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Final Report Shipping Costs and Competitiveness in Northern Mindanao

Final Report Shipping Costs and Competitiveness in Northern Mindanao

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a closer look on Northern Mindanao's state of Competitiveness by Michael Joseph R. Ignacio, Noel M. Tan and Lynn Sison, through the support of USAID's LINC-EG Project
a closer look on Northern Mindanao's state of Competitiveness by Michael Joseph R. Ignacio, Noel M. Tan and Lynn Sison, through the support of USAID's LINC-EG Project

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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

3.4.4 Shipping Lines Survey 4 Issues and Measures 4.1 Breakdown of Port Related Transport Costs 4.4.1 On the World Bank Report 4.3 Transshipment 4.1 Mindanao Container Terminal 4.4.3 Truckers Survey 3. Findings B.2 Costs and Charges for Shipping 4.2 Brokerage and Facilitation Charges 2.4.4.1 Terminal Handling Charge and Other Surcharges A.4.4 Port Operational Issues 4.1.1 Shippers Survey 3.3.1 Survey Implementation 3.2 Profile of Survey Respondents 3.4.2.3 Vessel Dues 4.2 Cagayan de Oro Port 4.3 Results from the Survey 3. 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 Importers Survey 3.1 Trucking and Hauling Rates 2. Legislation is Necessary C.2. Other Shipping Surcharges 4.3 Port Charges 2.3.3.4 Sample Logistics Cost of Exporters 3.

6 Trucking 4.2 Vessel Operations Commitments 5.3.1 Value Added Service Provider (VASP) 5. Clearance and Inspection Costs 4.3 Labor Unions 5.1 RORO 4.10 Freight Equalization Scheme 4.1 Empty Backhaul 4.4 Port Management 5.2 Inspection Areas for Imported Items 5.1 Exports and Exporters 5.2 Trucking Industry 5.8 Securities.3 Customs Clearing 5.4.3.2 DOTC-LTO Fines/Penalties 4.7 Harmony of Policies and Programs 4.4.4.2 Freight Quotations and Rates 4.3 DPWH Weigh Bridges 4.1 International Shipping and Port Security Code 5.5.1 Water Brakes 5.4.6.2.2 24 Hour Delivery Service Provision 5.9 Value Added Tax 4.1 DPWH-PPA Cargo Weight Policies 4.7.4 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 .5.1.2.4.6.6.11 Timely Policy Dissemination 5 Best Practices of Logistics Players 5.1 One Stop Processing Centers 5.

4.5 Business Support Organizations 6.9 Value of Exports Table 2.3 Information Drive 6.4.7 Volume of Exports by Commodity Table 2.2. 2009 13 21 22 23 24 25 25 26 27 28 6 Shipping Costs and Competitiveness In Northern Mindanao .5 Corridor 4 Commodity Flow Table 2.8 Comparative container traffic for both ports in TEU Table 2.4 Wharfage Discounts 6.10 Top Import Commodities for Northern Mindanao.6 Comparative Shipping and Cargo Traffic.5 Port Revenues 5.3 Maintaining Free Inspection Areas 6.2.1 NORMINSA 6. PPA Table 2.1 Some Difficult Road Sections by Corridor Table 2.2 PhilExport 10A 72 72 73 73 73 73 74 74 74 74 74 75 75 75 List of Tables Table 2.5.2 Corridor 1 Commodity Flow Table 2.1 Institutional Coordination 6.5.2 Replicable Best Practices 6.2 BOC’s VASP 6.5.4 Corridor 3 Commodity Flow Table 2.2.6 Port Management Advisory Council (PMAC) 6 Way Forward 6.2.4 Logistics Training 6.1 One Stop Centers 6.3 Corridor 2 Commodity Flow Table 2.

16 Shipping Lines Trucking Rates for Containerized Cargo Table 2.3 Profile of Trucker Respondents Table 3.Table 2.12 Perceived Evolution of Logistical Components by Shippers Table 3.2 Profile of Exporters and Importers Respondents Table 3.5 Outsourcing of Trucking Logistics by Shippers Table 3.8 Evaluation of Quality of Infrastructure by Shippers Table 3.22 Exporting a 40’ Refrigerated Van Table 2.11 Evaluation and Experiences of Selected Export Processes Table 3.19 Comparative Arrastre Rates of Selected Phil.4 Profile of Shipping Lines Respondents Table 3.17 Brokerage and Facilitation of Containerized Cargo Table 2.20 Arrastre and Stevedoring Charges at MCT and CDO Ports Table 2.13 Foreign Shipping Lines operating in Northern Mindanao Table 2.18 Export and Import Processing Charges by Agency Table 2.11 Northern Mindanao’s Exporters Table 2.9 Ranked Logistics Cost by Shippers Table 3.6 Trucking Share to Total Logistics Cost of Shippers Table 3.1 Survey Sampling Table 3.15 Spot Market Trucking Rates for Containerized Cargo Table 2.23 Transshipment Cost Components Table 3.10 Logistics Issues from Shippers 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 .14 Transshipment Cargo from Northern Mindanao Table 2.12 Importers for 2009 Table 2.21 Exporting Lumber through 40’ Dry Van Table 2.7 Shipping Share to Total Logistics Cost of Shippers Table 3. Ports Table 2.

7 Motorela 02 11 12 12 14 14 15 16 8 Shipping Costs and Competitiveness In Northern Mindanao .20 Recommended Solutions for Road Improvements Table 3.14 Assessed Port Charges by Importers Table 3.23 Cargo Tariffs Table 3.24 Rate Port and Freight Conditions by Shipping Lines Table 3.2: Section of the Highway along Mangima Canyon Figure 2.1 Carmen Hill Section Figure 2.Table 3.18 Actual Logistics Costs Incurred by Importers Table 3.26 Ranked Port Charges by Shipping Lines Table 4.3 THC Rates 44 45 45 46 46 47 47 48 48 49 49 50 50 51 52 53 List of Figures Figure 1.2 Cargo Handling activity & applicability of THC Table 4.22 Ranked Operational Expenses of Trucking Firms Table 3.25 Shipping Lines’ Port Operation Conditions Table 3.6 Osmeña Extension to the CDO Port Figure 2.1 Study Area Figure 2.5: Difficult road sections leading to ports from Corridor 2 Figure 2.16 Good Practices to Improve Importation Process Table 3.17 Ranked Importation Costs Table 3.19 Assessed Road Conditions by Truckers Table 3.3: Hazardous Road Section: Mangima Canyon Figure 2.21 Identified Problems at Port by Truckers Table 3.15 Identified Difficult Import Procedures by Importers Table 3.4 Puerto-Bukidnon junction going to Carmen Hill Figure 1.1 Comparative Breakdown of transport costs per TEU Table 4.

12 Export Volumes by Commodity.1 Shippers Survey Form Annex 3.1 Presentation of Study Results to Relevant Stakeholders Annex 1.4 Shipping Lines Survey Form Annex 4.8 Pedicab.5 Trailer Horse Figure 4.10 Vehicular Traffic at CDO Port Southern Gate Figure 2.6 Motorcab Figure 4.2 Highlights of the Validation Meetings Annex 3.4 Workflow for CHA-RO (RORO/PAX) Figure 4.1 PPA reported CDO Port's Annual BOR was beyond 65% in 2009 16 18 19 20 27 57 Figure 4.2 LTO Fines and Penalties Glossary of Terms and Abbreviations Acknowledgements The Study Team 9 Shipping Costs and Competitiveness In Northern Mindanao .2 Balingoan-Benoni RORO Vessel.3 Truckers Survey Form Annex 3.11 The Mindanao Container Terminal (MCT) Figure 2.9 The Cagayan de Oro Base Port Figure 2. Wing Vans ideal for RORO 59 Figure 4.3 Container Vans unloaded from a RORO/Pax Vessel Figure 4.2 Importers and Cargo Forwarders Survey Form Annex 3. 2009 Figure 4.Figure 2.7 MCT Weighbridges 60 61 63 66 67 List of Annexes Annex 1.1: Maersk Line THC Table Annex 4. locally known as Trisikad Figure 2.

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

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

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

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

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

5 Study Methodology and Approach The study was conducted from December 2009 till April 2010. including promising commodities such as vegetables. as well as the various supply chains of major agricultural commodities of Mindanao. While the Medium Term Philippine Development Plan (MTPDP) is the best basis for government programs and initiatives. 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. the study highly recommends for additional official development assistance on the following: 1. Expansion of MCT.1. 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. On the whole. 6 Shipping Costs and Competitiveness In Northern Mindanao . coconut as food and vegetable oil. and 5. especially export winners such as fresh fruits pineapple & banana.1 A review on government’s infrastructure initiatives: a. Japan). The study however barely touched on the transport cost structure of Northern Mindanao’s exports and imports.5.8 Mindanao Logistics Infrastructure Improvement Project August. Additional market researches with focus on the cold chain to encourage more production of other crops such as vegetables. The study also reinforced government’s plans and programs for agriculture and farmto-market road development which will integrate. 2009. improve. The study provided a detailed description of Northern Mindanao’s shipping system. 1. 2. these enumerated studies highlighted Northern Mindanao’s logistical problems and possible solutions. and increase productivity and flow cargo. Establishment of an agribusiness center (patterned after the Makubetsu Agricultural Coop in Hokkaido. The following activities took place: 1. 4. 3.4. Establishment of a “Container highway” leading to MCT and CDO Port. Establishment of RORO traffic for CDO/MCT and Batangas Port. Apart from other recommendations.

