Roro) also berth stern first requiring less berth space. lack of comparable government support program for domestic shipping. low port efficiency and productivity (North Harbor). This will also give the shipping lines incentive to avoid waiting for cargo or in using the port as parking space. Foreign ocean freight shipping lines may not engage in inter-island freight shipping because of restrictions in cabotage. On top of these. and higher cost in domestic liner operations. NMC Container lines. Assessing the shipping lines based on Linear Meter Hour instead of GRT days is most appropriate to encourage vessels to arrive on time. shipping lines can demand higher productivity from cargo handling operators and/or strictly observe Vessel Operations Commitments (VOC)... Corp. there is a need to revisit the berthing dues currently charged by port authorities. with the improvement in cargo handling productivity and the employment of quay cranes by port operators. Bookings will also be better managed and cargo delivery cut-off strictly enforced. The higher cost of domestic shipping service vis-à-vis foreign shipping can be traced to several factors including: high fuel cost. higher taxes for domestic shipping operations. majority of the vessels of the major players in the industry Aboitiz Transport System. Inc.. are obsolete by Japanese standards and require higher operating. Sulpicio Lines. However. only to vessels which are registered in that country.d. The improvement of the inter-island freight shipping will translate into competitiveness or better competitiveness of Philippine exports. Based on industry statistics.

This has not only lowered the transport cost of goods. are traditionally not dependent on revenues from passengers alone. Figure 4. 59 Shipping Costs and Competitiveness In Northern Mindanao .4. its role was expanded to cover long haul routes. It saw very limited success in long-haul sea freight. the chassis mounted containers are lashed to the vessel deck in preparation for voyage. Shipping companies which ply longer inter-island distances. Aboitiz Transport System. Ocean Transport and Sulpicio Lines operate cellular container carriers and/or pure container carriers in addition to their RORO operations. Unlike short sea Roro.2: Left: Balingoan-Benoni RORO Vessel.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. Long Haul domestic shipping have started to change some of their strategies from employing RORO-Passenger (RORO/PAX) Carriers to purely container freighters. Right: Wing Vans ideal for RORO RORO/PAX Container Carriers RORO/Pax or Roro-Passenger Container vessels are carriers that carry both passenger and containerized cargoes. SurigaoLeyte among others. The original concept is as floating bridges to connect the islands for easier transport of cargo and do away with cargo handling. Cargoes are efficiently transported via wing vans or open stake trucks and freight rates have been reasonable. among others. They earn their profits from cargo. Containers are mounted on a chassis and is towed to the vessel hold via a terminal tractor and where it is jacked up. such as ManilaCebu and Cebu-Zamboanga. Balingoan-Camiguin. It is most efficient for short-sea crossing of passenger and cargoes and a big boost to tourism. Short Haul RORO The RRTS-SNRH program has been very effective for short sea crossing such as Mukas-Ozamis. Negros Navigation. Dipolog-Dumaguete. but more particularly improved mobility and enhanced tourism.5.

Even today. 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. Ship to shore gantry cranes in Northern Mindanao can achieve 20 to 28 moves an hour. elements that assure a cargo clients that they could plan and manage the movement of their goods.3: Container Vans unloaded from a RORO/Pax Vessel competition from budget airlines. With the increase in fuel prices. Conventional container carriers however can reduce speed and save fuel.Though contributing only roughly thirty percent of revenues. 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. Survey results indicate that seventy two (72) hours sailing from Cagayan de Oro to Manila is still acceptable to majority of Northern Mindanao shippers. RORO/PAX has provided shipping companies with flexibility and independence from the inefficiencies on the cargo handling service providers during the last decade. Vessel capacity is not maximized due to dead spaces above and below 60 Shipping Costs and Competitiveness In Northern Mindanao . Foreign shipping lines have reduced speed of their vessels from 25 knots to 20 knots and save 15 to 20 percent fuel. This improvement in productivity have nullified RORO/PAX carriers advantage of faster loading and unloading of containerized cargo. 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. a far cry from the seven (7) to ten (10) moves per hour using ship’s gear thereby reducing port time. Container carrying RORO vessels are further disadvantaged by having to maintain ancillary equipment such as yard tractors and hundreds of chassis. and stiff Figure 4. Northern Mindanao cargo handling operators have also improved vastly on their container handling capabilities. Shippers of perishable cargoes such as tomatoes prefer faster sailing time in the absence of ventilated containers. ships carry passengers onboard because it translates to scheduled departures and specific routes. Historically.

The shipping lines in return argued that the RORO tractors and trailers should be treated as ship’s gear. lashing/unlashing. Figure 4. etc.chassis mounted containers stowed on its cargo decks. The cargo handling operators in return argued that in conventional container carriers. chuck positioning.4: Workflow for CHA-RO (RORO/PAX) 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. This despite their continued reliance on cargo handlers to provide stevedores for work on board vessels for trailer landing leg deployment/redeployment. 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. the ship’s gear (ships crane) is operated by the personnel of the cargo handling operator. 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. 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. 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. 61 Shipping Costs and Competitiveness In Northern Mindanao . should provide the services to the shipping lines.

Cargo interplay is necessary due to the following: a. c. In addition to arrastre and lift-up/lift-off charges. most of the country’s cargo handling operators have deployed second hand container handling equipment. The low level of domestic cargo handling rates relative to freight. 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. drivers. Not enough RORO marshalling yards to store chassis mounted containers (without spacing. 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. Davao and North Harbor. If two or three vessels call at the same time. Similar to the trucking industry. Not all chassis mounted containers are withdrawn from the ships hold directly for delivery thereby limiting cargo handling interplay. Some shipping lines load the tractors to the vessel to serve the same function at its next port of call. From the RORO vessel. RORO operators are saddled with added cost such as fuel. b. 62 Shipping Costs and Competitiveness In Northern Mindanao . 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. 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. repair and maintenance and depreciation in operating terminal tractors and chassis. d. but this time in reverse order is performed by the cargo handling operator for containers for loading to vessel. Chassis are not registered with LTO and cannot operate outside port zone. MCC Transport. low revenue. one of the cost drivers related to cargo handling for RORO containers are Lift-up and Lift-off services. Chassis not designed for highway use (no brakes. Cebu. The same interplay. a forty foot chassis will occupy 30 square meters) for inbound/ outbound marshalling of RORO containers. Time element. Conventional container handling can stack containers at multiple tiers and thus save valuable port space.Aside from arrastre charges. Equipment reliability issues are common among these ports. ports will be congested. and high equipment cost. no signal & brake lights). This is the practice even for high volume ports like Cagayan de Oro. The inability of many cargo handling operators to procure necessary and suitable equipment can be attributed to low cargo volume. Not enough tractors to directly withdraw cargo to outside port container yard. e. a vessel with 200 TEU capacity would need about one hectare of marshalling yards.

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. Its argument is centered on the limited interplay model. Sasa port in Davao deployed seven brand new and one second hand unit of container reach stackers. Chassis landing leg failures are common occurrence even on land. However. Similarly. Trailer Horse and RORO/Pax Safety The trailer horse is a device which provides added support for loaded chassis lashed on vessel decks.17).5.16 and 2. the port of Cebu have ten units of old second hand rubber-tired gantry for its yards operation. Roro carriers do not employ this device which would assure that chassis and containers would not topple down in rough seas. 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.Due to higher foreign container volume. Figure 4. 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. which is more than what is needed to handle its container traffic had the units been new.2 Freight Quotations and Freight Rates 63 Shipping Costs and Competitiveness In Northern Mindanao . a brand new reach stacker cost Euro430. In the Philippines. Presently. Had their proposal saw fruition.6: Trailer Horse 4. 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. the cargo handling operators at these ports were able to afford the equipments from foreign stevedoring generated revenue (see table 2. it would have been the demise of domestic port modernization dreams of the PPA and further stunt the growth of the cargo handling industry.

Transport losses due to pilferage. whoever has custody of the container where the breaking of the seal occurred. preventing the shipping lines to accept other cargoes when their vessels are already laden in accordance with advanced bookings. containers with broken seals without owner’s presence are chargeable against truckers. deter pilferage and theft. empty container return or empty repositioning). Shippers pay whatever fees shipping lines charge for freight. Most shippers particularly those without the negotiating posture have accepted this as a fact of life. Any loss therefore. port operators and/or carriers. cargo hijacking. Over-booking is however. 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. 4.6 Trucking 4. Though complaints are common. such practices become necessary in the face of cargo security issues. However. 64 Shipping Costs and Competitiveness In Northern Mindanao .g. Empty backhaul and/or empty container repositioning does not allow the trucker the optimum use of transport assets. theft or cargo loss weight are the primary reasons for empty repositioning.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. shipping lines takes approximately one to two weeks to submit freight quotations. 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.6. terminal handling and various surcharges. 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 also limits the shipper’s ability to canvass for competitive rates and/or negotiate the same. shippers have not bonded together effectively to demand transparency by shipping lines. Some possible explanations for this phenomenon are the technical restrictions for some typical freight transport activities that cannot take return loads (e. This practice by foreign shipping lines has not provided shippers with enough flexibility as to timing and scheduling of exports. In addition. unavailability of cargo for backloads and time constraints. sealed containers cannot be opened without owner’s presence and thus. a custom by large shippers rather than small ones according to some foreign shipping line representatives interviewed.Freight rate setting has never been transparent. Primarily for added security.

They are less concerned of moving violations but rather on the correctness of vehicle registration and franchises. (See Annex 3. 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.6. commercial as well as Public Utility Jeepneys (PUJs) and taxi service and its confusing as to what applies where. Further recommending widening and/or geometry improvement on difficult road sections and intersections to enhance safety. Clearing roads of illegally parked vehicles. highway patrol officers are stationed at strategic points along the highway and act as checkpoints and where trucks are routinely flagged for inspection.Empty backhaul is however not an efficient way in trucking operations. It is filled with grammatical and construction errors. additionally road quality influences break downs which create congestion on roads. junk vehicles. The list is posted on the LTO website. Recommendation of improving road quality and separating trucking from motorbike. 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. pedestrian lanes. road markings. Improvement in road transport infrastructure will enable Northern Mindanao land transport operators to make significant improvements in vehicle utilization and productivity. illegal structures and other road frictions should be immediately implemented. Due to the agency’s “no approach” policy. Highway Patrol Local highway patrol units do not really patrol the highway. Together. and left turn pockets is recommended. some of the violations listed are vague and/or subjective and could be subject to abuse by apprehending authorities.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. Probably to save on fuel. Speeding up trucking will decrease transit time and increase supply chain quality. Installation of standard road signs. shippers and trucking providers must find ways to increase truck efficiency through backloads to further reduce trucking costs. These improvements will be reflected in significant increases in vehicle payloads and reduced transit times between production areas to vital transit points. Road safety is an issue with trucking.5) The lists lumps up violations for private. motorela. Inconsistencies 65 Shipping Costs and Competitiveness In Northern Mindanao . Trucks link the inland factories and agricultural production areas with the ports and airports and also play an important role for domestic distribution. The list is not only confusing. 4.

This policy has been a bane to truckers who have no idea what their axial loads are once loaded with containerized cargoes. 4.7. Cagayan de Oro port and MCT imposes compulsory weighing of outbound cargoes. Trucks are weighed before entering the city.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. 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.5 tons per axle.Ironically.7: Motorcab Similar to trisikads.) 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.1 DPWH-PPA Cargo Weight Policies DPWH mandates that vehicles shall have load limits of 13. lights. chassis numbers etc. Tablon. Such vehicles are not road worthy much less appropriate for highway use. 4.7 Harmony of Policies and Programs 4. They also slow down traffic flow along the Puerto. Inbound cargoes are presumed to be weighed at the port of origin. 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. along the national highway and sometimes passing the checkpoints are motorcabs (a local tricycle designed using 2 stroke engines with no transmission. Agusan and Bugo sections of the highway to the consternation of truck drivers and other legitimate motorists. Trucks from Cagayan de Oro going outwards are not weighed. alternators. 66 Shipping Costs and Competitiveness In Northern Mindanao . Figure 5. 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. 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.6.

Information on the Figure 4. Encourage the participation of the private sector in road infrastructure development. 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. e. Pursue consolidated efforts on the part of the DENR. d. Development Strategies To fast tract the development of the land transportation industry in Northern Mindanao. 67 Shipping Costs and Competitiveness In Northern Mindanao . d. charges and clearances required by implementing agencies. DPWH and DOTC to review existing laws/regulations dealing with legitimate transport permits and corresponding fees.9: MCT Weighbridges weight of containers is critical for proper stowage planning by carriers. b. c. Minimize the collection of illicit fees by using the media to expose cases of erring/corrupt government personnel. PPA weighs the whole truck. b. Consult transport service providers and players in identifying priority road and bridges for development. Institute public information and dissemination mechanisms on the procedures. c.5 tons per axle. A reduction in transactions costs in land transportation can be done through the following: a. Increase the region’s share of the total national road budget. DILG. DPWH and PPA should harmonize their load limit policies. Introduce immediate development on difficult and dangerous and high traffic density road sections. the following recommendations are given: a. deduct truck tare weights to determine container gross weight. Pursue an education campaign among members of truckers’ associations on awareness and compliance of required transportation permits. Organize truck operators/owners into a vigilant and unified association.Inconsistencies PPA on the other hand is observing ISO 1995 and allows 20 foot containers up to a maximum gross weight of 24 tons.