5. 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). Cargo forwarders and importers . PhilExport-10A has also compiled policies issued over the years.especially companies importing raw materials for export. Port Statistics from PPA offices and from the Philippine Veterans Investment Development Corporation (PHIVIDEC) Industrial Authority d. The team also secured other related policies during mutli-sectoral activities like the CIQS (CustomsImmigration-Quarantine and Security) Northern Mindanao Consultative Committee. 1.2 Collection and review of information from past studies and official data from government agencies and local governments. Socio-economic information from the Department of Trade and Industry and the National Economic and Development Authority 1. Shippers .3 Conduct of surveys and interviews of industry key players and some government officials in the region.PhilExport member service providers and members of the Cagayan de Oro Port Truckers’ Association as well as other independent truckers. 7 Shipping Costs and Competitiveness In Northern Mindanao . Import Data from the Bureau of Customs and the Philippine Ports Authority (PPA) c. b. Truckers . The surveys were undertaken from February till end of March 2010. the Regional Development Council (RDC) and during other consultations by these respective agencies. enacted laws and implementing rules and regulations. These policies are in the form of memo circulars. domestic shipping lines and Non-Vessel Operating Common Carriers (NVOCCs).foreign shipping lines calling the ports of Cagayan de Oro (CDO) and Mindanao Container Terminal (MCT). Shipping Lines .exporting PhilExport10A members and other exporters. department orders and the like. Export data from the Bureau of Customs (BOC) and the Department of Trade and Industry (DTI) b.5. c.b. The target key players and participants were: a. which include: a. d.

1. Inc. Inc. 8 Shipping Costs and Competitiveness In Northern Mindanao . Most of the survey sheets were hand delivered with priority given to PhilExport 10A members while the others were either sent through courier. 2010. 1. separate interviews with key respondent companies (either their managers or their import/export staff) were done to ensure that these data were secured.5. 1. Most survey target respondents had problems completing the survey sheets due to the daily power interruptions and their need to maximize power availability. Study results and recommendations are presented and validated during the stakeholders’ meeting on April 6. the terminal operator of MCT.7 Report writing This final activity documents all interpretation and findings of the study. 2010 which provided feedback in improving the survey mode and survey instrument.1 and the presentation material is shown in Annex 1. fax or email (as requested by the target respondents).2.4 Validation session and survey trials The survey questionnaires were drafted early January. The attendance list of said meeting is attached as Annex 1.5.6 Completion of actual logistics cost structures based on transport cost standards While the survey sheets provided questions on the cost components. OROPORT Cargohandling Services.. A trial survey was conducted on January 14. fearful of compromising business positions. 1.5. (MICTSI).5. Follow-ups of respondents were done on a daily basis.e. Others were apprehensive to respond. the cargo handling operator of CDO Port and the Mindanao International Container Terminal Services.5 Data processing and analysis Data collection and processing were done as soon as each data was secured especially for survey sheets.

Camiguin is the perfect place for tourism adventures. Misamis Oriental is also an industrial hub of the region.1. and on the East by Agusan Provinces and Davao. fruits and other commercial crops such as abaca. Gingoog. a place of natural beauty. Misamis Occidental. 2 Northern Mindanao Socio Economic Profiles from NEDA-10.1 Spatial Character of Northern Mindanao2 Northern Mindanao is bounded on the North by Bohol Sea. It is one of three major prawn. Valencia. 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. The province is traversed by several rivers. it is 4. Misamis Oriental in the north. 11 Congressional districts. on the South by Lanao del Sur and North Cotabato. and Tangub.579 with an average annual growth rate of 2. clear mountain springs and waterfalls and rustic old world charm. while in urban areas. The island of Camiguin is a place of unspoiled beauty. It is the base for most of the region’s aquaculture industries. Lanao del Norte and Misamis Occidental in the west. The region consists of five provinces composed of the landlocked province of Bukidnon in the south.018. Ozamis. Lanao del Norte is the newest province added to the Northern Mindanao region. and 2. the cities of Cagayan de Oro. rice. shrimp and squid spawning grounds in the Philippines.617 hectares with a population of about 4.193. DTI-10. coffee. Oroquieta. on the West by Zamboanga provinces. wetlands. Bukidnon has vast agricultural resources which are highly suitable for most types of crops like corn. vegetables crops. The province used to belong to the Central Mindanao region. livestock. Cagayan de Oro hosting a regional airport. Malaybalay. It is home to the regional capital.846. the island of Camiguin in the northeast.685. unspoiled forests and rich fertile soils.05 per square kilometer. DA-RFU 10 9 Shipping Costs and Competitiveness In Northern Mindanao . white sandy beaches.1 Infrastructure Logistics Conditions 2. rubber and sugarcane. Iligan.020 barangays. Population density in the rural areas is 1.4%. The total area of the region is 2. poultry and dairy are also produced in large quantities in the province supplying the needs of neighboring provinces and cities.37 per square kilometer. It is the region's food basket and primary supplier of raw materials for processing in the various agri-industrial centers of the region. a total of 85 municipalities. Moreover.2 LOGISTICS CONDITIONS IN NORTHERN MINDANAO 2. international seaports. first class hotels and variety of agri-based and other manufacturing industries.

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

vehicles are reduced to a crawl of approximately five kilometers per hour. The Sayre Highway though paved predominantly by asphalt traverses sections with deep ravines and cliffs such as the Manolo Fortich Section. Along this very important stretch of national road is the soon to be operational Laguindingan International Airport. A short section has been recently rehabilitated but was not widened. 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. The hazardous road sections are shown in Figures 2. Ozamis. 11 Shipping Costs and Competitiveness In Northern Mindanao . Carmen Hill section is a narrow two lane road. cement and wood products. Cagayan de Oro City to Kabacan. Corridor 2: Western Misamis Oriental This coastal highway connects Cagayan de Oro City to the cities of Iligan. improving and protecting this road section is of vital importance as the airport’s international status is expected to attract cargo traffic. Pagadian and Zamboanga. winding and steep. As vehicles Figure 2. The peak hour traffic volume at this section was around 500 vehicles per hour. Accidents involving hauling trucks carrying various Bukidnon products are common occurrences along this stretch of national road. North Cotabato passing through the province of Bukidnon. between Puerto. Mangima section and Damay pass. The Cagayan-Iligan link was developed in the 1970’s and is fairly in good condition with concrete re-blocking undertaken last year.1 Carmen Hill Section. 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. C. This is a “no passing” section but faster vehicles will always try to overtake laden trucks which poses danger to motorists. Though current airfreight export volume contribution is negligible. Owing to its relatively flat terrain.B.2. cannot gain Manolo Fortich. Corridor 3: Eastern Bukidnon Sayre Highway is the portion of the Philippine national highway that starts from Puerto. Bukidnon momentum due to congestion. Dipolog.1 and 2. Cagayan de Oro & Ala-e. this road probably carries the heaviest cargo loads comprising of steel.

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.

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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

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Shipping Costs and Competitiveness In Northern Mindanao

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

Figure 2.7: Motorela Some other obstructions include a barangay outpost. Before reaching the port gate. as Trisikad 16 Shipping Costs and Competitiveness In Northern Mindanao . and illegal structures. 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.8 Pedicab. Along Gaabucayan Street are structures that impede traffic flow such as a vulcanizing shop. plywood and steel bars. thus impeding traffic flow.The left lane is oftentimes occupied by passenger jeeps loading and unloading passengers leading to the intersection. At times. This is also used by motorelas and trisikads (pedicabs). These impede traffic flow with forklifts using the road to load and unload cement. appropriation by some businesses of the sidewalks. 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. Coca Cola have not provided parking for these delivery 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. Figure 2. Cargo trucks will then turn right from Osmeña street extension to Gaabucayan street before turning right to Corrales street extension leading to the port. However. This intersection is un-signaled and can often result in gridlocks. 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. 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. After turning from the highway. The opposing two lanes is also tight as unserviceable vehicles. 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. locally known Motorelas and trisikads are also allowed on this road. a car repair shop that occupied the sidewalks and a store constructed on the sidewalk. motorelas and debris occupy part of the road and most of the sidewalk. illegal parked trucks. 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.