Mindanao goods shipped to Manila markets are assessed Value added tax on cargo handling. The value added tax. the only way for Mindanao products to be competitive is to lower down production costs e. shippers and transport operators pay higher fuel pump prices (PhP2. inputs and profit margins.8. Not only are some Luzon transport infrastructure and fare structure highly subsidized by government such as the Philippine National Railway. cargo handling and wharfage. 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.9 Value Added Tax Mindanao shippers are not only burdened by high freight rates.g. Moreover. Southern Tagalog Arterial Road among others are not assessed value added tax on their toll fees. BFAD and DENR. Legislation is Necessary 68 Shipping Costs and Competitiveness In Northern Mindanao . to produce goods that are not produced anywhere else. 4. It is therefore recommended to zero rate the value added tax for Mindanao freight. Better else. Competing under this unfair environment does not bore well for Mindanao.00 to PhP3. which affects prices for products and higher margins and better competitiveness of Mindanao products. labor. 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. Shippers also have to pay VAT on freight. Bureau of Customs. Mindanao producers. Security.f. inspections. certificates and other documentary requirements. wharfage and cargo handling of raw materials shipped to Mindanao such as animal feed ingredients. MRT and LRT. and wharfage at Mindanao ports. With this level of multiple taxation. 4.00 per liter) as fuel is also shipped to Mindanao and whose freight and handling is also subjected to VAT charges. This will translate into at least twelve percent savings. several regulatory agencies have not yet implemented this policy particularly BIR. they are also heavily taxed. the food basket of the Philippines. commercial users of North Luzon Expressway. locally produced or transshipped fertilizer and packaging materials keeping production costs high. South Luzon Expressway. permits. particularly on freight (a function of distance) has inclined the playing field against Mindanao shippers. vat on freight and again vat on wharfage and cargo handling at destination port.

that even regional offices.The removal of VAT on Mindanao cargo handling. Mindanao shippers are burdened by high freight.10 Freight Equalization Scheme Freight equalization through removal of Vat from sea freight of all commodities flowing to and from Mindanao. handling and VAT cost. Their information systems including their websites are not regularly updated. receive delayed updates by as much as a month after the issuance of new policies. and the markets for goods produced. wharfage. Timely Policy Dissemination Despite the technology. unlike their Luzon counterparts. Freight Equalization can assist in alleviating the comparative domestic freight cost disadvantage incurred by Mindanao products to markets.11. especially at field level. 4. 4. recognizing that. Freight equalization Scheme is a tool for Mindanao economic development in response to the underlying distance cost penalty. 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. neutrality in terms of access to transport infrastructure is essential. 5 BEST PRACTICES OF LOGISTICS PLAYERS 69 Shipping Costs and Competitiveness In Northern Mindanao . access to production inputs. Its objective is to provide Mindanao industries with equal opportunities to compete in Luzon markets. To achieve this. regulatory agencies including the Bureau of Customs has not provide timely dissemination issuances or policy updates especially for provincial areas. The rationale is for equitable treatment of industry with respect to domestic trade and specifically. wharfage and freight may be termed The Mindanao Freight Equalization Program.

1.2 Trucking Industry 5.2. EDI services are provided through a proprietary Value-added Network. BOC uses ASYCUDA ++ and provides for automatic payment and on-line release of goods to speed up cargo clearance.2.3 Customs Clearing 5. Direct Trade input through privately-operated network stations and a privately operated port based entry and encoding system.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. Though far from the ideal set-up. At present. 5.1 Water Brakes Northern Mindanao Truckers practically invented the “Water Brakes” for added operational safety. 5.5. the realities are not as what is intended. the terminal operator and PHIVIDEC Industrial Authority are housed. The introduction of ASYCUDA World will allow greater use of the Internet for submission of BOC documents. 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. For most cargoes. The purpose is to facilitate export processing for the convenience of shippers. 5. the MCT Terminal Building where most of the shipping lines.3.1 VASP (Value Added Service Provider) The Customs Modernization Act allows for electronic filing of customs documents. the time for cargo clearance will be reduced to only a few hours. 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. This will ensure that the brakes will hold once applied. the various one stop centers has alleviated some of the problems of shippers and has effectively shorten document processing time.e. and the One Stop Export Documentation Center located at the DTI Regional office operated by PhilExport-10A.1 Exports and Exporters 5. There is no discrimination of cargoes and truckers are willing to provide 24 hour trucking service with no additional overtime charges. regional heads of regulatory agencies delegating approving authorities posted at the venue). 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. The system of regulation for commodity clearances are yet to be institutionalized (i. 70 Shipping Costs and Competitiveness In Northern Mindanao .1 One Stop Processing Centers Although the concept of the “one stop” is literally a single venue with collective agencies to process documents.

5. 5. PPA and OROPORT security personnel also attended trainings and technical sessions on the ISPS Code security procedures and certification. At present the BOC applies selective enforcement through three physical inspection procedures: Green lane . 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.no inspection of cargo is done other than random sampling Yellow lane . Committed productivity rates shall not be lower than PPA contracted productivity standards.4. 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 requires cargo handling operators to respect employees’ rights to self organization and mandates it to recognize employees union for collective bargaining.3.100% 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.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.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.4.4.3 Labor Unions As part of its commitments. 5. Unlike in other areas where inspection sites are located outside of port zones.inspection of documents only Red section .Additional improvements should be realized as BOC develops its enforcement database and improves its risk management techniques. grievance handling and Labor-Management Councils (LMCs).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 71 Shipping Costs and Competitiveness In Northern Mindanao . 5.4 Port Management 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. 5.

The members meet periodically in order to advise PPA on prevailing port issues affecting the port’s various stakeholders. As of February 2010.1 Institutional Coordination 72 Shipping Costs and Competitiveness In Northern Mindanao .4. the VTS is fully operational and manned by qualified PCG personnel. major infrastructure projects implemented at the port are funded by PPA funds. After the completion of the Cagayan de Oro Port expansion project phase-2 funded by the International Bank for Reconstruction and Development (IBRD). 6. are plowed back to fund port infrastructure projects in the Cagayan de Oro Port. It effectively directs vessel traffic and minimize smuggling and enhance safety at the Macajalar Bay.lack of budget to operate the system.6 The Port Management Advisory Council (PMAC) This is a multi-sectoral organization solely for the purpose of addressing port issues. 5. 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. 5. WAY FORWARD 6.4.5 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. Quay Cranes and various cargo handling equipment were procured by the cargo handler as part its modernization commitments to PPA as required.

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

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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 74
Shipping Costs and Competitiveness In Northern Mindanao

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.

75
Shipping Costs and Competitiveness In Northern Mindanao

Implement controls on the outbound end of shipments. The processes must be rigorous: veterans of the customs trenches can tell you that it takes just one mischecked box to hold up valuable goods at a port. to make sure nothing appears in (or is missing from) the required paperwork. 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. and corruption in the clearance process. or in the shipping containers themselves. additional costs. 76 Shipping Costs and Competitiveness In Northern Mindanao .A cardinal rule for many exporter/importer working in difficult customs environments. that will give an opportunistic official the opening he needs to hold up the clearance. as it reduces the likelihood of delay. This approach also makes business sense.

ANNEXES 77 Shipping Costs and Competitiveness In Northern Mindanao .

Ms. Ms. Virgincita Lomoto (for Dir.Stated the objectives the session o to validate findings of the study o solicit comments and suggestions for the study . OroChamber Senior Trade & Industry Specialist. NEDA X OIC for Port Operations. 2010 Brewberry Café. Devt.1 PhlExport-10A Shipping Costs and Competitiveness in Northern Mindanao DRAFT STUDY PRESENTATION WITH LOCAL PARTNERS (a Validation Session) April 6. Mila Lasquites (for Dir. Michael Ignacio 16. Engr. PHIVIDEC Industrial Authority Senior Transport Specialist. BOC-CDO District Senior Specialist. USAID Transport Adviser. NEDA X Sr. Engr.Did the welcome. Rafael Paguio) 11. Abedin Macapasir) 4. PhilExport 10A District Legal Officer. LTO X Engineer III. introduced participants . Jerome Dela Rosa) 10. PhilExport-10A Technical Staff. Cagayan de Oro City Persons Attended Name 1. Estrella Luz R. Carmelita Bajarla (for RED Lealyn Ramos) 5. Mr. Peñaloza 7. Heidi Mendoza 13. Specialist. Pacampara (for Dir. Ms. Rema Romualdez Designation/Office/Org President. 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 . Pague (for Coll. Specialist. Devt. Roswald J. Amad 2. Atty. Venchito C. PhilExport-10A Exec.RFU 10 Chief Eco. Ms. LINC-EG. Wilson C.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 78 Shipping Costs and Competitiveness In Northern Mindanao . LINC-EG. Napol G. Ms. USAID Project Consultant. DTI-10 MBA. Jenneth Balaba (for Mr. Leon Dacanay) 6. Bullecer 3. Garcia (for Dir. Ms Lynn Sison 14.Presentation by Michael Ignacio (while the presentation was done. Mr. Director. Alicia Euseña) 12. DA . PhilExport-10A Session Highlights Preliminaries by Michael Ignacio . comments and questions were accommodated) o the study’s background. Mr. PhilExport 10A VP-External. Jaime H. J. Eco. Mr. Elvira Garcia (for Mr. Mr. Sulta Porcawa Dia) 9. Tan 15.ANNEX 1. Dante Clarito) 8. Ma. DPWH X Project Development Officer. Noel M.

its possible. but small exporters hooking-up with a large exporter for volumes might be disadvantageous for the large exporter. therefore expect for more to come. several queries on the problems of domestic shipping including the mention of the Cabotage Law. - - - - - - 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) 79 Shipping Costs and Competitiveness In Northern Mindanao . Tan explained that for as long as there is enough volume to negotiate. again has yet to fully complete the draft. o the project team. is it really that bad? o the project team has not yet fully completed the draft. its possible.query as to why transshipment by RORO is not an option for exports o Mr. he also showed how a particular shipping line would charge THC. Tan explained that for as long as there is enough volume to negotiate.000 for bribes while others pay more. o Mr. o Mr. Tan showed the activities involved on THC as well as the rates charged.Discussion Highlights (main discussions only) . but for small exporters to hooking-up with a large exporter for volumes. the rate might increase for the large exporter’s side. 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. thoroughly discussed the domestic shipping industry and why the costs are high comment as to why some exporters only pay php1. 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 again. query as to how come there’s not much of a best practice from Northern Mindanao and only issues. Tan thoroughly discussed the RoRo chain and the activities involved as practiced in the Philippines. therefore expect for more to come. (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.

and North harbor nor Cebu port do not have weigh bridges. Prepared and submitted by: Michael Joseph R. encouraging corruption .for DPWH & PPA to agree on weight capacities as they conflict. Ignacio Executive Director.On weigh bridges .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 . PhilExport-10A 80 Shipping Costs and Competitiveness In Northern Mindanao .Northern Mindanao very strict with outbound cargo but in-bound/imported cargo are not weighed upon arrival at the port.

2 Draft Study Presentation with Local Partners April 6. 2010 Brewberry Café.ANNEX 1. Cagayan de Oro City 81 Shipping Costs and Competitiveness In Northern Mindanao .

82 Shipping Costs and Competitiveness In Northern Mindanao .

83 Shipping Costs and Competitiveness In Northern Mindanao .

84 Shipping Costs and Competitiveness In Northern Mindanao .

85 Shipping Costs and Competitiveness In Northern Mindanao .

86 Shipping Costs and Competitiveness In Northern Mindanao .

87 Shipping Costs and Competitiveness In Northern Mindanao .

88 Shipping Costs and Competitiveness In Northern Mindanao .

89 Shipping Costs and Competitiveness In Northern Mindanao .

50% 51% .75% More than 75% 9. Evaluate the quality of infrastructure in use for your logistics operations (pls. Approximately what percentage of your company's outbound transportation logistics costs is associated with trucking logistics? Less than 10% 51% . specify: ______________________________________________________ 3. Average pre Month Php ____________ Total for 2009 Php_______________ 7. Do you outsource any of your company's trucking logistics functions? Yes ___ No ___ 10. Industry Sector Agri/Aquaculture Processed Food Wood/Furniture Industrial Other. pls. logistics costs are (please indicate per product.1 SHIPPER’S SURVEY QUESTIONNAIRE 1. How many trucking service providers does your company patronize? ______________ 13. check): Very high High Average Low Very low Ports Roads and Highway Warehouse Telecom infrastructure & services 14. (Php15M100M) Large (Php100M up) 5. Type of Business Production Trading Manufacturing/Processing Services Other (pls. Approximately what percentage of your company's outbound transportation logistics costs is associated with Sea Freight logistics? Less than 10% 10% . Overall. Business Size (total assets less land) Micro (up to Small (Php3MPhp3M) 15M) Med.ANNEX 3.25% 26% . Your Position in the company: ___________________________________________ 6. Do you use only one trucking company? Yes___ No___ 11. specify): ____________________________________________________ 4. Do you regularly canvass for the cheapest trucking rates? Yes___ No___ 12.75% 10% . specify product Ranking Cost Per Remarks of TEU here: Cost (Php) * Port charges are Trucking rates are Arrastre rates are Stuffing/Stripping rates are 90 Shipping Costs and Competitiveness In Northern Mindanao . include additional sheet if necessary): Cost Item (Pls.50% 8. Please provide your recent year’s (2009) transportation logistics costs incurred.25% More than 75% 26% . Company Address _____________________________________________________ 2.

over the past 3 years: Much Worse About Better Wo the rse Same 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 Bett er 91 Shipping Costs and Competitiveness In Northern Mindanao . Evaluate the effectiveness and efficiency of the following processes in your international Nearl y 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. 4: High. Evaluate the incidence on your activity of the following constraints in your logistics operation: Nearl Always Often Some Rarely Hardly y Eve ti r m es Delays due to pre-shipment inspection Criminal activities (e. stolen cargo) Solicitation of informal payments Alway s Often Some. 2: Low. 3: Average. Evaluate the evolution of the following factors in your country of work.Rarely time s Hardly Ev er 17.Cost Item (Pls.g. 5: Very High (Destination) 15. 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 Others. please specify * 1: Very Low.

How did you address these issues? a. Is there a difference for you whether your cargoes are shipped via a RORO vessel or via conventional container carrier? Yes___ No___ Why?_____________________________________________________________________ 29. Would you say that your export products are still competitive in foreign markets? Yes__ No___ Why?______________________________________________________________________ ___________________________________________________________________________ 24. There are only 3 foreign shipping lines servicing Northern Mindanao. __________________________________________________________________ 23. Would you say that your products sold in Cebu or Manila are still competitive? Yes___ No ___ Why?______________________________________________________________________ ___________________________________________________________________________ 20. __________________________________________________________________ c.Php___________ 20 footer dry . would that offer be an attractive option for your cargoes? Yes ___ No ___ Why? _____________________________________________________________________ 31.Php____________ 40 footer reefer . How much is your total cost to export last year? (Indicate Product_______________________________) 92 Shipping Costs and Competitiveness In Northern Mindanao .Php__________ Others. What do you consider to be the most important issues facing shippers today? a. 25. If a shipping line offer lower rates but will take more than 72 hours to get your cargo to Manila.Much Wo rse corruption Overall business environment Worse About the Same Better Much Bett er 18. Do you use only one shipping line exclusively? Yes ___ No ___ 27.Php_________ 20 footer reefer . __________________________________________________________________ c. __________________________________________________________________ 22. would more than 72 hours shipping time still be acceptable for your shipment? Yes ___ No ___ If no. would your annual volumes decrease? Yes ___ No ___ 21. For Cagayan de Oro to Manila shipment. __________________________________________________________________ b. __________________________________________________________________ b. If the average transportation rate you pay increased by 10% percent. How much is your current freight cost for your export cargo? (Indicate product: ____________________) 40 footer dry . How far is your plant/factory from the nearest port facility? ____Kilometers. is domestic transshipment a good option for you? Yes ___ No ___ Why? ______________________________________________________________________ 26. If not. why? ________________________________________________________________ 30. Would you say that your exported products are still competitive? Yes___ No ___ Why? ______________________________________________________________________ ___________________________________________________________________________ 19. do you canvass for the lowest freight rates? Yes ___ No ___ 28. please specify packing type & cost_____________________________ 32.

Regionally (< 750 kilometers) 37.Php__________ Others. How are your export goods transported? FOB___ 3. What made it decide to employ more women? _________________________________________________________________________ Tasks assigned in this level? 1: Supervision.Php___________ 20 footer dry .40 footer dry . Globally CIF___ Others (specify) ___________________________________________________________________ 38. indicate commodity __________________) 40 footer dry .1. please specify packing type & cost_____________________________ 34. where are the majority of your customers located? (encircle one.g. Employment Profile of the Company/Business Level/Division/ Present number How many are Function of workers women workers? Management Operations Marketing Finance/Admin. Who nominates the carrier? Buyer ____ Spot Market ____ Others (specify) ___________________________________________________________________ 39. please specify packing type & cost_____________________________ 33.Php__________ Others. Manila)? (Pls. Nationally 4.2.3.) 1. 3:Clerical Men Women 1 2 3 1 2 3 93 Shipping Costs and Competitiveness In Northern Mindanao . If VAT is to be removed from shipping freight (only).Php_________ 20 footer reefer . Has the ratio of women to men workers always been the same? Yes___ No___ 39. Geographically.Php____________ 40 footer reefer . IF NO: When did the company or business begin hiring more women? (Year)_________ 39.Php___________ 20 footer dry . Others (specify) 39. would that help your business be competitive? Why?______________________________________________________________________ ___________________________________________________________________________ 36. 2: Operations. How much is your current freight cost for your domestic cargoes (e.Php_________ 20 footer reefer . How does the Value Added Tax (VAT) on freight affect your business? ___________________________________________________________________________ ___________________________________________________________________________ 35.Php____________ 40 footer reefer . Locally (< 200 kilometers) 2.

1 2 3 4 Bureau of Quarantine 2. specify) 1. Does your company use your imported commodities as materials for export? Yes __ No __ If so. specify): ____________________________________________________ 4. 1 2 3 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 94 Shipping Costs and Competitiveness In Northern Mindanao . pls. specify: ______________________________________________________ 3. 1 2 3 4 1. ___________________________________________________________________________ ___________________________________________________________________________ 8. Business Size (total assets less land) Micro (up to Small (Php3MPhp3M) 15M) Med. 1 2 3 4 Industry 2. What are the problems encountered with drawback procedures? Please enumerate if any. 1 2 3 4 Bureau of Customs 2. 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 2. 1 2 3 4 1. Industry Sector Agri/Aquaculture Processed Food Wood/Furniture Industrial Other. 1 2 3 4 Arrastre Service 1. 1 2 3 4 2. 1 2 3 4 Port Authority 2. do you claim duties drawback? Yes ___ No ___ 7.2 IMPORTER’S & FORWARDER’S SURVEY QUESTIONNAIRE 1. 1 2 3 4 BIR 2. 1 2 3 4 Bureau of Plant 1. 1 2 3 4 1.ANNEX 3. (Php15M100M) Large (Php100M up) 5. Business importing goods from outside the country for sale Freight Forwarding/Logistics Shipping/Shipping Services Customs Broker/Customs Agent Other (please specify): 6. 1 2 3 4 Provider 2. 1 2 3 4 1. Business importing goods from outside the country for processing Phil. Company Address: ______________________________________________________________ 2. 1 2 3 4 Others (pls. Type of Business Production Trading Manufacturing/Processing Services Other (pls. 1 2 3 4 DENR 2. 1 2 3 4 1. Please tick one Phil.

Trade Associations or direct response to formal government consultations) Yes ___ No ___ 17. 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. 1 2 3 4 4.g. Within the last 12 months. encircle CDO Port: 1 2 3 4 MCT: 1 2 3 4 Other Ports: please name the port(s) below 1. which cost component has the biggest contribution to your total import cost? Please rank with 1 being the highest Activity Rank Est. Does someone in your company participate in consultations on regulatory matters (e. we try and get the goods out of the port as quickly as possible No 14. Customs consultations. through port user groups. 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. 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 95 Shipping Costs and Competitiveness In Northern Mindanao . Does your company use the VASP (spell out) to submit information electronically to customs systems? Yes ___ No ___ If yes. aside from the cost of the commodity imported. 1 2 3 4 2. In the majority cases.9. In importing. what are the advantages enjoyed with the system? ____________________________________________________________________ ____________________________________________________________________ 11. 1 2 3 4 10. please rank the ports per cost. Does your company encourage formal training related to import procedures? Yes ___ No ___ 18. 1: cheap 2: reasonable 3: expensive. does your company use other ports to import? Yes __ No __ If yes. Are you able to predict the time it takes to clear goods through the port? Yes ___ No ___ 13. Other than CDO Port and MCT. Would it be possible for you to clear goods through the port within 24 hours of the ship's arrival? Yes ___ No ___ If yes. 4: very expensive. pls. please specify your expediting practice(s) and any additional cost(s) incurred: Practice(s) Cost (Php) 12. 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 Others (please specify) BIR ___________________________ 16. 1 2 3 4 3.

19.3. Employment Profile of the Company/Business Level/Division/ Present number How many are Function of workers women workers? Management Operations Marketing Finance/Admin. 3:Clerical Men Women 1 2 3 1 2 3 96 Shipping Costs and Competitiveness In Northern Mindanao . 2: Operations. Has the ratio of women to men workers always been the same? Yes___ No___ 21. Others (specify) 21. which you would like to share? Please outline: ______________________________________________________________________ ______________________________________________________________________ 20. IF NO: When did the company or business begin hiring more women? (Year)_________ 21.2.1. What made your company decide to employ more women? _____________________________ Tasks assigned in this level? 1: Supervision. Your Position in the company: _____________________________________________________ 21. Is there any other information relating to trade procedures that have effected your inward supply chain operations.

How far is the average distance do you provide trucking service? ____________________ 8. Are your trucks? Brand New Surplus YES NO 7. Do you give discounts for cash transaction? 97 Shipping Costs and Competitiveness In Northern Mindanao . Please rank according to cost contribution. What exactly is hauled? For Hire Nor for Hire Mixed Containerized General Cargo/Break-bulk Commodities: _____________________________________________________________________ 5. Company Address: ______________________________________________________________ 2. Cargo/Break-bulk Containerized Php ____________ Php ____________ 11. For containerized hauling.ANNEX 3. Do you have any fuel efficiency programs? 13. Driver and helper’s Salary c. Will it be beneficial if shipping lines establish an Inland Container Yard in Valencia. What is your average waiting time for loading? ________________________________________ 15. Insurance and inland marine h. Items Rank Percent to Operations a. Repairs and Maintenance j. Road Bribe m. Weigh bridge Informal costs l. Business permits & Vehicle registration b. 1 being the highest. Franchise fee and regulatory permits e.3. Your prevailing trucking rate per kilometer? Gen. what is the common practice? Van Out ____________ Stuffing @ Shipping Co. Business Size (total assets less land) Micro (up to Php3M) Small (Php3M-15M) Med. please explain why:_______________________________________________________ 19. Port Bribe Yes No 14. Your trucking operation’s major costs. CY/Port CY___ 17. Garage g. indicate number of units) Prime Mover ______ 10-Wheeler _____ Wing Van ______ 6-Wheeler________ Other (Pls. Fuel f. Type of Registration 4. Any backloads? 9. TRUCKER’S SURVEY QUESTIONNAIRE 1. What kind of trucks do you use? (pls. What is your average waiting time for unloading? ______________________________________ 16. No. Are you paid for empty van positioning/repositioning? 18. specify) ___________________________________________________ 6. Oil and lubricants i. Tires k. What is the percentage of your backload? ______% 10. Bukidnon? If yes. Are you paid in cash for your trucking services? 20. (Php15M-100M) Large (Php100M up) 3. Financing cost d. What’s the percentage increase of your trucking rate for the last 5 years? _________________________ 12.

What are your recommended solutions to improve road conditions in these areas? . ________________________________________________________________________ 30. d. What are your recommended solutions to improve road conditions in these areas? . Your top 5 road sections most difficult to traverse: Road Section a. Bukidnon Lanao. a. how much?______%? 21.Expensive solution:________________________________________________ . Are you paid for empty container returns? 24.Expensive solution:________________________________________________ . ________________________________________________________________________ d. Iligan. b. Are you paid demurrage? If yes. Do you assign dedicated trucks to regular customers? 26. e. do you allow credit? 22.If yes. c. For regular clients. What is the state of highway traffic along your routes? Please check Destination Free Light CDO MCT Flo Tra Origin ffic win g Bukidnon (via Sayre Highway) Talakag. Your top 5 most accident prone areas. West Misamis Oriental Eastern Misamis Oriental Heavy Traffic 98 Shipping Costs and Competitiveness In Northern Mindanao . how much _________ % of trucking rate per day? 23.Low cost solution:_________________________________________________ 29. Why difficult? 28.Low cost solution:_________________________________________________ 31. ________________________________________________________________________ e. How would you consider prevailing trucking rates? Expensive____ Fair____ Cheap____ Why? Please explain ____________________________________________________________ 25. ________________________________________________________________________ b. 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 ( ) Lanao del Norte ( ) Camiguin ( ) Misamis Occidental ( ) Bukidnon Please explain: ____________________________________________________________________ _________________________________________________________________________________ 27. 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. ________________________________________________________________________ c.

West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Highway interferences w/ school crossings. Bukidnon 1 2 3 4 5 Lanao. Iligan. commercial centers Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag. 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. 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 99 Shipping Costs and Competitiveness In Northern Mindanao . 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.Puntod Bridge* Julio Pacana (Licoan) Gaabucayan Road *: on the assumption that the CDO 3rd Bridge (Kauswagan-Puntod) is operational 35. Iligan. Bukidnon 1 2 3 4 5 Lanao. 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. Bukidnon 1 2 3 4 5 Lanao.33. 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 1 2 3 4 5 (height) Truck ban restrictions on movement of 1 2 3 4 5 large and heavy trucks 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. encircle) Please describe the location 1: not a problem 5: very serious problem Highway Congestion Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag. If traffic and road conditions are improved. number 1 being the highest. public markets. What is the state of city traffic along your routes? Origin Destination Free Flowing Light Traffic Puerto CDO Port Puerto MCT Bulua CDO Port Bulua MCT Heavy Traffic 34. Iligan. Road Rank Road Rank Agora Road (Valenzuela Street) Corrales Extension Sergio Osmeña Extension Kauswagan . Iligan. Bukidnon 1 2 3 4 5 Lanao.

Less More profitable No change in business will be: profitable profitability 43.36. e.2. d. e. What made your company decide to employ more women? _____________________________ Tasks assigned in this level? 1: Supervision. a. where are the majority of your customers located? (please check) CDO Bukidnon Iligan MisOr Mla/Ceb 39. 2: Operations. ________________________________________________________________________ b. d. Do you operate your own garage? Yes No 41. Has the ratio of women to men workers always been the same? Yes___ No___ 47. c. How long (in months) have you been in this position? _________________________________ 38.3. how may are rented? ________ Yes No 40. Do you own all your trailers? If no. Geographically. Plans of expanding you’re trucking operations? Yes No 42. ________________________________________________________________________ 46. ________________________________________________________________________ c. c. IF NO: When did the company or business begin hiring more women? (Year)_________ 47. In the next 3 years. b.1. What is your title at your company? _______________________________________________ 37. 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. Others (specify) 47. Your top 5 current problems in the port you encountered lately: CDO Port Mindanao Container Terminal a. 3:Clerical Men Women 1 2 3 1 2 3 100 Shipping Costs and Competitiveness In Northern Mindanao . Your Position in the company: _____________________________________________________ 47. Employment Profile of the Company/Business Level/Division/ Present number How many are Function of workers women workers? Management Operations Marketing Finance/Admin. 44. b.