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

and (vi) 14 units 1. It is also capable of handling containerized. (v) 43 units of 3ton forklifts.000 TEUs of containerized cargo and at least four million tons of general. etc.5-ton electric forklifts. liquid bulk and break bulk cargoes. as part of its cargo handling fleet. CDO Port cargo handling operator established a cold storage facility with a capacity of 100. In 2008. (iii) 2 units 45-ton toplifts. (ii) 2 units of 45-ton reach stackers.1.2. Port of Cagayan De Oro The port of Cagayan de Oro is the biggest port in Mindanao with a total berth length of 1. bulk. The port is also equipped. liquid bulk.000 boxes of fresh banana and pineapple for export markets exclusively used by Del Monte Fresh International.200 linear meters and over 23 hectares of back up area and container yards (a 50 meter wharf extension and 4. passenger and RORO vessels.500 square meters of reclaimed back-up area is being planned for implementation this year).000 TEUs of containerized cargoes. Figure 2. A brief description of both these commercial ports is given below.3 Ports and Port Facilities Northern Mindanao boasts of two modern international port facilities with a combined potential capacity of 500. A. Mindanao’s traditional gateway is a multi-purpose port catering to domestic as well as import/export cargoes. bulk. (iv) 7 units 25-ton forklifts. general and break bulk cargoes. 18 Shipping Costs and Competitiveness In Northern Mindanao .9: The Cagayan de Oro Base Port The Cagayan de Oro port has an annual potential capacity of at least 300. the following: (i) 1 unit of ship to shore gantry crane.

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.

(ICTSI). catalyzing Northern Mindanao's role as domestic food basket and agri-industrial exporter. 20 Shipping Costs and Competitiveness In Northern Mindanao . 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 2.11: The Mindanao Container Terminal (MCT) containerized and semi-containerized domestic and foreign vessels with an annual capacity of 270. The berth length of the port measures 300 meters and 13 meter draft. Tagoloan.000 twenty equivalent units (TEUs) with a 9. Port facilities include 2 quayside gantry cranes and four rubber-tired gantry cranes and 262 reefer outlets.. one of the key infrastructure envisioned to jump start the island's economic potential.B. The port was privatized in 2008 and is now operated as a subsidiary of the International Container Terminal Services. Mindanao Container Terminal The Mindanao Container Terminal (MCT) at the PHIVIDEC Industrial Estate. Inc. It can accommodate container vessels up to 30. The MCT has been identified as a Mindanao flagship project.4-hectare container yard. 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.000 DWT.

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

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

and the towns of Baungon and Talakag. pineapple & sugarcane by-products Source: Compiled from DTI. 23 Shipping Costs and Competitiveness In Northern Mindanao . This area has its share of irrigation. Bukidnon. vegetables and livestock are located along these areas. Table 2. Europe & Japan Food Cut flowers (via air) Resourcebased Mineral: Copper ore Wood: Lumber Others: rubber cup lumps. Corridor 4: Western Bukidnon These are areas along the Cagayan de Oro-Talakag Road. irrigated areas are limited. yet to be developed or needs improvement.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 . Impasug-ong. including the cities of Malaybalay and Valencia. Large plantations and contract farms of fruit. particularly the hinterlands of Cagayan de Oro. because of the terrain. PhilExport and BOC data. Maramag and Quezon. Asia China China & USA Europe & Asia D.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. 2009. Bukidnon is known as the food basket of Northern Mindanao. Bukidnon. Major roads are all-weather concrete paved but most of the farm to market roads are either. Corridor 3: Eastern Bukidnon Areas along the Sayre Highway from Cagayan de Oro to the towns of Manolo Fortich. affecting agricultural production despite technologies and techniques applied on ground. Irrigation facilities are in place with enough water supply for yearround agricultural production. however. Similar to Corridors 1 and 2.C.

2009. However. The PPA 2008 and 2009 statistics show a slightly lower volume than the study team’s data. 2. the exports/imports through airports are negligible as only export samples are the usual commodities sent out.Table 2. PPA statistics are aggregated to broader categories as to import and export cargo by packing type rather than details on commodities. 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.6 and 2. the Department of Trade and Industry and PhilExport’s One-stop Export Processing Center. As such. The data on export and import volumes passing through the ports are reported by the Philippine Ports Authority based on ships’ manifests. PhilExport and BOC data. For Northern Mindanao.2.Mineral: Copper ore Source: Compiled from DTI. 24 Shipping Costs and Competitiveness In Northern Mindanao .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 . But the general trend is the same in that there is a decrease in the total volumes from the previous year 2008 (see Tables 2.8).

837.11 137.770) (25.09 2008-2009 Variance (%) -31 25 -16 -29 -34 -10 13 10 -62 -89 -17 -51 10 -31 Ave.5 13.393 14.78 29.255) (18.74 2.284) (3.525.42 187.393 769.24 69.8 -2.381 24.130) (877) (253) (22.664.511.306 10.826.95 63.636 Inc (Dec) variance % (1.226.061 1.460.T.427.1 -19.751 60.499 9. PPA Particulars A. Container Traffic (baseports) Domestic Inbound Outbound Foreign Import Export 2009 12.232.020.07 53.19 254.457 12.090.359.58 2.533) (94.485 (3.16 27.488) (1.25 8.00 23.905.346.06 231.43 134.964.R.921 62. Domestic Foreign Total Waiting Time Domestic Foreign Total Service Time Domestic Foreign B.835) (3.712 2.8 3.7: 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 236.385.936 4.172.Table 2.050) (537. 2008 and 2009 Table 2.82 26.9 25 Shipping Costs and Competitiveness In Northern Mindanao .407) (252.98 34.459) (45.557.601) (392.543 1.08 456.81 101.97 333.136.620) (169.22 52.6 Comparative Shipping and Cargo Traffic.057.618 1.192.255.679.610.925) (20.050.087 2008 14.45 5.334 836.371.32 109.777 5.428 10.449) (2.19 55.652 150.5 57.047.888.758.293.860 675.435.019 610 249.088.983. Growth (%) 15.87 2.629 10.31 92.453 10.11 2009 386.003.672.6 12.110.403.4 2.860 116.453) (35) (707.02 278.707.99 295.088.477 4.974.075 3.82 17.80 119.96 14.176.858.5 15.741 1.52 148.780 18.838.59 33.434 22.24 233.549) -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.039. Total Cargo (m tons) Domestic Trade Inbound Outbound Foreign Trade Import Export C.51 352.499.208 123.62 6.605.281.430) (1.467 57.78 17.064) 1.30 322.01 5.847.679. Shipping Traffic Number of Shipcalls Domestic Foreign Total G.348) (7.200.55 16.027 13.504.905.53 35.13 2007 272.126) (9.1 3659.695.140.172 367 13.186.174.526 140.01 163.87 2008 557.830.7 65.686.83 12.78 159.503 10.2 43942.09 322.68 20.764.342.49 909.998 9.924.4 -13.144.156) (346.821 13.49 412.086 59.635.142 357 227.93 216.6 121.455 3.40 2.482 2.539 12.812 227.557 208.625 402 14.50 189.666.015.502.830 26.378 6.403.654) (3.64 212.905 1.15 382.698.

Coconut-based products posted 47% of total volume in the industrial sector and 5% of the food sector.060.316.5 21.134 8.115.440.5% yearly increase in volumes was realized between 2006 and 2009. Inc were segregated since they have their own port facilities and 100% of their export pass through their respective ports in bulk.841 Total 45.897.45 725.829 72. Total NM Exports 1 2006 317. and wood posted positive growths of 2.51 1. The top commodity.104. Table 2.137. On a four-year growth analysis.78 2007 554.808 18. fresh and processed food products are exported worldwide. 26 Shipping Costs and Competitiveness In Northern Mindanao . on the other hand.03 4.033 51.618.772 CDO 12.01 742.4% for the food sector. which excludes the export volumes of large industries using their own ports.361.16 2008-2009 Variance (%) 263 -20 -28 -35 -27 Ave.7 shows the shares of commodities to total export volumes for 2009.295.79 2008 548. Coconut. Other top commodities such as processed food.00 293.804 28.337 Total 24.95 555. The markets for these commodities are indicated in Table 2.172 17. Sinter Corp.942 26.796 20. it is noted that that total FCL (full container load) traffic accounting to about 72.613.771 For 2009.00 5.000 metric tons. coconut-based products. Source: Compiled by the Study Team based on records from BOC.5.000 metric tons of export cargo while the study team’s data shows a total of 1.90 6.793.4 -16.16 3. non dipterocarp types. HOLCIM Phils.632 11. On the whole. This is followed by food products (fresh and processed) with 26% and by resource-based products with 18% of total exports.435 MCT 14.43 17..9 -6.968 53.21 448.032.832.395. and HOLCIM Phils. Figure 2. It should be noted that the wood products are of the commercially grown.032. iron and steel.76 909.5 -10.36 742.284. Most of the resource-based products.431. Growth (%) 131.88 1.053. While the overall cargo traffic has gone down compared to the previous year.319.5%. an average of 21.2%. posted a strong growth of 57% in the industry sector but a slight dip of -2.165 31.085.874.418.14 2009 1.8: Comparative container traffic for both ports in TEU Container Traffic (FCL only) Import Export Total 2008 CDO 10. industrial commodities accounts for 56% of total export volumes. are exported to China and the USA.497. DTI and Philexport10A One-stop Export Documentation Center. respectively.481.803 22.990.2 to 2.930 2009 MCT 33.00 4. 13. Sinter Corp.8% and 121.771 TEUs has increased in 2009. PPA reports a total of 837.1 Note: Volume of Phil.02 5.Sector Special Transactions Sub-total (Commercial Ports) Phil.