Vessel 10-FD Type of Service1 20-FD 40-FD 20-FR 40-FR Tariff Table or Lease Rate (Php) Published Discounted 1 2 3 4 5 1: 10 footer (FCL Dry).4 SHIPPING LINE’S SURVEY QUESTIONNAIRE 1. 40 footer (Reefer) 7. Vessel Information: 1 ( ) Foreign Liner MCT ___ CDO Port ___ Vessel Type Route Origin-Destination (via) Call Frequency Weekly Monthly Ave. Company Address ( in CDO): ________________________________________ 2. 40 footer (FCL Dry). 2: slight problem. 3: manageable problem. of Units 6. How many ships do you have calling at: 4. 4: Bulker. Load Factor (%) 5. Vessel Capacity Vessel 1 2 3 4 5 TEU Reefer Plugs Ship Gear Type No. 20 footer (FCL Dry).ANNEX 3. 5: Others Ave. Port Time Direct Service Yes No 1 2 3 4 5 1 Please indicate: 1: Conventional Containerized. Are any of the following conditions present for freight shipments? Please check for ranking conditions 1: not a problem. 4: really a problem. 3: Conventional. Please Provide the Cargo Tariff/Lease Rates. 20 footer (Reefer). 2: RORO. Service (pls. check ): ( ) Domestic Liner 3. 5: very serious problem Conditions 1 2 3 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 4 5 101 Shipping Costs and Competitiveness In Northern Mindanao .

specify) 5 Cost (Php) Remarks 9. 2:low. 3: average. Your vessels are currently charged berthing dues based on GRT per day. 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. Have your vessels experienced delays in berthing? Yes___ No___ Vessel type: _____________________________________________________________ Why?__________________________________________________________________ 10. 4: really a problem.Please check for ranking conditions 1: not a problem. 5:very high Cost Item 1 2 3 4 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. 4: high. 3: manageable problem. If your vessel arrived at 10PM and departs at 6AM the following day. 2: slight problem. Your position in the Company: ____________________________________________________ 102 Shipping Costs and Competitiveness In Northern Mindanao . Does your company deem it necessary to operate your own container yard? Yes___ No___ Why?__________________________________________________________________ 14. are you charged an equivalent of two days port dues? Yes___ No___ 13. Please provide information on costs in the table below? Please Check for Ranking of Costs 1:very low. 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. do you find this system appropriate? Yes___ No___ 11.

Has the ratio of women to men workers always been the same? Yes___ No___ 17. 3:Clerical Men Women 1 2 3 1 2 3 Management Operations Marketing Finance/Admin. IF NO: When did the company or business begin hiring more women? (Year)_____________ 18. Employment Profile of the Company/Business Level/Division/ Function Present number of workers How many are women workers? Tasks assigned in this level? 1: Supervision.15. What made it decide to employ more women? ____________________________________________________________________________ 103 Shipping Costs and Competitiveness In Northern Mindanao . Others (specify) 16. 2: Operations.

ANNEX 4.1 MAERSK LINES THC TABLE 104 Shipping Costs and Competitiveness In Northern Mindanao .

000. Driving without License 1.000.suspension of plates. Violations in Connection with Number of Plates 18.000. 14. Operating /allowing the operation of MV with a suspended / 1.00 .00 24.00 105 Shipping Costs and Competitiveness In Northern Mindanao .000.if the driver is also the processor of the subject motor vehicle .00 of driver’s license .00 8. in addition.000.00 Failure to carry Driver’s License 200.000. 4. 1. engine block or chassis . Allowing an unlicensed/improperly licensed person to drive motor vehicle.00 500.000. the MV shall not be allowed to operate by the confiscation of its plates.000.00 13. Driving under the influence of drugs 10.00 10.00 .00 Consent of the owner/operator 4.000. Student driver operating a MV without being accompanied by a Licensed driver 500. Tourist operating or allowing the use of non Philippine registered 5. after 3rd offense automatic revocation of driver’s license 7.00 Failure to sign Driver’s License 200.00 200.00 .00 Driving without delinquent of expired license 400. Operating a motor vehicle with unregistered substitute or 5. 3.in addition to the original suspension the said MV and plates shall further be suspended for two (2) years.and two (2) months suspension of driver’s license 5.for subsequent violations after the 2nd offense 7.000.if the drivers has been issued an authentic license.00 Motor Vehicle beyond the 90 day period of his sojourn in the country.if committed by the driver without the knowledge and 2.00 16.00 2. 6.000. 2.for the 2nd offense and three (3) months suspension 6. . 5. License plates different from body number on Public Utility MV 21.000.00 and six months suspension of driver’s license. Unlicensed conductor of a motor vehicle for hire 500.500.00 . the same shall be suspended for one (1) month. Operating/driving a motor vehicle which is unregistered/ improperly Registered . 17. OR & CR until properly registered.000.the subject MV shall be impounded and its plate held during the suspension .if the driver has not been issued an authentic license. Display/Use of an expired commemorative plates or stickers 23. tampered/ marked plates or stickers 2. Improper display of a motor vehicle permanent plate 22.000.00 500. Possession and use of fake/spurious Driver’s License 2. Obscure plates 20.2 LTO FINES AND PENALTIES FINES/PENALTIES FOR TRAFFIC AND ADMINISTRATIVE VIOLATIONS: APPROVED RATES Violations In Connection With Licenses 1. Illegal transfer or use of MV regularly issued MV plates. 5.00 12.00 11.000. registrations and Driver’s License for 2 months 9.ANNEX 4. Failure to carry certificate of registration or official receipt of registration 150.00 revoked Certificate/Official Receipt of registration.000. Conviction of the driver of a crime using a motor vehicle 3. 10. Motor Vehicle number plates not firmly attached 19.00 Driving with suspended or revoked or improper license 1. he shall be disqualified. it shall be suspended for 1 year in addition to the fine . tags or stickers except security plates on authorized Motor Vehicle .Owners/Operators are conclusively presumed to have 200.00 replacement engine.the subject MV shall be impounded until such parts are properly registered 15.000. if the driver is a holder of local driver’s license. to secure a Driver’s License for a period of two (2) years.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.00 Driving under the influence of liquor.

00 500.00 150.000.if the MV with illegal transferred plates or stickers in used In the commissions of a crime.00 500. tail. Dirty or unsightly or unsanitary MV 300.00 200. Non painting of business or trade name . Defective Brake 500.00 200.to be imposed upon the owner/driver 47. Failure to install EWD 4 meters from the front rear and of the stalled motor vehicle .00 31.to hold plates until defect is corrected 36. Use of unauthorized improvised plates 37. Failure to carry Early Warning Device (EWD) 48.00 33. Without or defective windshield wiper . Operating MV with metallic tires in any public high ways 5. . its owner shall suffer the penalty of 12. Trucks For Hire. Without rear view mirror .00 fine and suspension of plates and registration certificate and Official Receipt for two (2) years Violations Relative to Equipments. Without name or business name and address of operator inscribe . Operating motor vehicle without head. Failure to paint or improper painting of authorize route or PUJ Filcabs.000.00 26.to hold plates pending correction of defect 38. Without interior light . Parts.00 500. Devices and Markings of Motor Vehicle 25.to hold release of plates until defect is correct 34. Without red flag or red lights on projecting end of load extending more than a meter beyond the bed or body.00 200.00 27.Drivers of MV involved in illegal transfer of plates. Improper/Defective Horn or signaling device 300. Use or installation of unnecessary lights in front and rear of a Motor Vehicle 29.00 32. 46. Without muffler (should insert windshield) 150.00 300.to be imposed upon the owner/driver 49.00 200.Committed the illegal transfer.to be imposed upon the owner/driver 500.00 300. Taxis and similar for For Hire Motor Vehicles operating with fixed routes. Without or defective hand brakes .00 30. Shuttle Services. Failure to paint plate number on a motor vehicle for hire .00 300.00 200.00 .00 500. siren or exhaust whistle . plate and/or brake lights 300. Without Capacity marking .00 500.to hold plates pending correction of defect 39. sticker shall suffer the suspension of their Driver’s License for three (3) months . Accessories. .to hold plates pending correction of defect 40. Unauthorized use of bell.forefieture of the said gadgets in favor of the government 44.to hold plates pending correction of defect 42.000.00 15. and in the evening red lights visible at least 50 meters away.to hold plates pending correction of defect 41. Without or defective speedometer .to hold Plate or OR/CR until defect is corrected 43.00 106 Shipping Costs and Competitiveness In Northern Mindanao .to hold plates until defect is corrected 35. Dilapidated or defective MV 1.00 375.000. Without wiper 150. Without functional spare tire 45.00 28.

Use/installation of a glaring/stainless object upon at the front and/or rear of a motor vehicle . The penalty shall be waived for loads exceeding the registered GVW by a tolerance of less than 5%. 57. dancing lights or similar lights .to be imposed upon the owner 54. .to be imposed upon the owner Weights and Load Limits 55. Or the vehicle load exceeds 150% of the maximum allowable gross weight.00 6. Use or installation of heavily tinted colored/painted windshield or or window glass . Baggage or freight carried on top of truck exceeds 20 kgs.00 600. painted windshield or colored windshield.00 600. No motor vehicle shall exceed thirteen thousand five hundred (13. 000.000. Without permanent tail gate with inscription “Not for Hire” sign in a private jeepney/jitney . revocation of registration and forever banned from applying for a franchise and/or revocation of franchise if franchise holder 600.to be imposed upon either the driver/operator or conductor 58.00 300. Out of line For Operators/Owners: 1st Offense & addt’l P1.00 300. Operating a passenger truck (bus) with cargo exceeding 160 kgs. strobe lights.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. 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 60.50.00 per day reckoned from the day of apprehension until the case was settled. Allowing more passengers and/or freight or cargo in excess of carrying capacity of MV 59. Installation of dim/colored lights.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 P2.00 500. Load extending beyond the projected width without permit .00 107 Shipping Costs and Competitiveness In Northern Mindanao .to be imposed upon the driver 56. 500. vehicle weight. 500.to be imposed upon the owner/driver sunvizor or light tinted are allowed 53.500) kgs. Axle overloading – an amount equivalent to 25% of MVUC at the time of infringement on owner/operator or driver of trucks and trailers for loading beyond their registered gross weight.00 300. Unauthorized installation of jalosies.to be imposed upon the owner/driver 51.to be imposed upon the owner/driver of the motor vehicles 52.00 500.00 500.

00 750.00 250. CR for six (6) months for driver for operator 3.000.00 2.00 6.For Drivers: 1st Offense & suspension of DL for three (3) months 2nd Offense & suspension of DL for six (6) months 3rd Offense & suspension of DL for one (1) year 61.000. during emergency cases is allowed.00 4. Operating a motor vehicle with expired franchise (CPC) Driver Operator/owner/possessor of MV per day from the date of expiry to the date of the CPC .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. revocation of registration and forever Banned from applying for a franchise and/or Revocation of franchise if franchise holder For Drivers: 1st Offense & suspension of DL for three (3) months 2nd Offense & suspension of DL for six (6) months 3rd Offense & suspension of DL for (1)year 62.000.000. 2nd offense and suspension plates. 000.00 500.00 6.00 6. Operating or using a For Hire Motor Vehicle different from its types of services mentioned in the CPC for driver 1.00 500.00 for operator .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 & addt’l P2.00 500.the plate.00 750. 500.000.000.00 1.000. Colorum operation For Operators/Owner: 1st Offense & addt’l P1. OR. 500.00 250. OR/CR of the subject MV shall be suspended For six months from the date of apprehension to the fines 63.For Hire Motor Vehicles used by the members of the family of the operator.00 per day reckoned from The day of apprehension until the case was Settled.000.00 108 Shipping Costs and Competitiveness In Northern Mindanao .

Misrepresenting a copy of a document pertinent to a motor vehicle Before the Traffic Adjudication Service.the operator shall also be liable for equal fine if found to have Participated thereto and the plate. within an intersection b.00 5. on the roadway side of any unmoving or parked MV at the curved way of the highway 200.00 1.to be imposed against the driver aside from the penalty. Employing insolent. Unauthorized use of commercial or trade name .00 to 4.00 Breach of Condition of Franchise and Related Violations 64. Unreasonable refusal to convey passengers . Frauds and Falsities 72. .00 1.000.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.000. 71. 70. The license of the driver shall be suspended for two (2) months.for subsequent offenses and suspension of DL. OR/CR of the subject MV shall be suspended for three (3) months.for each subsequent violation the license of the driver or conductor and/or the plate.000.for the driver or the conductor as the case maybe and suspension of conductors license for two (2) months .500. Overcharging/Undercharging of fare . the place.00 109 Shipping Costs and Competitiveness In Northern Mindanao . discourteous drivers and conductors .00 500. OR/CR for one (1) year for driver for operator 3.00 600.to be imposed against the owner/operator/possessor of MV 65.00 750. 4 meter from the driveway entrance d. within 5 meters of the intersection c.to be imposed against the operator 69. within 4 meters from afire hydrant e.00 500. Non – issuance of fare ticket for operator . Breach of Condition in the CPC except when already penalized under any provisions of this circular. OR & CR shall likewise be suspended for two (2) months.000. in front of a private driveway f.to be imposed upon the driver or owner Traffic Violations 74. .to be imposed against the operator and the conductor for conductor 68. Use of fake plates/stickers/pursuant documents . Parking a. Undue preference or unjust/unreasonable discrimination against the passenger . plate.00 400. 500.00 500.000.00 375. If the operator has knowledge or consent to the infraction committed.00 2.00 1. 73. 67.to be imposed upon the owner and/or driver of the subject MV. OR/CR for the same period Stated above. Discourtesy of drivers and/or conductors towards the passengers in addition to the suspension of conductor’s/driver’s license for (2) two months 66.