41 19.31 109.92 133.0 5.0 56.77 389.21 21.7 5.63 600.57 125.00 36.3 2.73 19.Table 2. and HOLCIM Phils.00 11.34 537.53 23. Total NM Exports 1 2006 135.76 31.71 56.32 1.86 63.97 27.5 -9.92 9.61 1. DTI & Philexport10A One-stop Export Documentation Center.38 10.19 67.83 35.7 -10.72 Ave.62 1.71 55.45 10.1 160. HOLCIM Phils.8 -14.77 0.94 3.02 3.69 0.30 22. Sinter Corp.27 2009 161. 2009 Source: Compiled by the Study Team based on records from BOC.53 70.42 0.50 830.81 1.97 844.9 -2.7 Export Volumes by Commodity.49 1.19 245. Sinter Corp.1 Note: Values of Phil.59 53. Growth (%) 4. Source: Compiled by the Study Team based on records from BOC.43 20.59 357.95 45.02 526.2 24.13 3. Figure 2.67 257.60 62.42 478.15 26.5 5.46 23.20 33. DTI and Philexport10A One-stop Export Documentation Center.5 44.1 -3.7 139.38 10.49 157.50 21.5 -3.00 24.91 4.41 94.0018 0.9 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.77 90.57 323.78 39.47 288.30 463.62 245.57 2007 149.83 1.73 5..75 1.3 -4.43 116. 27 Shipping Costs and Competitiveness In Northern Mindanao .0 -21.13 921.87 12.92 2008 252.44 1.92 542. Inc were segregated since they have their own port facilities and 100% of their exports pass through their respective ports in bulk.45 204.57 18.

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

– INPORT(1977)) has been providing cargo handling services at the port since 1999.000 4. (Celebes Oil) 2. however. since its merger (between Continental Arrastre and Stevedoring Co. Inc.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. (MICTSI).000 6. Inc.000 14. radius El Salvador.000 3.000 112 223 P37/km P62/km 31/km/unit Bukidnon (BUSCO) 11. Inc. With this system. (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. model and type. Mindanao Container Terminal is operated by the Mindanao International Container Terminal Services. Inc. Mis.4. Prevailing spot market trucking rates are usually paid on cash. overloading becomes a major issue.500 4.000 12. – CASCO (1986) and Gold City Integrated Port Services. 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.. Cargo Handling Operators Cagayan de Oro Port is managed by the Philippine Port Authority’s Port Management Office and contracted OROPORT Cargohandling Services. short term credit and/or short term credit with diesel cost paid in advance. Inc. Table 2. a subsidiary of the International Container Terminal Services.000 13. as its cargo handling service provider. Mis. Or (Sanwa) Iligan City (Global Steel) 8.000 18. which took over terminal operations in 2008. 2.000 Dist.000 94 188 P42/km P63/km 35/km/unit 31 Shipping Costs and Competitiveness In Northern Mindanao . OROPORT.000 16.000 127 254 P43/km P62/km 35/km/unit Medina.500 6. The 10-wheeler semi truck with 40-foot trailers can load two units of 20-foot containers (tandem load)..1 Trucking and Hauling Rates The trucking fleet in Northern Mindanao is primarily composed of Japanese and American surplus trucks of various age. trucking rates per container unit becomes cheaper.500 14.4 Logistics Costs/Charges for Exports and Imports 2.E.

40 5.20 20.438.30 Lagonglong 37 4.00 15.957.60 9.787.642.00 Jasaan 15 2.00 Manticao 84 7.50 11.983.70 12.284.710.00 Naawan 80 7.223.6 to 18 2.00 19.750.531.686.992. which usually includes empty positioning/return.00 9.076.686.651.00 Salay 45 5.75 Binuangan 53 5.650.644.393.155.50 El Salvador 38 4.018.914.70 6.00 17.338.00 Iligan City 108 9.10 12.00 Gitagum 56 5.44 5.875.855.00 10.35 Kinoguitan 72 6.15.744.489.00 12.322.009.60 Magsaysay 112 10.22 2.00 32 Shipping Costs and Competitiveness In Northern Mindanao .076.980.00 5.70 17.325.95 MCT to Western Misamis Oriental Opol 28 3.85 3.7 2.75 Balingasag 30 3.90 14.22 2.00 Laguindingan 50 5.446.00 Source: Philippine Liner Shipping Association (PLSA) Destination 40 Footer Dry Non-VAT VAT-in 4.796.10 Gingoog 102 10.063.20 20. Bugo to CDO proper 1.542.00 14.578.218.00 Lugait 93 8.00 5.00 15.85 Medina 94 8.990.796.991.00 CDO Proper 18 2.00 4.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.00 11.669.659.153.20 MCT to Eastern Misamis Oriental Villanueva 3.372.372.372.15 Shipping Lines Trucking Published Rates Containerized Cargo Door to Door Service (in PhP) Distance 20 Footer Dry (Kms) Non-VAT VAT-in MCT. This is shown in Table 2. Table 2.50 Libertad 62 6.489.398.50 Initao 72 7.00 10.325.40 13.55 Sugbongcogon 64 6.156.00 8.95 Talisayan 80 7.44 5.271.152.755.00 Alubijid 45 4.00 Carmen/Kauswagan/Bulua 20 to 25 2.311.744.996.686.877.20 Balingoan 76 6.829.398.50 7.90 7.

17.500 7.000/application Php100 Php30 Php5.000 7.500 Source: Compiled from Bill of Ladings Table 2.000 Total Unit Cost (PhP) 32. 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 2.40’* Container Security Fee .000 8. 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 2.000/application Php100 Php30 Php5.000 15.500 2.500 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 2.40’* 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) Php1.500 Facilitation Unit Fee (PhP) 30.834 5.500 6.000 10.500 10.500 2.500 7.4.500 2.16.000/BL 33 Shipping Costs and Competitiveness In Northern Mindanao .786 6.500 12.2.000/BL Php100.000/application Php1.000/BL Php50.500 17.334 3.500 2.000 5. Table 2.750 3.250 5.000/application Php1.000/BL Php1.000/BL Php3.500 2.17 Export and Import Processing Charges by Agency Cost Item Containerized Cargo Due to Customs :Processing Fee Container Security Fee .500 2.000 US$10 US$5 Php3.500 2.000 4.16 Brokerage and Facilitation of Containerized Cargo No.286 3.

077 3. However.19).2.00 1.19 Arrastre and Stevedoring Charges at MCT and CDO Ports FCL Containers Domestic Import/Export Arrastre 903.436 1Arrastre rates (Terminal Handling) for major ports in Mindanao under the jurisdiction of the Philippine Ports Authority (PPA). It is evident that a uniform Mindanao-wide arrastre rate is used while those of Cebu and MICT (Manila) are different and much higher.797 1.00 40’ Source: PPA CDO and MCT Tariff 34 Shipping Costs and Competitiveness In Northern Mindanao .241 7.3 Port Charges Costs incurred at the port are the arrastre and stevedoring charges.797 Davao – Sasa 974. 1.797 1.50 20’ 1.465 2.448 Manila – MICT 2.00 20’ 273. MCT Tariff.18 for the Northern Mindanao ports in comparison to other international ports in the country.465 1.50 1. CIP.806.797. stevedoring rates at these ports favor the domestic-bound containers as they are considerably lower than their import/export counterparts. Davao Port Tariff.50 1.797 PHIVIDEC – MCT 974.50 1.797 Cebu – Cebu Int’l.4. Table 2.646 6.50 603. namely Cagayan de Oro.797 1. ICTSI Tariff Port Table 2.207. 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 2.448 2.50 974. The rates are shown in Table 2. Source: PPA CDO.50 974.18 Comparative Arrastre Rates of Selected Philippine International Ports1 20 Footer FCL 40 Footer FCL Import Export Import Export CDO – CDO Port 974.50 974.00 40’ Stevedoring 273. Davao and General Santos had been leveled as of August 2009. The 40 footers for the import/export are even slightly lower than the domestic-bound containers.50 1.50 974.

00 5.3 0.6 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 58.500.5 2.20 2.00 1.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) 5.00 4. Freight cost for a 40-footer reefer.21 for a better understanding of the recent export cost structure to a destination within Asia.491.000. Table 2.74 3. all costs actually incurred are documented.2.00 900. Freight cost is shown to account for almost 40% of total cost for a dry 40-footer.1 2.200.74 Actual (PhP) 28.00 219.00 20.00/CBM 1.00 1.64 134.0 1.068.2 6.4 0.0 1.437.500.987.00 575.5 10.740.4 Sample Logistics Cost of Exporters Based on several receipts and financial records of exporters and importers.4.20 Exporter’s Cost .990.20 and 2.200.64 134.09 100. on the other hand.00 900.1 2.02 179. accounts for 78% of export cost.2 0.000.3 3.00 20.00 1.0 Source: Compiled by the Study Team from actual cost disbursements of exporters. A representative sample of how costs run for a dry and reefer 40-footer are presented in Tables 2.50 150.500.012.20 2. The informal cost incurred is quite high at 20% of total cost.00 438.00 150.3 Share to Total (%) 49.00 1.00 7. 35 Shipping Costs and Competitiveness In Northern Mindanao .03 179.5 0.