00 2. at any place where signs of prohibitions have been installed. Failure to yield the right of way – failure of a vehicle approaching but not having 1. Disregarding Traffic Signs (Should be “failure to observe traffic signs and signals”) b.00 1. Increasing speed when being overtaken – increasing the speed of the motor vehicle before the overtaking vehicle has completely passed. 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. Failure to provide canvass cover to cargos or freight of trucks requiring the same d. Reckless Driving 1st Offense 2nd Offense .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.00 5. 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. 500. 000. 75. 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. Driving against traffic – failure to pass to the right when meeting persons or vehicles coming towards him j. n. Driving For Hire motor vehicle in slippers g. 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.and suspension of DL for six (6) months Succeeding offense . m. t.and revocation of DL Such as but not limited to the following: a. u. s. Hitching or permitting a person or a bicycle. Overtaking at any railway grade crossing – overtaking or passing another vehicle proceeding in the same direction at any railway grade crossing. 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. tricycle or skate roller to hitch to a motor vehicle i. v. Failure to dim headlights when approaching another motor vehicle f. w. 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. p.00 110 Shipping Costs and Competitiveness In Northern Mindanao . Allowing a passenger to top or cover of a motor vehicle except in a truck helper c. Overtaking when left side is not visible or clear of oncoming traffic . 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. Permitting passenger to ride on running board. 000. Failure to yield the right of way – failure of the vehicle on the left to yield the right intersection at approximately the same time. motorcycle. x. Driving in a place not intended for traffic or into place not allowed for parking h. 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. Overtaking at an unsafe distance – failure to pass at a safe distance to the left of another motor vehicle when overtaking that vehicle.and suspension of DL for two (2) months 3rd Offense .g. stepboard or mudguard of MV while the same is in motion e. 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. 000. q.

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. a. 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. a. stopping or turning into a direct line. y. Failure to give proper signal – Failure to give the appropriate signal before starting. to keep as close as possible to the right hand curve or edge of the highway.f. Upon determination That he is also liable for the said infraction.h. to approach such intersection in the lane for traffic to the right of and nearest to the center line of the highway. a. Failure to yield the right of way to ambulance. Tampered. In turning.000.and suspension of DL for six (6) months. a. Illegal turn – failure of the driver of a vehicle intending to turn to the left. fake or altered meter seal. reconnected. Defective or non operational. 3rd Offense DL will be revoked and franchise will be recommended for cancellation 3. 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. Unsafe towing 76.b.000.d. 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. 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.00 6. 78. a. broken. 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. Tampered. to pass to the left of the center of the intersection except upon highway laned for traffic and upon one-way highway. broken.c.00 200. Obstruction – obstructing the free passage of other vehicles on the highway while discharging or taking passengers or loading and unloading freight. 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”. Tampered. a.000. a. Fast. Two (2) months for the 2nd offense and three (3) months for the 3rd offense . z. 500.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. 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. and turning .to be imposed upon the driver or owner whoever maybe responsible.and suspension of DL for four (4) months 2nd Offense .g.00 4.and suspension of DL for three (3) months 1st Offense . . joint. the operator of the subject MV shall be summoned. OR/CR of the MV shall be suspended for one month for the 1st offense. 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.00 111 Shipping Costs and Competitiveness In Northern Mindanao . the plates. fake or altered sealing wire .after third violation Dl will be revoked and franchise 1. a.e.00 For the said infraction. The License of the driver or the plate.a.

Failure to paint the word “Aircon” . Smoke Belching define under RA 8479 .00 500. adaptation of MV color or design without authority .for 3rd and subsequent offenses and to pass the smoke Emission test and to suspend of plates.00 1. Unauthorized installation of aircon on buses 90.00 750.00 500. Allowing child six years old and below on passenger seat 97.to be imposed upon the owner/operator or driver Other Non – Traffic Violations 89.for the 2nd offense and to pass the smoke emission test . 84. Display of sign board (PUB & PUJ ONLY) without front panel route 750. 000 .to be impose against the operator/owner and driver 85.00 250.to be impose upon the and/or driver 81. Failure to Install Seatbelt as defined under RA 8750 95. Non painting of the word aircon for buses 91.for the 1st offense and to pass the smoke emission test .00 1.to b impose upon the driver and/or owner 88. The License of the driver shall be suspended For forty five (45) days 82. Flagged up meter and/or operating on contractual basis . type of service on taxi units . Operating a right hand drive motor vehicles 94. 400. address and/or Capacity markings.000.00 500. No taxi Meter .00 750. 000. CR/OR/ Registration of MV for one (1) year 93.00 500.00 1. Failure to wear/unbuckled seatbelt 96.00 50.00 200.00 1. 79. No Identification Card 86.00 750.00 200. 000.to be imposed against the driver & the total amount of .00 250. 200.00 500.to be impose upon the owner 80. Failure to provide top light indicating availability .00 2. No Taximeter light 87.to be impose against the operator / Owner only. 000. Unauthorized installation of Aircon .to be imposed against the operator The total amount of 83.to be impose against the driver. Violation of color scheme.Will be recommended for cancellation.00 150. 200.00 Copyright © 2009 Land Transportation Office LTO Website Comments: 112 Shipping Costs and Competitiveness In Northern Mindanao .00 3. Failure to print owner/operator’s name. Operating aircon MV with defective aircon 92.00 750. Old meter seal/or loose triplex seal .00 5.

road marking violations. motorcycle without helmet. etc. driving under the influence resulting in injuries.). trucks with no running lights. tailgating. failure to pay traffic fines within a specified period. etc. Bus and Taxi.No fines for overspeeding. fleeing the scene of an accident (hit and run). signals. hit and run resulting to injury. parking on wrong side of road. plates and tags. failure to report an accident involving damage to property. double listing. . counter flow violations. stopping on pedestrian lanes. 113 Shipping Costs and Competitiveness In Northern Mindanao . hit and run with fatality. Recommendations: Review and re categorize violations into General violations (licensing. red light on front of vehicle. etc. illegal u-turn. beating the red light. speed limits. inconsistent fines. Some violations are subjective and may result to different interpretations. parking on crosswalks. Heavy Cargo and articulated Vehicles. etc. DUI. construction and grammatical errors. green light at rear of vehicle. PUJ. Moving violations. lane violations. diplomatic exceptions. entering a no entry zone.. Commercial vehicles. over width mudguards. tridem on motorcycle. driving under the influence resulting in fatalities. ambulance and fire trucks. no reflecting lenses. double parking. no side mirrors. violations and traffic signs. The foregoing document is riddled with vague description of violations.

nor against war. verifies its authenticity. collision. Usually prepared by the shipper on forms issued by the carrier. pilferage.Is the place beside a pier. such as decay. germination. and a receipt for goods. Cargo .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 . but not against innate flaws in the goods.Is a clause included in marine insurance policies to cover loss and damage from external causes. nor against faulty packaging.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. quay or wharf where a vessel can be loaded or discharged CAD .Is a receipt of cargo for shipment by a consolidator (used in ocean freight).Break-Bulk Cargo BFAR – Bureau of Fisheries and Aquatic Resources of the Department of Agriculture Berth Liner Service . B/B .Bureau of Customs Bonded Warehouse . contract of carriage.Cargo handling. strikes. Also see Air Waybill and Ocean Bill of Lading.The acronym meaning "cash against documents. Cargo Receipt . port side Authority (formerly the Bureau of Coast and Geodetic Survey) Authority to Load . Bill of Lading .Bureau of Internal Revenue BOC . BIR . 114 Shipping Costs and Competitiveness In Northern Mindanao . such as fire.A phrase referring to the side of a ship. Alongside . BPI .A warehouse storage area or manufacturing facility in which imported goods may be stored or processed without payment of customs duties.Is a regular scheduled steamship line with regular published schedules (port of call ) from and to defined trade areas Berth or Liner Terms . 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. improper packing/ loading or loss of market.Bureau of Plant industry Berth . etc.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.Is an expression covering assessment of ocean freight rates generally implying that loading and discharging expenses will be for ship owner's account. (See All Risk Insurance). riots and civil commotions (See Marine Insurance) All-Risk Clause .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." 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. it serves as a document of title. Arrastre . and forwards the original letter of credit to the exporter without obligation to pay All Risk Insurance .Is an insurance provision that all loss or damage to goods is insured except that of inherent vice (self caused). 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.Is merchandise/commodities/freight carried by means of transportation.

With the 'C' terms this is NOT the case. As an INCOTERM risk passes from the seller to the buyer when the cargo crosses the ship's rail at the origin port.A document certifying that the goods were in apparent good condition immediately prior to shipment.Terms beginning 'C' are 'Contracts of Dispatch'. Cartel . or his agent. Buyers are disadvantaged with contracts of dispatch. The carrier used.Is an association of several independent national or international business organizations that regulates competition by controlling the prices. Because the ship's rail is seen as triggering these terms. the production. it is often inappropriate to use either in a modern port and reference should be made to the notes on this subject under FOB. CFR (Cost and Freight) has a long history and outside of INCOTERMS a definition with consensus is difficult.Payment for goods in which a commission house. certified by the BOC that his export complies with the origin requirement specified under bilateral. Cash in Advance (CIA) .Cagayan de Oro CENRO – Community Environment and Natural Resources Office of the DENR Certificate of Inspection . sea. Certificate of Shipment . Certificate of Origin refers to the declaration of the exporter.Cost and Freight CFR/CIF . certifies that manufacturing has been completed. Common . Certificate of Manufacture . the responsibilities for the costs of transit only pass from the seller to the buyer at the destination port. A statement signed by the exporter. and confirms that the goods are at the buyer's disposal. the point of transferring risk and the point at which responsibility for cost is also transferred are simultaneous. CDO . for a stated freight rate.Payment for goods in which the price is paid in full before shipment is made. However. This method is usually used only for small purchases or when the goods are built to order.Cubic Meter C&F . 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.Carrier. They differ from other INCOTERMS as they segregate the point at which risk and responsibility passes from the point at which costs pass. certifying to the nature of shipment of his export goods (full shipment effected. or other intermediary. transfers title documents to the buyer upon payment in cash. Cash Against Documents (CAD) . Carriers are prohibited from purchasing. Under all other terms. indicating that the goods being shipped. The buyer must consider this disparity before accepting a C termed contract.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. By government regulation.A public or privately owned firm or corporation that transports the goods of others over land.shall refer to the document which the BOC or its deputized agencies issues upon request of the exporter or his duly authorized representative. a common carrier is required to carry all goods offered if accommodations are available and the established rate is paid. the costs incurred for carriage and the timing of the carriage are all under the seller's control. shut-off or non-shipment) cbm .A statement in which a producer specifies where his goods were manufactured. the C terms represent exceptional risk-management opportunities and are actively pursued as a consequence. The buyer must take risks for a period of carriage during which the buyer has no means of controlling or limiting those risks. 115 Shipping Costs and Competitiveness In Northern Mindanao . From the seller's perspective. regional or multilateral trading arrangements to which the Philippines is a party. and attested to by PhilExport or a local Chamber of Commerce. leasing or renting shipper owned containers. originated and were produced in the exporter's country. or through the air. or a major percentage of them. or the marketing of a product or an industry. Carrier(s) Containers or Shipper(s) Containers .

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. Charter Party .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. Classification . they represent great risk-management opportunities for the seller. This is the first of only two terms that place a compulsory responsibility for insurance on the seller. while the buyer's ability to control the costs and timing of carriage only pass at the destination point. if the destination is an inland point or a modern port with conditions as discussed under FOB. CPT may be used for airfreight. At discharge ports. etc. In either case. The placement of an item under the correct number in the customs tariff for duty purposes. carrying the goods to a certain point.The contract between the owner of a ship and the individual or company chartering it.A class of goods or commodities is a large grouping of various items under one general heading. However. roadfreight and railfreight as well as for seafreight when the ship's rail serves no purpose. Under all other terms. the buyer considers insurance as an optional responsibility. Charter .Is the multimodal equivalent of CFR. CPT/CIP (Carriage Paid To) . CFS/CY (Pier to House) .A bill of lading issued under a charter party. (Refer CIP) CFS (Container Freight Station) . in the buyer's country. If the carrier is collecting the cargo from the seller's premises then the risks of carriage pass to the buyer at that point. Has usually come to mean any non-scheduled commercial service. Although these reservations warrant serious consideration for a buyer. the term CFS means the bonded location designated by carriers in the port area for unpacking and delivery of cargo. Under CPT.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.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. The diagram represents this condition with a brace. it is not uncommon for importers to resort to litigation over the correct duty to be assessed by the customs on a given item. The named place where the seller's costs end can be a point other than a seaport (as well as being a seaport). CFS/CFS (Pier to Pier) . who then is responsible for his own loading and delivery. all at consignee's risk and expense.). The cautions and notes made regarding CPT equally apply to CIP. All items in the group make up a class. Charter Party Bill of Lading .Is a customs term.g. The cautions expressed for buyers using CFR are equally applicable to CPT with added complications in that the transfer of risks can begin earlier. responsibility for costs only transfer when the goods arrive at the stated place where carriage is 'paid to'. Chassis . 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. Class Rates . The freight rates that apply to all items in the class are called class rates. 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.e. returning to the charterer with other goods. At times this procedure becomes highly complicated. CFS Charge (Container Freight Charge) . Among other specifications. indicating that the place where carriage is paid to may be any point in the country of destination. the charter party sets forth the exact conditions and requirements agreed upon by both sides. E. It is not acceptable by banks under letters of credit unless so authorized in the credit. CIP (Carriage & Insurance Paid to) represents CPT with the inclusion of Insurance.A wheel assemble including bogies constructed to accept mounting of containers.Originally meant a flight where a shipper contracted hire of an aircraft from an airline. Insurance and Freight) represents the condition of CFR with the addition of Insurance. a Freight Forwarder or Multi Transport Operator could act as 'carrier' as could an airline or shipping line). 116 Shipping Costs and Competitiveness In Northern Mindanao . the contract usually stipulates the exact obligations of the ship-owner (loading the goods. or it provides for an outright leasing of the vessel to the charterer.CIF (Cost.