1 0.000.053 for a 40-footer is noted with the use of the RORO.6 3.00 1. Table 2.1 0.00 150.00 10.00 4.98 56.4 0.50 for a 20-footer and Php2. 36 Shipping Costs and Competitiveness In Northern Mindanao .9 5.00 575.120.21 Exporter's Cost .012.00 Source: Compiled by the Study Team from actual cost disbursements of exporters.00 1. The latter transport system is the development thrust of the government to improve inter-island movement of goods and passengers.22 gives the build up of costs to be incurred for transshipped goods using the conventional and the RORO.00 10.0 0. the cost benefit of using the RORO as against the conventional is negligible.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. only a savings of Php1.2 1.20 437.00 per EO 554 Informal cost (per bill of lading) informal cost (per export declaration) Total 153.830.200.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 2.990.9 6.00 900. Ozamis and Butuan do not have direct foreign containerized shipping calls due to low cargo volume.82 100.600.012. it is meant to bring down transport costs but with the current system of handling employed. and wharfage charges.00 1. due to very high domestic freight rates.795.3 0.595.00 150.00 1. Presently.00 Share to Total (%) 77.64 179.00 7.102.00 3.00 150.200.380.1 0.1 0. handling. Many ports of Northern Mindanao particularly Iligan.1 1. Presently.64 179.1 0.Table2.0 2. That is.20 Published (PhP) Actual (PhP) 119.3 0. Among others. domestic transshipment of FCL containers is not a viable option for Mindanao shippers/exporters since the cost is too high. exporters from these areas truck their products to Cagayan de Oro or MCT to have access to foreign shipping.200.

00 2.418.960.Table 2.760.00 31.00 3.00 202.00 862.00) 40 Footer 862.00 20.98 43.00 437.032.50) CHA-RO Source: Compiled from tariffs of PPA CDO.00 431.864.646.00 437.98 43.00 437. 37 Shipping Costs and Competitiveness In Northern Mindanao .00 7.085.640.913.646.98 Difference between 20 Footer Conventional and (1.187.077.50 40 Footer 1.00 1. MICT.00 63.00 202.00 7. Shipping lines.960.22 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 3.00 437.917.760.00 202.418.00 3.980.00 2.102.00 2.913.50 202.077.00 437.032.640.00 40 Footer (2.00 202.00 2.00 3.00 990.797.053.00 6.00 20.00 6.98 CHA-RO 20 Footer 431.00 32.00 65.00 202. and Truckers.00 437.

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

0 0. For the shipping companies.6 NEDA classifications Source: Logistics Survey.1 0.0 7. A fair distribution of the respondents by size of business is noted. however. Table 3.7 0.9 50.9 21. Some of the importers (i.7 57.0 0. of Importers 14 0 0 0 6 7 1 0 5 8 0 6 3 1 4 Distribution (%) 100. There is one large sized trucking firm owning a fleet of hundreds of trucks.0 14.4. five respondents are foreign liners and one is a non-vessel operating carrier company (NVOCC).0 14.. 3.0 35.0 42. 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 35.3 14.0 0. Two of the respondents. The total number of vessels calling at Northern Mindanao is 11 but the frequency of calls is 6 vessels weekly. of Exporters 14 2 2 2 5 3 2 0 12 0 0 2 4 4 4 Distribution (%) 100.4 14. are more of the service business types (such as forwarders) servicing the exporters.3 28.2 Profile of Survey Respondents The profiles of the survey respondents by target group are presented in Tables 3. For the shippers/exporters. 2010 39 Shipping Costs and Competitiveness In Northern Mindanao .7 21. on the other hand. which is discussed in section 2. 6 firms) are actually the exporters themselves importing their raw material requirements.0 0.1 28.in the comparative cost analysis against the published rates gathered from relevant agencies and entities.4 7. The trucker respondents are more on the micro business size owning about 1 to 3 trucks.6 No.3 0.e. All firms have vessels calling at MICT port but only one firm has vessels calling at CDO port.2 Profile of Exporters and Importers Respondents Exporters Item No.2 to 3. The importers.1 0. are importers for the domestic market only.4 of this report.6 28. Most of these firms acquired second-hand or surplus vehicles for their operation and many are operating on a “for hire” basis. respondents from all industry sectors are covered with many in the manufacturing type of business.0 85.6 28.0 42.3 14.

Even with costs reaching 26% to 50% of total cost. 1 1 2 2 2 3 1 4 6 5 1 6 1 - Conventional Containerized Singapore Weekly 1108 1. is substantial for most of the surveyed companies accounting for more than 75% of total logistics cost (see Table 3.5 and 3. This is true for exporters in all industry sectors especially since trucking cost make up less than 10% of their total logistics cost.0 37.7). on the other hand.0 12.5 25.200 220 1. of Ships Calling CDO Port Vessel Types Origin/Destination Call Frequency Ship Capacity (in TEUs) Ship Capacity (reefer plugs) 712 & 1. US Hong Kong Respondent No. 2010 3.114 & 1. This may be explained by the proximity of most shippers of less than 20 Kilometers from the ports. of Truckers 8 3 2 2 1 5 1 2 1 7 Distribution 100.0 12.5 25.5 62.6). 2010 No.1 Shippers Survey Most of the shippers or exporters surveyed apparently outsource their trucking logistics instead of maintaining their own fleet.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.5 87. trucking still remains an outsourced service (see Tables 3.3 Results from the Survey 3. of Ships Calling MCT Port No.0 25. 40 Shipping Costs and Competitiveness In Northern Mindanao .300 100 China Japan Singapore Source: Northern Mindanao Logistics Survey.5 Table 3.049 220 & 180 Asia.338 220 & 449 1. Shipping cost.5 12.Table 3.3. Europe.4 Profile of Shipping Lines Respondents Vessel Information No.

2010 Based on the evaluation of the present logistics infrastructure shown in Table 3.25%. e: More than 75% Source: Northern Mindanao Logistics Survey. b: 10% . b: 10% .75%. Warehouses are just average in quality. 2010 Table 3.Table 3.8. and telecommunication services are found adequate (either average or highly adequate).3 7. e: More than 75% Source: Northern Mindanao Logistics Survey.50%.1 Source: Northern Mindanao Logistics Survey. 2010 Table 3.7 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%.75%. roads and highways.1 14. 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 (%) 71.6 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%. d: 51% .50%. 41 Shipping Costs and Competitiveness In Northern Mindanao .4 7.25%. the quality of ports. c: 26% . d: 51% .

freight is revealed as highest cost followed by the trucking cost.high Infrastructure .4 13.0 13. 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. Another nagging issue on the software aspects of logistics is the difficult and time consuming export documentation/ clearance procedures.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. Table 3.Table 3.10 and 3.0 42 Shipping Costs and Competitiveness In Northern Mindanao . 2010 Number of Samples 8 4 4 3 3 1 23 % of Responses 34. 2010 Evaluation of Quality (% of answers) Very Very High Ave.9).poor Total Source: Northern Mindanao Logistics Survey.4 17.complicated Fuel/Transport Cost .3 100.8 Evaluation of Quality of Infrastructure by Shippers Logistics Infrastructure Ports Roads and Highway Warehouse Telecom Infrastructure & Services Total Source: Northern Mindanao Logistics Survey.11. 2010 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.poor Informal Charges .0 4.8 17.10 Logistics Issues from Shippers Identified Issues Freight charges .high Shipping Schedules .high Doc Processing . 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.

Stolen cargo) Solicitation of Informal Payments Source: Northern Mindanao Logistics Survey. Table 3.3 41.3 7.0 58.3 28.3 8.7 Table 3.0 33.0 Despite the poor rating of logistical conditions. Likewise. those exporters with import activities especially for their raw material inputs provided freight costs of their imports. 2010 Development of Logistics Conditions (in % of responses) About Much Much Worse Better the Worse Better Same 75.7 25. However.7 8.6 14. telecommunications.3 25.3 8.3 7.4 14. customs. port clearance and business environment are perceived to be same (see Table 3.3 66.3 50.7 16.13 summarizes the freight costs provided by the shippers by type of commodity and by destination.9 21.12 cbm China Europe USA Europe 3.000 3.0 41.3 16.6 35.0 8.3 16.7 58.1 28. Table 3.3 33. Improvements were noted for the quality of infrastructure.7 25.3 8.3 75.3 25.000 39.7 8.1 28.4 14.7 8.g.12).3 8.0 8.13 Freight Costs by Commodity of Exporters Export Commodity Freight Cost (PhP) 24.6 41.7 14.3 16.Table 3.7 58.3 16.3 66.0 8.3 8.12 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.3 42.0 25.7 16.7 14.000 Shipment Mode C&F FOB FOB FOB Domestic Shipment Freight Cost (PhP) Package Destinations Package Wood Silicon Silicon Paper Products 40' 20' 20' 3. the shippers perceived some of the components to have improved in the past 3 years.7 33.400 103.3 25. and private sector services.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.000 87. 2010 Frequency of Occurrence (% of responses) SomeHardly Always Often Rarely times Ever 85.12cbm 43 Shipping Costs and Competitiveness In Northern Mindanao .3 21.0 25.0 14.

000/cbm 6.000 bulk shipment Rubber Boots 20' Consignee paid Fatty Alcohol. 2010 44 Shipping Costs and Competitiveness In Northern Mindanao . USA USA Japan Japan Japan Europe. Tertiary 36.000 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 32. RG PG (Coco 20' 150.000 20' reefer 350.825 20. Table 3. Davao and Cebu (see Table 3.2 Importers Survey There were 7 respondents from a total of 14 that gave their assessment on charges by port they use.15.000 Consignee paid 10.000 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. Import procedures were evaluated by all the importer respondents and the top most difficult processes identified per implementing agency are given in Table 3.Export Commodity Freight Cost (PhP) 38.000-45.000 22.325 45.000 Amines. USA Japan Worldwide 90.000 120.3.14).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. 2010 3. On the whole.000 not given not given 69.000/cbm 154.000 Industrial) Source: Northern Mindanao Logistics Survey. the ports of MICT and CDO are found to be very expensive as compared to the ports in Baloy (private port).000 16.

Table 3.18.9 64.3 No 50. This is followed by customs duties and informal costs (Table 3. However. the respondents have resorted to the use of some measures listed in the questionnaire.16). The actual logistics costs and charges incurred by the importers are broken down by component as shown in Table 3. which eliminates a number of steps of the importation process (see Table 3.7 92. of Environment and Natural Resources (DENR) Bureau of Internal Revenue (BIR) Dept. 2010 Yes 35. Table 3.17).1 28. The common practice of an early cargo withdrawal from port is done by almost all the firms.0 7. 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.1 Similar to the claim of exporters.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. 45 Shipping Costs and Competitiveness In Northern Mindanao . Freight is shown as the largest cost component together with the customs duties. Moreover.9 42.6 7. importers also ranked freight costs as the highest in their incurred logistics costs. many of the firms encourage formal training for their staff on import procedures.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. 2010 To compensate for difficulties encountered in import procedures. the benefits of using the VASP is not well explored as this is the electronic submission of required import forms.

6 0.1 14. Table 3.000 5.230 2.0 0. MCT:874 1.014 1.000 Packing Type Port Storage Brokerage 2.000 20.300 11.000 3.000 15. VAT Commodity Trucking Arrastre 46 Shipping Costs and Competitiveness In Northern Mindanao .3 Truckers Survey There were eight respondents for the trucker’s survey.0 Source: Northern Mindanao Logistics Survey.000 70.500 8.0 7.610.000 63.545.3 21.Table 3.000 5.000 50.000 3.545.650 3.0 0. MCT:2.. 2010 Table 3.19 lists the road with a ranking of the type of difficulties.915 exempt exempt zero rated Inclusive Inclusive 60.000 11.500 5.200 894 MCT:974 MCT:974 779 CDO:1. the conditions at the ports. MCT:2. the truckers were made to assess the conditions of their operation in terms of the roads they traverse.1 21.610.3.000 5.491 80.000 3.4 100.Asia) Not disclosed Not disclosed DMA/MMA LUNAC 20' 20' 40' 40' 150.300 6.17 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. MCT:873 CDO:1.000 210.797 CDO:1.5009.6004.716 exempt exempt Source: Northern Mindanao Logistics Survey.4 7. Similar to the other surveys.500 Wharfage Freight Not disclosed Not disclosed Coffee 3 in 1 (origin .000 2.000 24.000 23.500 6.18 Actual Logistics Costs Incurred by Importers Import Costs (in PhP) Customs Duties Facilitation/ Informal Cost 14.000 345.013 CDO:1. and the costs of their operations. For the worst roads traversed. 2010 3.000 30.800 773 MCT:520 MCT:520 539 539 550 MCT: 269 MCT: 269 2.000 1.500 5.650 80.

5 12. CDO port and MICT). Source: Northern Mindanao Logistics Survey.e.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.Table 3.5 25. the obvious high cost solutions given are new roads and paving of roads (see Table 3. Source: Northern Mindanao Logistics Survey.5 25.5 12. b) Repair of cemented and asphalted roads. Bukidnon Lanao.0 62. Iligan.0 12.0 25. Table 3.5 12.5 12. and e) Deployment of more traffic enforcers.21 shows that the common problem of both ports is the lack of equipment. 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. 47 Shipping Costs and Competitiveness In Northern Mindanao .5 12. Table 3. 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..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. Likewise. West Misamis Oriental Eastern Misamis Oriental Note: Shown here are ranked 3 (quite problematic) and 4-5 (very problematic) responses only.5 - Worst Roads Bukidnon (via Sayre Highway) Talakag. c) Improve pave roads. 2010 The respondents identified the problems they encounter at the commercial ports of the study area (i.5 12. 2010 The Sayre Highway in Bukidnon is ranked as the worst road due to congestion and accidents.5 25.5 25. b) Set up proper road signs. and c) Build new roads/ highways.20). d) Dissemination and strict implementation of allowable weight of trucks. Low Cost Solutions a) Repaint and improve road signages.0 12.20 Recommended Solutions for Road Improvements Improvements for Recommended Solutions Roads High Cost Solutions a) Pave/cement roads.5 12.

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. However.22 gives the operational expense items of the firms and the corresponding ranking in terms of their share in the overall operational cost.4 Shipping Lines Survey All the shipping lines in the study area responded the survey.24). Fuel has been ranked by almost all firms as the highest cost incurred accounting for 40% to 55% of total expenses.3 to 2% 0. Table 3.5 to 1% 3.7 to 2% 0. shipping lines rated timeliness of cargo delivery by shippers and power outages as serious problems (see Table 3.Table 3. In terms of port and freight conditions. 2010 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.23). not all provide their cargo tariff although the shippers provide information on this (see Table 3.3. 48 Shipping Costs and Competitiveness In Northern Mindanao .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.

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. Europe.Table 3.24 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. However. 5: very serious problem Source: Northern Mindanao Logistics Survey. All ships are charged berthing dues based on their gross registered tonnage (GRT). 4: really a problem. 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. US 2 Hong Kong 3 Singapore 4 China 5 Japan 6 Singapore Table 3. 2010 Table 3. 2010 3500 2200 603 1207 603 1207 Respondent Number 1 Asia. 2: slight problem. 49 Shipping Costs and Competitiveness In Northern Mindanao . 3: manageable problem. which all claim to be appropriate.25 gives the port operation conditions of the shipping lines. 50% of the respondents are open to charges based on actual space occupied.

Does your company deem it necessary to operate your own container yard? Justification. and departs at 6am the ff. If your vessel arrived at 10 p.m. 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. All other charges are basically assessed by the shipping lines as average or low.26 reveals that shipping lines find the port storage charge to be quite high. Your vessels are currently charged berthing dues based on GRT per day.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. do you find the system appropriate? 11.Table 3.25 Shipping Lines’ Port Operation Conditions Questionnaire Item Average Time at Ports (hrs. 3=average. and 4-5=high and very high. This is followed by informal charge. Source: Northern Mindanao Logistics Survey. Would you find it appropriate for the port authority to charge berthing dues based on actual space occupied rather that GRT basis? 12. Table 3. day.) 10. 2010 50 Shipping Costs and Competitiveness In Northern Mindanao . 2010 Table 3. are you charged an equivalent of two days port dues? 13.

4. and (d) Ports and Terminal Handling.233. terminal handling charge (US$45) and port charges (US$274).50 (US$22) NA PhP259. 4. US$335 in China and US$ 382 in Singapore. particularly on Cross-Border Trade where the Philippines was claimed to have the highest cost of exporting compared to other ASEAN countries like Thailand.336.0 percent of the total USUS$1.336 transport cost in the Philippines. 51 Shipping Costs and Competitiveness In Northern Mindanao . (c) Customs Clearance and Technical Control. includes domestic transshipment (US$500).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$1.50) only at exit port. Vietnam and Indonesia. The breakdown of the US$1.8 percent of the USUS$994 Ports & Terminal Handling component-charges.86 (PhP259. which entails the biggest chunk at US$994 of the US$1. ISSUES AND MEASURES 4.1. cargo handling/arrastre (US$175). Combined port-related export costs (wharfage and container handling) represent a measly 2.87) 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$5.336 in the Philippines as compared to US$ 848 in Thailand. Ports and terminal handling rates for export/import cargoes in Northern Mindanao are the lowest in Asia. namely (a) Documentation.70) and USUS$22 (PhP974.70 (US$5.1 Breakdown of Port Related Transport Costs /TEU. The World Bank erred in its 2006 World Bank-IFC “Cost of Doing Business” Report. Table 4.1: Comparative Breakdown of transport costs per TEU Particulars Domestic Transshipment Cargo handling/ Arrastre Terminal Handling Charge Port charges Total Port & Terminal Handling WB-reported Rates (US$) 500 175 45 274 994 Rates at CDO/MCT NA Php974. as cited by the World Bank covers four areas. (b) Inland Transportation.70 (US$27. WB Report Port-related costs are those paid to PPA or PHIVIDEC (wharfage) and those paid to the terminal operator (container handling). Ports and Terminal Handling.336 WB figure or merely 2.86) PhP1.