A group of vessel operators joined together for the purpose of establishing freight rates. square.A letter of credit. Consolidator . The individual or company to whom a seller or sipper sends merchandise and who.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 document. RORO/Container/Break-bulk Vessel . Common Carrier . Consortium . Consignment . Confiscation . 117 Shipping Costs and Competitiveness In Northern Mindanao . sharing the total weight charge for the shipment. or a freight forwarder who consigns goods on behalf of his principal.A symbol laced on packages for identification purposes. is recognized as merchandise owner for the purpose of declaring and paying customs duties.S.Designated to accommodate three types of cargo. upon presentation of necessary documents. bank even if the foreign buyer or the foreign bank defaults.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.An itemized list of goods shipped. It can be self sustaining. to another legal entity (consignee) who acts as a selling agent. Clean Bill of Lading . issued by a foreign bank. Conference . with letters and/or numbers as well as port of discharge.Is the physical transfer of goods from a seller (consignor) with whom the title remains. Consignee Person or firm to whom goods are shipped under a bill of landing. generally consisting of a triangle. bank.A government official residing in a foreign country. required by some foreign countries. describing a shipment of goods and showing information such as the consignor.Special forms signed by the consul of a country to which cargo is destined. Clean Draft .S.An agent which brings together a number of shipments for one destination to qualify for preferential airline rates. cross. Compensation may or may not be given to the owner of the property.An arrangement whereby various shippers pool their boxed goods on the same shipment. Consignee Marks . usually self sustaining. It could be for management or exploitation of a natural resource. Consolidated Shipment .A firm or individual that transports persons or goods for compensation. quantity and nature of the shipment. describing goods to be shipped. circle. made to the consul of a foreign country. Consular Documents .The name for an agreement under which several nations or nationals (usually corporations) of more than one nation. Consular Declaration . Consignor .Is a bill of lading which has exemptions to the receipt of merchandise in "apparent good order" noted.Claused Bill of Lading . with validity confirmed by a U. consignee. usually included among an exporter's collection papers.Ship designed to accommodate containers and roll-on roll-off cargo. A consignor might be the owner of the goods.Is a draft to which no documents have been attached. RORO/Container Vessel . and value of the shipment. charged with representing the interests of his or her country and its nationals. it is used by the country's customs officials to verify the value. Confirmed Letter of Credit . selling the goods and remitting the new proceeds to the consignor. join together for a common purpose. Commercial Risk . Certified by a consular official of the foreign country. Consul . An exporter who requires a confirmed letter of credit from the buyer is assured of payment by the U.The taking and holding of private property by a government or an agency acting for a government. diamond. Consular Invoice . Commercial Invoice .Is a bill of lading which covers goods received in "apparent good order and condition" and without qualification.A formal statement. as in the case of some international petroleum consortiums.

) 118 Shipping Costs and Competitiveness In Northern Mindanao . temperature controlled flatrack. and where containers may be picked up by shippers or re-delivered by consignees. Containers (Ocean) .Is a warehouse where imported goods may be stored for a total of three years without the payment of duty or taxes. whereas the buyer must clear the goods through customs on the import side. damage. non-disposable dry cargo. Containers allow a greater amount of cargo protection from weather.Ocean going ship designed to carry containers both internally and on deck. ventilated. 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). unless otherwise provided. 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. hi cube. refrigerated container. No container yard (CY) shall be a shipper's. half high. or a forwarder's place of business.240 lbs. consignee's. insulated container. vehicle rack portable liquid tank. tanks or the like. and theft.Many types of air cargo containers are offered. Containerized Cargoes . it is not exclusively road or rail or a road/rail combination) D. generally having any internal volume or capacity of not less than one (1) cubic meter. (i. All containers must bear manufacturer's specifications. fittings and fastenings able to withstand without permanent distortion. the seller may pass risk and responsibility at the first of these. Because the Frontier falls on the seller's side of the border. 8 feet wide and 8 feet high standard and 9’6” high cube. CY (Container Yard) . for singular or unit handling and transport.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 containers are designed in various sizes and irregular shapes to conform to the inside dimensions of a specific aircraft.Is a schedule of charges assessed by the government on imported goods. storing and delivering containers. Containers (Air Cargo) . The term container means a single rigid. refrigerated. platform.mean cargoes packed in containers for easy handling or transportation of same as a unit. tank container. Containerization . It is further defined according to their uses as dry cargo. The seller must clear the cargo through customs on the export side of the border of handover.e. CIIS . DA – Department of Agriculture DAF (Delivered At Frontier) . assembling. liquid bulk. and 40 feet in length. tilting container.Deadweight (tons of 2. holding. Customs Bonded Warehouse . materials and products together inside a hold in the form of boxes. Bureau of Customs Customs Tariff . 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. if the transit involved the movement of cargo through several frontiers. open top. All types of containers will have constructions. NVOCC's. dry van. 35. Average outside dimensions are generally 20. . or open top container without wheels or bogies attached. obligating the buyer to arrange the main carriage thereafter. insulated.Customs Inspection and Investigation Service.Are designed to be moved inland on its own chassis and can be loaded at the shippers plant for shipment overseas. open top. having not less than 350 cubic feet capacity. For example.Container means any structure so designed to hold and keep articles. etc. all the stresses that may be applied in normal service use of continuous transportation. Basic types of containers are. Some are self sustaining. solid bulk.W. 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. flat rock.Is a concept for the ultimate unitizing of cargo used by both steamship lines and air cargo lines.The term CY means the location designated by Carrier in the port terminal area for receiving. Container Ship .

DDP may be modified to exclude the seller from having to pay a VAT that the buyer could recover directly. As with all of the D prefixed terms. The buyer may not be able to take control at a point in a restricted port area. Regulations regarding sellers claiming VAT paid to foreign revenue services vary from country to country. the point of handover (ship's side. 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. Decommissioned Vessels .Articles or substance capable of posing a significant risk to health. 119 Shipping Costs and Competitiveness In Northern Mindanao . Additionally.Terms prefixed 'D' are 'Contracts of Arrival' involving the passing of risk and responsibility at the point where costs also terminate. DDP (Delivered Duty Paid) . Equally. and there is no clear-cut position in this matter. although the seller will pay Duties. the seller's price may include this amount which otherwise could actually be recovered by the buyer. As a multimodal term. DES reverses the risk advantages of CFR. Demurrage . the point of handover (landside on the harbour. 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.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. over which they have no control. for the buyer DES represents CFR without the disadvantages of placing risks on the buyer. and that ordinarily require special attention when being transported. DENR .Department of Environment & Natural Resources DES/DEQ . DES will often financially correlate to CFR.Dangerous Goods . From the seller's perspective. 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. placing all risks with the seller until the cargo arrives at the named port. safety or property. Caution is appropriate when using D prefixed terms with Documentary Credits as few 'documents' are geared to record the passing of risks on arrival. Although not triggered by the use of the ship's rail. both parties should consider VAT if payable in the buyer's country.vessels which are not engaged in commercial trade. Although not triggered by the use of the ship's rail. 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. Also a charge for undue detention of transportation equipment or carriers in port while loading or unloading. An alternative D term such as DDU might be better suited to represent an achievable point of handover for both parties. DEQ (Delivered Ex Quay) extends the shipper's responsibility beyond the arrival of the vessel to the point where the goods are discharged. DDP requires the use of Multimodal transport documents over monomodal documents such as Bills of Lading or Airwaybills. If this is not done. Both parties should seek guidance in this. Should these subsequently prove to be incorrect the buyer will have the obligation to bring any under recovery to account. (See CFR). as certified to by the Marine Industry Authority (MARINA) or the Philippine Coast Guard (PCG). 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.A penalty for exceeding free time allowed for loading or unloading at a pier or freight terminal. 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. But. DES (Delivered Ex Ship) is Monomodal. arrived) will be inappropriate in a modern port. duty paid) is frequently inappropriate in a modern port environment.

DDU reverses the risk advantages of CPT. One digital document under consideration. which are frequently used in the transport industry. 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. From the seller's perspective. Each should be avoided due to their ambiguous nature.Department of Public Works and Highways DTI . DOF . whereby the exporter or his duly authorized representative declares and certifies the full particulars of the shipment EDI or EDIFACT . from the UNbacked electronic data interchange standards body. This is excluding the payment of domestic duties and the ancillary clearance charges associated with the import process at destination.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). and in de-hairing hides. if the intended transit is beyond the point of entry in the country of destination. DDU will often financially correlate to CPT. But.are cargoes brought to a pier. As with all of the D prefixed terms. DMA (Dimethylamine) (CH3)2NH Flammable gas with ammonia aroma. including those engaged in barter trade. The statement 'EXW' must be qualified to give the address of the 'works'. including those engaged in barter trade. river or channel marginal wharf at any national port in the Philippines. "price ex factory" means that the quoted price is for the goods available at the factory gate of the seller). site or warehouse etc. Dockage (at Anchorage) . to create electronic versions of common business documents that will work on a global scale.Department of Finance DPWH . over which they have no control. in pharmaceuticals and electroplating.is the amount assessed against a vessel engaged in international or foreign trade. and flotation agent.a document required for every shipment of goods. DDU (and DDP) correlates closely to the generic expressions of 'free domicile'. Commerce and Transport.g. that do not berth but drop anchor at either a government or privately-owned port whether operated exclusively or commercially. Same as the former "Ex Works. ether.Department of Trade and Industry Domestic Cargoes . alcohol.Electronic Data Interchange for Administration. 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. The possibility of delays in transit and any resultant storage charges (should the buyer fail to conduct clearance in good time). but are nevertheless payable prior to release. Sellers are further cautioned that. used as an acid-gas absorbent. for the buyer DDU represents CPT without the disadvantages of placing risks on the buyer. this term is not easy to use in conjunction with a Documentary Credit and as a multimodal term. which may be a factory. bulkhead . or for mooring or making fast to a vessel so berthed. Ex . and C." 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 International Forwarding and Transport Message will do the jobs of six different electronic messages currently in use. solvent. boiling at 7° soluble in water. would require the use of Multimodal transport documents over any traditional monomodal documents such as Bills of Lading or Airwaybills.DDU (Delivered Duty Unpaid) . 120 Shipping Costs and Competitiveness In Northern Mindanao .wharf. wharf.is the amount assessed against a vessel engaged in international or foreign trade. placing all risks with the seller until the cargo arrives at the named port. Export Declaration . 'franco domicile' and 'free house'. wharf or bulkhead to and from a port within the Philippine waters.Signifies that the quoted price applies only at the indicated point of origin (e. 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'. should be noted. EXW Ex works. (See CPT). for mooring or berthing at a pier. Dockage (at berth) .

The seller must give advance notice of availability (how much notice would have to be predetermined e.and the term FCA often offers a more manageable alternative. FCA requires the seller to take responsibility for risks and costs up to this handover. collected by road for an airfreight export).or even between ports within one country. FOB. 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. at or on the agreed future date or future time. including export customs clearance. EXW is rarely compatible with documentary credits (for example) .Defines the conditions under which many sellers and buyers actually transfer risks. FCA (Free Carrier) . 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. Although EXW is a popular term it remains complex. Buyer is responsible for loading costs. as opposed to SCR (Specific Commodity Rate) applying to one commodity only. 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.uniform charging scale applying to a number of commodities. 121 Shipping Costs and Competitiveness In Northern Mindanao .g. even though they are not yet under the buyer's physical control. Note that the entire journey need not be by sea. and the various points of transfer that different modes of transport may involve. FAS (Free Alongside Ship) Seller is responsible for inland freight costs until goods are located alongside the vessel/aircraft for loading. wharf of bulkhead intended for shipment to a foreign port. for example. Careful consideration should be given to the appropriate section of the official INCOTERMS 2000 text dealing with 'proof of delivery'. uncleared through customs. in many markets. FAS requires the seller to arrange export customs clearing. Thus the vessel comes to the cargo rather then the cargo coming to the vessel. the buyer is liable for all risks to the cargo. FAK .g. through the sales contract).Under INCOTERMS 2000. 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 . In many cases. Export Cargoes . ocean /air freight and marine/air insurance.Freight All Kinds . Under this term. but the moment of 'export' must be. most operations involve the placing of cargo into a berth where the vessel in question is intended to arrive. During this period. 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. Even if the seller can enter the port area. The Seller should note that the export of the goods is NOT guaranteed under EXW and the buyer may. However. and this is further aggravated by the fact that the goods are generally uninsured throughout this period too. is Monomodal in that it may only be used for transaction where the main carriage is by seafreight. as opposed to it having physically docked prior to the arrival of the cargo. The essential aspect of the term is that the vessel is in port prior to the seller delivering the cargo into the port area.are cargoes brought to a pier. 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. are subject to extreme variables. the modern documents issued by lines may present risk-management complications to the seller when using such an old term as FAS. There are significant risks associated with the older seafreight terms (such as FAS. which has a considerably long tradition. risk and responsibility pass from the seller to the buyer when the cargo is made available on the ground at the 'works'. opt to keep the goods in the country of origin. It is important to consider that the nature of the carrier being used. the seller is not allowed into the harbour area. CFR/CIF etc) specifically with regard to the transport documents issued. 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.