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. the THC has been successfully reduced while in China. In Indonesia. 15. 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 . 13. 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. 16. 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. The Federation of ASEAN Shippers’ Councils (FASC) and Asian Shippers’ Council (ASC) emphasized that THC is an integral part of the freight.2. The World Bank-IFC included THC in the computation of port related charges in arriving at its conclusions as the term is indeed misleading. Asian shippers have fought for their removal as the THC has become an extra charge over and above the freight rate. 5. 7. 3.4. and/or where responsibility for the goods is transferred. it should be shouldered by the party who secures the shipping service and thus pays the freight. stating that THC is in nature 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. 11. most shipping lines have introduced separate charges for the freight rate and THC. which specifies which party (buyer or seller) pays for which shipment and loading costs. 17. This is consistent with the Incoterms (International Chamber of Shipping) definition. Table 4. 12. For containers shipped on an FOB (Free-On-Board) terms. 8. the Chinese Government has announced the conclusion of its investigation into the THC issue. 14. 4.2 Cargo Handling activity & applicability of THC Activity 1. known as the destination charge. 2. This is defined as the Origin THC. 9. that all costs shall be inclusive in the freight as an “all in” freight rate. Since 1991. 6. Hence. 10.

Overtime 20. Whether the rates/charges per country are justified is another matter. Terminal operators collect terminal services from the shipping line and. Physical & clerical planning of vessel operation +reporting 19. shipping lines are earning more than the cargo handling operator who are actually performing the service.16). The primary issue against THC in the Philippines however. THC in the Philippines is an arbitrary charge and has nothing to do with land-based terminal cost recovery. Hong Kong. thus. 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 . Singapore and China shippers/consignees do not pay the terminal operator handling charges similar to arrastre. 4. India.2 THC Rates Country Currency 20’ In USD Charges Philippines USD 100 100 Hong Kong HKD 1. However. A comparative arrastre rates for selected international ports in the country is shown in Chapter 2 (Table 2.600 206 Japan Yen 25. which does not warrant the USUS$100 charge. THC is a mechanism by which shipping lines recover the expenses of landbased cost. 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.Activity 18. 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. Table 4. In effect.400 37. Through the THC. 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. THC charges by the shipping lines is justified. arrastre rates usually differ from one Philippine port to another making the terminal cost per port of call variable. and a portion of item 1.000 264 Malaysia MYR 300 93 Pakistan USD 90 90 Sri Lanka USD 120 120 Source: Shipping lines THC advisory 2009-2010 40’ 130 2.000 450 110 170 In USD 130 309 391 139 110 170 Shipping lines collect a uniform THC for the entire country irregardless of the port of call.

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

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

Efficient container yard operation is however hampered by the exclusive use of container front end loaders. 4. 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. Though the cargo handler is well equipped based on inventory.000 lower than the usual rates his company is paying. Operationally. The hitch however is that cargo should be shipped from Cebu.In an interview. MCT cannot just rely on its four units of RTGs and one unit reach stacker for its yard operations. This could mean that the container yards were designed exclusively for RTG type of operation and front end loaders (reach stackers. mostly acquired surplus or second hand. MCT will need to improve its yard handling capacity and additional RTGs may be the only option to keep up with higher demand. 56 Shipping Costs and Competitiveness In Northern Mindanao .4.4. he found out that it will cost his company approximately PhP80. Upon checking with local freight rate and charges.1 Mindanao Container Terminal With increasing domestic and foreign traffic. wide storage areas and covered transit sheds. stripping and warehouse receiving crew or pay overnight charges to truckers. Pavement block construction on the yards has also limited the use of MCTs container reach stacker. an exporter of marine products from Northern Mindanao was offered freight rate that is USUS$1. handling and associated costs to bring his company’s 40footer refrigerated container to Cebu. Shippers will also need to pay overtime to employees. Port Operational Issues 4.4. 4.2 Cagayan de Oro Port CDO port has the advantage of having long berths. with domestic containers enjoying only two days of free storage privilege. equipment reliability becomes a major issue for the CDO port.000 (USUS$1. However. Demand versus capacity projection will guide PHIVIDEC and MCT in deciding when port expansion should commence. prioritizing vessel over yard (withdrawal) operations is strategically appropriate. As traffic volume increases. this becomes a problem and complaints of delayed withdrawal will abound.770) in freight. 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. forklifts) were not considered in the ports design criteria.

which originally embodied the berthing fees. etc. CDO cargo handling tariff is thirty percent lower than that of the ports of Davao and General Santos. utilization of the CDO port quay crane has not been made compulsory. 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 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. c. 57 Shipping Costs and Competitiveness In Northern Mindanao . Unlike MCT.1: PPA reported that CDO Port's Annual Berth reliability. There were some problems when to reckon a vessel as having arrived and when to reckon it as having departed. However. in the course of restructuring the port tariff in the early 80’s and in order not to deal with the nitty-gritty and assessment conflicts with the shipping lines. CDO port does not have an Electronic Data Interchange (EDI) system and due to apprehensions by domestic shipping lines of higher handling costs. did specify that the berthing charges shall be assessed based on the GRT of the vessel for the first 24 hours or fraction thereof. With the approval in 2009 of its tariff leveling petition. 4. the PPA decided to change the charge base to GRT per Calendar Day due to the following reasons: a. it should be in a position to replace ageing front end loaders and improve equipment Figure 4. etc.Until 2009.3 Vessel Dues PPA currently charge berthing fees on a GRT-day basis. This is most prevalent among tramping vessels. The cargo handling operator’s ability to acquire modern cargo handling equipment may have been curtailed by issues of affordability. 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. delay in the arrival of quarantine launch. b.4. 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. The Tariff and Customs Code.

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

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

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

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.chassis mounted containers stowed on its cargo decks. the ship’s gear (ships crane) is operated by the personnel of the cargo handling operator. 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. 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. 61 Shipping Costs and Competitiveness In Northern Mindanao . The difference in handling rates is a substantial saving for RORO operators especially when RORO vessels were exempted from paying stevedoring charges starting in 1997. This despite their continued reliance on cargo handlers to provide stevedores for work on board vessels for trailer landing leg deployment/redeployment. etc. chuck positioning. should provide the services to the shipping lines. The cargo handling operators in return argued that in conventional container carriers. 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. lashing/unlashing. The shipping lines in return argued that the RORO tractors and trailers should be treated as ship’s gear. Figure 4.

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

Its argument is centered on the limited interplay model. a brand new reach stacker cost Euro430. 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. Sasa port in Davao deployed seven brand new and one second hand unit of container reach stackers.6: Trailer Horse 4. the cargo handling operators at these ports were able to afford the equipments from foreign stevedoring generated revenue (see table 2.Due to higher foreign container volume. Had their proposal saw fruition. 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. the port of Cebu have ten units of old second hand rubber-tired gantry for its yards operation. Trailer Horse and RORO/Pax Safety The trailer horse is a device which provides added support for loaded chassis lashed on vessel decks. In the Philippines.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. it would have been the demise of domestic port modernization dreams of the PPA and further stunt the growth of the cargo handling industry.17). Similarly. Presently. However. 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. Roro carriers do not employ this device which would assure that chassis and containers would not topple down in rough seas.5. which is more than what is needed to handle its container traffic had the units been new. Chassis landing leg failures are common occurrence even on land. Figure 4.2 Freight Quotations and Freight Rates 63 Shipping Costs and Competitiveness In Northern Mindanao .16 and 2.

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

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

Such vehicles are not road worthy much less appropriate for highway use. 4. alternators. 4.1 DPWH-PPA Cargo Weight Policies DPWH mandates that vehicles shall have load limits of 13. Agusan and Bugo sections of the highway to the consternation of truck drivers and other legitimate motorists.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. Shippers also encountered similar problems as they have no idea of the exact weight of their cargoes and will rely on commercial weigh bridges located near or at the port. Cagayan de Oro port and MCT imposes compulsory weighing of outbound cargoes. 66 Shipping Costs and Competitiveness In Northern Mindanao . 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.Ironically.7: Motorcab Similar to trisikads. Trucks are weighed before entering the city. chassis numbers etc. They are given authority by the barangay captains and enjoy political protection. They also slow down traffic flow along the Puerto.7 Harmony of Policies and Programs 4. These vehicles however poses traffic hazards and danger to the riding and commuting public. Inbound cargoes are presumed to be weighed at the port of origin. Trucks from Cagayan de Oro going outwards are not weighed. 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.5 tons per axle. This policy has been a bane to truckers who have no idea what their axial loads are once loaded with containerized cargoes.) 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. lights. Figure 5.6.7. Tablon.