The firm may ship by land. and many are supported by domestic legislation making such definitions unique to a specific country or port. collision. Under INCOTERMS 2000.Cost of loading a vessel is borne by the charterer Free In and Out (F.e. Free In (F. the seller must be in the physical position of being able to load the cargo over the rail under their own direct control i. under FCA the seller hands over risks/control of the cargo at a point prior to the vessel. frequently prior to the port. 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. The firm may also handle banking and insurance services on behalf of a client. or it may specialize. sinking. Usually it handles all the services connected with an export shipment. Generally. these charges are for the buyer's account. Some of these directly contradict others. Foreign Freight Forwarder . the term may be modified to represent the passage of FCA risks with 'FOB' costs. If this is not acceptable. Under FCA. However. FCA represents an excellent alternative to FOB. Further this process would have to be monitored by both the seller and buyer or their representatives. is one of the commoner trade terms in use. which is inappropriate in most modern port operations.Free of damage FPA . it is a departure from the commoner financial interpretation of 'FOB'. 122 Shipping Costs and Competitiveness In Northern Mindanao . burning. Although this reflects the physical condition of much seafreight trade conducted using 'FOB'.I. Therefore. FOD . Freight Forwarder. cleared for export by the seller. Buyer is responsible for ocean/air freight and marine/air insurance.An independent business that dispatches shipments for exporters for a fee. even in those extreme circumstances where they are. F&D . he is willing to bear partial losses. as an INCOTERM.) .For deep-sea transactions. 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. it is expressed as being Monomodal and it can only be used for transactions where seafreight is the main carriage. or by an agent that is under the contractual control of the seller. The INCOTERM FOB still has an application in some markets. air. In defining FOB as an INCOTERM.Cost of loading and unloading a vessel is borne by the charterer. or other named peril Foreign Transshipment Cargo . rail or air transport. preparation of documents. there is no application for FOB in road. they have no influence over the party loading the vessel. Free Alongside .refers to any article arriving at the port from a foreign port or place and destined for shipment to another foreign port. pier delivery and export clearance.I.Quoted price includes the cost of delivering the goods alongside a designated vessel. FCA may involve the carrier collecting from the seller or the seller delivering to the carrier. Forwarder. Yet this 'common' aspect of the term has resulted in the myriad definitions found all over the world for FOB. the direct result of stranding.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. this control often cannot be achieved as the seller is either not allowed into the harbour area or. 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. dependant on the conditions of the sales contract.O. from the modern deep-sea export perspective. This normally obligates the seller to pay for the origin handling/loading and/or stowage charges raised by the port.) . warehouse. the loading is undertaken by the seller's own labour. but these are more and more in the minority. or sea. booking cargo space. For FOB to apply.Free of Particular Average (Marine Insurance Term).

acting on the behalf of a shipper. Hatch .A central location to which traffic from many cities is directed and from which traffic is fed to other areas.85 kilometers per hour.means a container loaded with cargoes belonging to a single consignee and/or covered by only one Bill of Lading. Husbanding .in the deck of a vessel. agents. Free Port . rolls. cargo sheds and warehouses of the Authority without the payment of storage fee.refers to the gross registered tonnage of the vessel.An article taken apart. crates.means the period allowed for any article. General Breakbulk Cargo .Wt. open to all traders on equal terms. Just-In-Time (JIT) . Full Container Load (FCL) .Group of stevedores usually 12 members with supervisor assigned to a hold or portion of the vessel being loaded or unloaded. cases. bales.20 feet per hour or 1.An individual or company .Cost of unloading a vessel is borne by the charterer. more specifically a port where merchandise may be stored duty-free. or 6. full car load G. Import Cargoes . Long ton hundredweight = 112 pounds.or opening.O.International Standards Organization also referred to as the International Organizational for Standardization. fresh water. through which cargo is loaded. crated or uncrated fowls such as chicken.R. GRT . ducks and the like and other loose cargoes. food and supplies.A short ton hundredweight = 100 pounds. baggage and/or container to be stored in any port premises.Gross Weight Gang/Workgang .The cover of .means those that are listed in a number of bills of lading. payroll for the crew. Heavy Lifts ./G.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. 123 Shipping Costs and Competitiveness In Northern Mindanao .Entire weight of goods. each consisting of different commodities. wharf or bulkhead by vessel coming from a foreign port. who arranges all necessary details of shipping and documentation for a manufacturer or exporter.) .W. doctors appointments.) . or port captains who are appointed to handle all matters in assisting the master of the vessel while in port to obtain bunkering. These include but are not limited to bagged cargoes.A port which is a foreign trade zone. Heavy Lift Vessel . Freight Forwarder . ready for shipment. folded or telescoped in such a manner as to reduce its bulk at least 33 1/3% below its assembled bulk. Knock Down (KD) . drums and such other like or similar types of packing including vehicles. FCL . pending re-export or sale within that country.The unit of speed equivalent to one nautical mile. ISO . Gross Weigh .The principle of production and inventory control in which goods arrive when needed for production or use.Freight too heavy to be handled by regular ship's tackle Hub . live animals. and container. Irrevocable Letter of Credit .Full container load. .Term used by steamship lines.. which includes employing the services of a carrier of carriers. cylinders. Free Storage Period . baskets. etc. Hundredweight (cwt. ship repair. Knot (Nautical) .080. packing.are cargoes coming from a foreign country to a pier.Free Out (F.Specifically designed to be self sustaining with heavy lift cranes. to handle unusually heavy and/or out-sized cargoes.

which generally involves the haulage of general cargo as distinct from bulk cargo. upon presentation of the sight draft and documents required by the letter of credit.L.) M/V or M. Letter of Credit .A document issued by a bank at a buyer's request honoring debt obligations to the seller upon receipt of the document.The areas designated by PPA for vessels that are laid-up.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. Used mostly in harbors and inland waterways.S.Common farm animals Lkg. . Marks are registered at appropriate customs houses. y Cia. authorizing the seller to draw a specified sum of money under specified terms. LCL Container (Less Container Load) .L & D . .A list of the goods being transported by a carrier. Load Factor . Example A. Bogota via Barranquilla.The exporter receives guaranteed payment from the confirming bank in the U. Lighterage . Liner .Less than container load L/C (Letter of Credit) . fixed schedules. Lay-up Fee . it is 124 Shipping Costs and Competitiveness In Northern Mindanao .Rates applicable when the quantity of freight is less than the volume or truckload minimum weight.Capacity sold as against capacity available.is the amount levied against vessels engaged in domestic trade which are temporarily authorized to lay-up and anchor at designated lay-up areas.Motor vessel Manifest . expressed as a percentage.A document issued by a bank per instructions by a buyer of goods. a liner thus is a vessel that engages in this kind of transportation.As used on containers in foreign trade.V .The cost of loading or unloading a vessel by means of barges alongside. In domestic trade.lift-off. Lay-up areas .An insurance which will compensate the owner of goods transported overseas in the event of loss which cannot be legally recovered from the carrier.The acronym meaning "lift-on.Lighterage LUNAC – brand name of an Oleic Acid MCT .refer to containerized cargoes owned by or belonging to more than one shipper/consignee and / or covered by more than one bill of lading.The word "liner" is derived from the term "line traffic" which denotes operation along definite routes on the basis of definite. Liquidation . & Bkg. Ltge. a symbol or initials shown together with the port of importation and the final destination.. Issued as revocable or irrevocable.The finalization of a customs entry. Livestock .G. Letter of Credit (L/C) . they also appear on bills of lading and invoices. Marine Insurance . Lo/Lo .Mindanao Container Terminal M/T .Loss and damage L. if different. which in this case is by the use of a crane. Lighter .payment by sight draft .Leakage and breakage.Metric Ton (2204 lbs.An open or covered barge equipped with a crane and towed by a tugboat." denoting the method by which cargo is loaded onto and discharged from an ocean vessel. . Mark . These are identified by the corresponding coordinates (latitudes and longitudes) in the Nautical Chart produced by the Mapping and Resource Information Laid-up vessels . Less than Truck Load (LTL) .C.

S. Det.Not otherwise specified N. political. generally soliciting business and arranging for or performing containerization functions at the port. .National Economic and Development Authority N n../mty – Empty MW .Outside diameter O. taxes and import quotas O. Mate's Receipt . MFN .Colorless gas with the strong.e. . surfactants and explosives.common to mark containers with the name and address of the recipient.(Most Favored Nation) Designation for countries which receive preferential tariff rates.Owner's risk of deterioration 125 Shipping Costs and Competitiveness In Northern Mindanao .g.P. .(Actual Net Weight) Weight of goods alone without any immediate wrappings. NEDA .O.Minimum weight factor Minimum Charge . B/L .N.Not otherwise enumerated N. administrative or legal impediments to trade other than duties.H.s.Net tons NVOCC (Non-vessel operating carrier carrier) .Not otherwise indicated by number. These carriers issue their own bill of lading referred to as a house bill of lading. .Not elsewhere specified N. .T.C.I.I. the weight of the contents of a tin can without the weight of the can.Not elsewhere mentioned (English) n. fishy. .O.The measurement ton (also known as the cargo ton or freight ton) is a space measurement. Relatively smaller quantities are converted to alkylalkanolamines. The cargo is assessed a certain rate for every 40 cubic feet or 1 cubic meter it occupies. Marking .Not more specifically described N.An F.O.it is the least amount of payment due from port users based on prescribed rates. Net Terms . .Free of charters' commission Net Weight . Methylamine is a raw material for N-methylpyrrolidone and also for carbamate insecticides and other carbamate-based products. .O.Not otherwise herein provided N. or its container. Measurement Ton .e. N.R. Non-Tariff Barriers (NTB) . MMA (Mono-Methyl Amine) . registered cargo consolidator of small shipments in ocean trade. This is no longer the best tariff structure available.Economic.m.Minimum bill of lading MRL (Minimum Residue Level) – minimum quantity of pesticides in agricultural products like fruits and vegetables mt.E.Receipt of cargo by the vessel. usually 40 cubic feet or one cubic meter. 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. . .O.Every article of foreign origin.M.D. e. but this is rarely done in foreign trade.B. signed by the mate (similar to dock receipt). Min. Not otherwise indicated by name. ammonia-like odor characteristic of amines.

wharfage. PENRO – Provincial Environment and Natural Resources Office of the DENR Phytosanitary Inspection Certificate . It is "open" because the goods that are shipped are also detailed at that time. O. county or state) which in international shipping maintains various airports and/or ocean cargo pier facilities. etc.Owner's risk of fire or freezing O. dockage at anchorage. .refers to the Philippine Ports Authority P.R. . 126 Shipping Costs and Competitiveness In Northern Mindanao . & D.R.Order notify. dockage at berth. Has the power to levy dockage and wharfage charges.W.fee paid to a harbor or river pilot . O/N .O. landing fees. until the policy is cancelled by the insured or by the insurance company. 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. Many ordinary marine insurance policies do not cover against pilferage.. including those engaged in barter trade for each entrance into and departure from a port of entry in the Philippines. the taking of small parts of a shipment. Port Charges .e.r.A cargo insurance policy that is an open contract.A. . 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. and when this coverage is desired.Customers who incorporate the exporter's product into their own merchandise for resale under their own brand names.b.Any cargo that loses considerable value if it is delayed in transportation (Usually refers to fresh fruit and vegetables). This usually is shown in a document called a marine insurance certificate. own name O/o .is the amount assessed against a vessel engaged in foreign trade based on its total GRT or part thereof. Open Policy . i.Owner's risk or breakage. manual navigation or controlling of a ship Port Authority .L.A high-risk trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.S.Packed weight Pallet . Perishables . Issued after the vessel has sailed and the cargo has been entered in the ship's manifest.refer to port dues.Owner's risk Ocean Bill of Lading .Particular average P. as opposed to the theft of a whole shipment or large unit. etc.Owner's risk of becoming wet O.As used in marine insurance policies.Owner's risk of leakage O. loading equipment warehouses for air cargo. . PPA . usage and lay-up fees. storage fees assessed on the vessel/cargo.R. .A government body (city.A receipt for cargo in transit.W.A certificate issued by government indicating that a shipment has been inspected and is free of harmful pests and plant diseases.F. Port Dues . it must be added to the policy. Pilotage Rates . Open Account . transit sheds. Pilferage .Order of O/R . . Original Equipment Manufacturers (OEM accounts) .Load carrying platform to which loose cargo is secured before placing aboard vessel. the term denotes petty thievery.

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.A deduction taken from a set payment or charge. "on first appearance. Usually prepared and loaded at pier ready for arrival of vessel and subsequent loading (i. . 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. Port of Loading . coffee in bags. and other related charges. it differs from a discount which is deducted in advance of the payment. When a steamship company issues a clean bill of lading. However.Add-on service in express market.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. in order to satisfy a customs requirement. In foreign trade. if nothing to the contrary appears. Red Clause Letter of Credit .e.for purposes of the 1994 Port Tariffs Rates application. Pre-Slung Cargo . 127 Shipping Costs and Competitiveness In Northern Mindanao . Pro Number . Refrigeration Regs. Usually assigned at once.A document that authorizes a customs broker to sign all customs documents on behalf of an importer. freight. the term refers to an informal document presented in advance of the arrival. coconut shells.A practice by which governments extend similar concessions to one another. Prepaid Freight . It is often used by the buyer to secure a letter of credit. insurance. an import license or a foreign currency allocation. Proof of Delivery . etc).Cargo shipped already in a cargo sling or net. Reciprocity . 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. It is not an operative instrument and is usually followed by the actual letter of credit.When used with the title of a document. Queuing area .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.A number assigned by the carrier to a single shipment.Refrigerating.Port where cargo is loaded aboard the vessel lashed and stowed Power of Attorney . Proforma . As a rebate is given after payment of the full amount has been made.Direct drive on/drive off wheeled vehicles on specially-designed sea-going vessels. Port of Entry . .An invoice prepared by the seller in advance of shipment that documents the cost of goods sold. Quay Crane Charges – a fee paid in using the waterside platform that runs along the edge of a port or harbor." A term frequently encountered in foreign trade. it must be inferred that the cargo was in good condition when received by the carrier.form of waiting line Rebate .Preliminary advice that a letter of credit has been established in the form of a brief authenticated wire message. Prima Facie . Price Quotation/Proforma Invoice .Latin. where boats are loaded and unloaded.Private Port . This enables the exporter to purchase inventory and pay other costs associated with producing and preparing the export order. RORO (ROLL ON-ROLL OFF) . Port of Discharge . or preparation of the required document.Generally speaking.Port where vessel is off loaded and cargo discharges. 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. Often offered free. Pre-Advice . that is. used in all cases where the shipment must be referred to.A port at which foreign goods are re-admitted into the receiving country. a full or partial rebate may be given on import duties paid on goods which are later re-exported. REFG.Registered Tonnage Retaliation . delivered either by phone or courier.

and the health of live animals.Shipper's Load and Count S. . There are various classes of customs duties. Shut-out Cargoes . S. palletized. on land. Compare date draft and time draft. Stuffing Report . Shipper's Export Declaration . Tariff . & C. .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. Ft.A statement signed by a health organization official certifying the degree of purity. & T. incoming and outgoing. and in the air.cargo handling.means 1.Shipping Receipt Sanitary and Health Certificate . Shipment . regardless of size and shape and whether they arrive loose. crated etc Tally Sheet . of export shipments as well as Schedule B identification number. or spoilage of goods. Used in ports where shore cranes and equipment are lacking.O. checked by Tally clerk on dock.Ship Owner' Liability S.1326 cubic meters (40 cu. . size of the van Stuffing and Stripping.A general term for any listing of rates. cargo shed and warehouses of the government.Revenue Tonnage .L. destination.000 kgs or 1. etc.All rigging.excluding the weight of the goods inside the container. radio. which list goods that are duty free and those subject to import duty. Sight Draft . giving the rate of duty in each case. weight. etc.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.List of cargo. Surety Bond .contains the description of goods to be shipped.is the amount assessed on articles. ship side Storage Charge . Stowage . Single Entry Charter .Shipping and forwarding agent.The weight of the container and/or packing materials only . 128 Shipping Costs and Competitiveness In Northern Mindanao .) whichever yields the greater amount of revenue.| Ship's Manifest ..Stopped in Transit S. the tariffs most frequently encountered in foreign trade are tariffs of the international transportation companies operating on sea. S. and the customs tariffs of the various countries. etc. tariffs of the international cable. number of containers and seal. .Shipper's Load and Tally S.L.A.Vessel has its own cranes and equipment mounted on board for loading/unloading. . consignee. cleanliness. wrapped or unwrapped. .A bond insuring against loss or damage or for the completion of obligations. Self-Sustaining ..A form required by the Treasury Department and completed by a shipper showing the value.are cargoes brought to the premises.A draft payable upon presentation to the “drawee”. the packing and unpacking of containers We take care of the loading and unloading of your goods.A non-scheduled flight carrying the car Stevedoring . Tare Weight . utilized on a ship to load or discharge cargo. charges.An instrument in writing containing a list of the shipments comprising the cargo of the vessel. 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. Ship's Tackle/Ships Gear . & F.I.L. baggage and containers for storage in the port premises. and telephone companies.R. cargo sheds and warehouses of the government.T.

Typically.Truckload rates apply where the tariff shows a truckload minimum weight. Vessels for strapping . The space within a vessel in units of 100 cubic feet. – Vessel Volume Weight . calculated by multiplying the length times the width times the height and dividing by 166. 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. Trust Receipt . medical help or shelter. In as much as the unloading and reloading of delicate merchandise is likely to cause damage.Any cargo requiring carriage under controlled temperature TEU .Transportation charges assessed shippers who declare a value of goods higher than value of carrier's' limits of liability.Freight rates for liner cargo generally are quoted on the basis of a certain rate per ton.Value Added Service Provider VAT (Value-Added Tax) .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.refer to vessels or watercrafts which are no longer seaworthy to undertake voyage and are eligible only for breaking up. Ton-Registered . Trade . 129 Shipping Costs and Competitiveness In Northern Mindanao .A term used to define a geographic area or specific route served by carriers. Usage Fee .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. Ton-Displacement .A tramp is a vessel that does not operate along a definite route on a fixed schedule. Transferable Letter of Credit . most frequently from one ship to another. Ton-Deadweight .Release of merchandise by a bank to a buyer for manufacturing or sales purposes in which the bank retains title to the merchandise. however.Temperature Controlled Cargo . Truckload . VASP .The transfer of a shipment from one carrier to another in international trade. Valuation Charges .Used when calculating air freight when the size of the carton is greater than the average weight. Tramp . This ton.Indicates the carrying capacity of the ship in terms of the weight in tons of the cargo.The weight of the volume of water which the fully loaded ship displaces.A sales or consumption tax which the end user pays.Truckload Ton . this is a "hidden" tax.a vessel which has suffered engine trouble. Third Party Cargoes . Vessel for Drydocking . Charges will be at the truckload minimum weight unless weight is higher. transshipments are avoided whenever possible.Twenty foot equivalent unit of one shipper. but calls at any port where cargo is available.refer to vessels or watercrafts intending to undergo dry-docking/ repair as required by the Classification Society or other government agencies.Total Handling Charge TL .Indicates the cubical contents or burden of a vessel in tons of 100 cubic feet.refer to cargoes not owned by the private pier owner/wharf owner/operator. Transit Cargo for Export . Ves. fuel. provisions and passengers which a vessel can carry. depending on the nature of the commodity. added to the list price of the goods in question. may be weight ton or a measurement ton.refers to any article arriving at any domestic port from another domestic port or place and destined for reshipment to a foreign port. Vessel in Distress . Transshipment . THC .

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. identifying the commodities deposited.Weight guaranteed W. wrappers. As example. It is non-negotiable if permitting delivery only to a specified person or firm. The total weight as shipped (b) Net . When it was first introduced. the rate may be quoted on the basis of 2.Warehouse receipt Warehouse Receipt . the warehouse-towarehouse clause was extremely important. ground support equipment.There are three types of weight ton.Weighing and Inspection W. and the metric ton weight 2. Wet Lease .W. weighing 2. a rate is shown per weight/measurement ton. X Heavy . 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. Weight Load Factor . Cargo is frequently limited by volume rather than weight. Wharfage A charge assessed by a pier or dock owner against the cargo or a steamship company for use of the pier or dock. Legal .Extra Heavy X Strong .Double extra heavy XX Strong . & I. This means that the rate will be assessed on either a weight ton or measurement ton basis.The weight of the goods including packing. The last is frequently quoted for cargo being exported from Europe. BOC. the long ton.G. . load factors of 100% are rarely achieved. DTI.204.The weight of the goods themselves without the inclusion of any wrapper (c) Tare .An arrangement for renting an aircraft under which the owner provides crews. and also subject to the law of insurable interest.A.Double extra strong Sources: PPA.In many cases. whichever will yield the carrier the greater revenue.The weight of the packaging or container (d) Weight / Measurement Ton . plus inside packing. internal and external.Extra strong XX Heavy . Weight. Warehouse receipts are common documents in international banking. .Weight and/or measurement W/R . is a charge on all cargoes.000 pounds.A receipt of commodities deposited in a warehouse. or containers. . but it is negotiable if made out to the order of a person or firm or to a bearer. which override its provisions.With Particular Average W/M .Net weight of goods. Truckers 130 Shipping Costs and Competitiveness In Northern Mindanao .68 pounds. fuel and so on (of dry lease). weighing 2.(a) Gross . the short ton.Payload achieved as against available. but now its importance is diminished by the marine extension clauses. 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. Shippers.240 pounds. carrier's option.to-Warehouse .240 pounds or 40 cubic feet or of 1 metric ton or 1 cubic meter (e) Weight Ton . Weight . with certain limitations. expressed as a percentage.P.

Virgincita Lomoto Department of Trade and Industry -10 Dir. Nelson N. Cadiz Department of Transportation and Communication . Roger Abaday. Lasquites Mr. Jr.Philippine Ports Authority Engr Efren B. Vivian B. Bollozos Mr. 131 Shipping Costs and Competitiveness In Northern Mindanao . Venchito C. Soloria Mr. Cagayan de Oro City 1st District Confederation of Philippine Exporters Foundation Region 10A Chapter. Hyacinth Flores Department of Finance – Bureau of Customs (DOF-BOC) Atty. Euseña ARD Linda O. Amad Mr. Catubig Ms. Lodie M. Committee on Transport and Utilities Hon. Cabanlet Engr. Jr. Lolita A. Ian Mark Lacaya. Mercader Mr. Liza M. Arturo D. Jenneth Balaba Cagayan de Oro City Council Hon. Lowell L. Santiago Arrabaca. Libao Mr. Medija Department of Public Works & Highways-10 Dir. Mendoza Department of Transportation and Communication . Garcia Department of Transportation and Communication . Cruz. Bellarmine C. Inc. Jerome Dela Rosa Engr. Jaime Rafael U. Honey Gladys A. Councilor. Alicia V. Isidro Butaslac. Paguio Ms. Boniao Ms. Pague Mr. Macapasir Ms.Land Transportation Office-10 Dir. Sulta Porcawa Dia Mr.Maritime Industry Authority-10 Dir. Ramos Ms. Abedin P. Wilson C. Reynaldo B. Alcanzar Ms. Lumbay Ms. Emelia A. Camat Mr. Valledor Ms. Bullecer Ms. Ms. Jr. Emmanuel C. Marianito D. Marlene M. Valencia Atty. Chair. Department of Agriculture Regional Field Unit-10 RED Lealyn A. Roswald J. Artemio A. Lordilie S. Napol G.ACKNOWLEDGEMENT The Study Team wishes to thank and acknowledge the following: Cagayan de Oro Chamber of Commerce and Industry Foundation. Carmelita Bajarla Ms. Enjambre Ms. Mr. Inc. Mr.

Matildo Helia (Truck Driver) Lorenzo Shipping Inc. Lauron Mr. Leon M. Cris Ayonon 132 Shipping Costs and Competitiveness In Northern Mindanao . Elvira Garcia Portmizer. Rey Cababaros Mr. Jr. Mr. Engr. Inc. Peñaloza Oriental Port and Allied Services. Emmanuel Perrales OROPORT Cargohandling Services. Dacanay. Pacampara Ms. Inc. Siao Mr. Estrella R. Inc. Francisco Descallar Manila North Harbor Port. Fernandez Nathan and Associates. Mr. Inc. Edilberto Tiu Filipinas Port Services. Lorimer Moralda PHIVIDEC Industrial Authority Mr. Bartolome Quilab Mr. Heidi Grace Mendoza National Economic and Development Authority-10 Dir. Rafael G. Jose Puentespina Loadout TLC Mr. Jose Mari G. Franklin U. Mr. Edward Peña Mindanao International Container Terminal Services. Lynn Sison Ms.ETX Trucking Services Mr. Clarito Ms. Aris Ramos Quiltrans Prime Carrier Mr.LINC-EG Program Mr. Evangelista. Mar Ybañez Stinis (Manila) Mr. (Makati City) Mr. Jr. Mr. (Cebu City) Eng’r. . Mr. Inc. Rafael G. Dante F. Ferdinand Inacay MCC Transport Corp. Inc. Ms. Inc. Mr. Jaime H. Jobert Jumawan (Truck Driver) Solid Shipping Lines Mr.

cartels and conditions of carriage South Harbor. Maersk Lines The ASEAN Senior Transport Officials Meeting (STOM) The Shippers' Voice . 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).June 30. 2009 ⋅ Xinhua News Agency – CEIS 2005 133 Shipping Costs and Competitiveness In Northern Mindanao . 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.Online and Other References . rates. Manila Sun Star Cagayan de Oro THC Advisory. Chairman .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.A new approach to handling charges by Willy Lin.Hong Kong Shippers' Council Asia-Australia Discussion Agreement (AADA) Australian Competition and Consumer Commission (ACCC) Bureau of Customs Website Bureau of Internal Revenue .

Tan) Project Manager (Michael Joseph R. Romualdez (Technical Staff) Project Admin (Carina B. Sison) Project Consultant (Noel M. Sumugat) 134 Shipping Costs and Competitiveness In Northern Mindanao . Chaves (Technical Staff) Rema Weena C.THE STUDY TEAM LINC-EG Project Adviser (Lynn M. Ignacio) Ofelia Elanea D.

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