5 tons per axle. c. Development Strategies To fast tract the development of the land transportation industry in Northern Mindanao. DILG. Encourage the participation of the private sector in road infrastructure development. 67 Shipping Costs and Competitiveness In Northern Mindanao . deduct truck tare weights to determine container gross weight. 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. the following recommendations are given: a. Institute public information and dissemination mechanisms on the procedures. Organize truck operators/owners into a vigilant and unified association. Pursue consolidated efforts on the part of the DENR. d. DPWH and DOTC to review existing laws/regulations dealing with legitimate transport permits and corresponding fees. Introduce immediate development on difficult and dangerous and high traffic density road sections. PPA weighs the whole truck. DPWH and PPA should harmonize their load limit policies. c. b. A reduction in transactions costs in land transportation can be done through the following: a. d. e. Increase the region’s share of the total national road budget. Information on the Figure 4.9: MCT Weighbridges weight of containers is critical for proper stowage planning by carriers. Consult transport service providers and players in identifying priority road and bridges for development. Pursue an education campaign among members of truckers’ associations on awareness and compliance of required transportation permits.Inconsistencies PPA on the other hand is observing ISO 1995 and allows 20 foot containers up to a maximum gross weight of 24 tons. charges and clearances required by implementing agencies. Minimize the collection of illicit fees by using the media to expose cases of erring/corrupt government personnel. b.

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

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

BOC uses ASYCUDA ++ and provides for automatic payment and on-line release of goods to speed up cargo clearance. This will ensure that the brakes will hold once applied. For most cargoes. the MCT Terminal Building where most of the shipping lines. In traversing steep inclines.1. the realities are not as what is intended. EDI services are provided through a proprietary Value-added Network.3.1 VASP (Value Added Service Provider) The Customs Modernization Act allows for electronic filing of customs documents. At present. Direct Trade input through privately-operated network stations and a privately operated port based entry and encoding system. and the One Stop Export Documentation Center located at the DTI Regional office operated by PhilExport-10A. The introduction of ASYCUDA World will allow greater use of the Internet for submission of BOC documents. 70 Shipping Costs and Competitiveness In Northern Mindanao .3 Customs Clearing 5.1 One Stop Processing Centers Although the concept of the “one stop” is literally a single venue with collective agencies to process documents. the terminal operator and PHIVIDEC Industrial Authority are housed. 5. truck drivers will engage the water brakes and spray water on the brake drums to reduce frictional heat and keep the brakes from overheating.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. 5.2. The system of regulation for commodity clearances are yet to be institutionalized (i. There is no discrimination of cargoes and truckers are willing to provide 24 hour trucking service with no additional overtime charges.1 Water Brakes Northern Mindanao Truckers practically invented the “Water Brakes” for added operational safety. 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. 5.e. The purpose is to facilitate export processing for the convenience of shippers. the time for cargo clearance will be reduced to only a few hours.5.1 Exports and Exporters 5. the various one stop centers has alleviated some of the problems of shippers and has effectively shorten document processing time. 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.2. regional heads of regulatory agencies delegating approving authorities posted at the venue).2 Trucking Industry 5. Though far from the ideal set-up.

5.Additional improvements should be realized as BOC develops its enforcement database and improves its risk management techniques.no inspection of cargo is done other than random sampling Yellow lane . 5. PPA requires cargo handling operators to respect employees’ rights to self organization and mandates it to recognize employees union for collective bargaining.4 Port Management 5. Unlike in other areas where inspection sites are located outside of port zones. 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. At present the BOC applies selective enforcement through three physical inspection procedures: Green lane .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.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. 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.4.inspection of documents only Red section . 5.3. grievance handling and Labor-Management Councils (LMCs). Committed productivity rates shall not be lower than PPA contracted productivity standards. 5.4.2 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. 5. PPA and OROPORT security personnel also attended trainings and technical sessions on the ISPS Code security procedures and certification.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.3 Labor Unions As part of its commitments.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 .4.4.

4.1 Institutional Coordination 72 Shipping Costs and Competitiveness In Northern Mindanao . The members meet periodically in order to advise PPA on prevailing port issues affecting the port’s various stakeholders. As of February 2010. 6. 5. It effectively directs vessel traffic and minimize smuggling and enhance safety at the Macajalar Bay.lack of budget to operate the system. Quay Cranes and various cargo handling equipment were procured by the cargo handler as part its modernization commitments to PPA as required. WAY FORWARD 6. major infrastructure projects implemented at the port are funded by PPA funds.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. the VTS is fully operational and manned by qualified PCG personnel. After the completion of the Cagayan de Oro Port expansion project phase-2 funded by the International Bank for Reconstruction and Development (IBRD). 5. are plowed back to fund port infrastructure projects in the Cagayan de Oro Port. 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.6 The Port Management Advisory Council (PMAC) This is a multi-sectoral organization solely for the purpose of addressing port issues.4.

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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Shipping Costs and Competitiveness In Northern Mindanao

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.

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that will give an opportunistic official the opening he needs to hold up the clearance. 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. This approach also makes business sense. 76 Shipping Costs and Competitiveness In Northern Mindanao . Implement controls on the outbound end of shipments. and corruption in the clearance process.A cardinal rule for many exporter/importer working in difficult customs environments. or in the shipping containers themselves. as it reduces the likelihood of delay. additional costs. 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. to make sure nothing appears in (or is missing from) the required paperwork.

ANNEXES 77 Shipping Costs and Competitiveness In Northern Mindanao .

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

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

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

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

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 .

Evaluate the quality of infrastructure in use for your logistics operations (pls.1 SHIPPER’S SURVEY QUESTIONNAIRE 1. Do you use only one trucking company? Yes___ No___ 11. 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. Do you regularly canvass for the cheapest trucking rates? Yes___ No___ 12.50% 51% . Business Size (total assets less land) Micro (up to Small (Php3MPhp3M) 15M) Med. Industry Sector Agri/Aquaculture Processed Food Wood/Furniture Industrial Other. logistics costs are (please indicate per product. Please provide your recent year’s (2009) transportation logistics costs incurred. Do you outsource any of your company's trucking logistics functions? Yes ___ No ___ 10. (Php15M100M) Large (Php100M up) 5.25% 26% .75% 10% . include additional sheet if necessary): Cost Item (Pls. Average pre Month Php ____________ Total for 2009 Php_______________ 7.25% More than 75% 26% . Overall. pls. Company Address _____________________________________________________ 2. Approximately what percentage of your company's outbound transportation logistics costs is associated with Sea Freight logistics? Less than 10% 10% .ANNEX 3. Type of Business Production Trading Manufacturing/Processing Services Other (pls.75% More than 75% 9. specify: ______________________________________________________ 3. 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 . Approximately what percentage of your company's outbound transportation logistics costs is associated with trucking logistics? Less than 10% 51% .50% 8. Your Position in the company: ___________________________________________ 6. specify): ____________________________________________________ 4.

2: Low. please specify * 1: Very Low. Evaluate the evolution of the following factors in your country of work. 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.g.Rarely time s Hardly Ev er 17.Cost Item (Pls. 3: Average. 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 . 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. stolen cargo) Solicitation of informal payments Alway s Often Some. 5: Very High (Destination) 15. 4: High. 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.

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

Others (specify) 39. please specify packing type & cost_____________________________ 34.Php____________ 40 footer reefer . How are your export goods transported? FOB___ 3.Php__________ Others. Manila)? (Pls.Php___________ 20 footer dry .1. Nationally 4.Php___________ 20 footer dry . where are the majority of your customers located? (encircle one. 2: Operations.Php____________ 40 footer reefer .) 1. Geographically. What made it decide to employ more women? _________________________________________________________________________ Tasks assigned in this level? 1: Supervision. IF NO: When did the company or business begin hiring more women? (Year)_________ 39. Locally (< 200 kilometers) 2.Php_________ 20 footer reefer . How much is your current freight cost for your domestic cargoes (e.40 footer dry .g.3. 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. 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 . please specify packing type & cost_____________________________ 33.Php__________ Others. Regionally (< 750 kilometers) 37.2. indicate commodity __________________) 40 footer dry . Globally CIF___ Others (specify) ___________________________________________________________________ 38. would that help your business be competitive? Why?______________________________________________________________________ ___________________________________________________________________________ 36. How does the Value Added Tax (VAT) on freight affect your business? ___________________________________________________________________________ ___________________________________________________________________________ 35. Has the ratio of women to men workers always been the same? Yes___ No___ 39.

1 2 3 4 Arrastre Service 1. pls. 1 2 3 4 1. 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 . specify: ______________________________________________________ 3. 1 2 3 4 1. Company Address: ______________________________________________________________ 2. 1 2 3 4 Provider 2. Industry Sector Agri/Aquaculture Processed Food Wood/Furniture Industrial Other. 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. Business importing goods from outside the country for processing Phil. 1 2 3 4 1. 1 2 3 4 Bureau of Plant 1.2 IMPORTER’S & FORWARDER’S SURVEY QUESTIONNAIRE 1. What are the problems encountered with drawback procedures? Please enumerate if any. 1 2 3 4 1. specify) 1. 1 2 3 4 BIR 2. 1 2 3 4 2. Type of Business Production Trading Manufacturing/Processing Services Other (pls. 1 2 3 4 Bureau of Quarantine 2. do you claim duties drawback? Yes ___ No ___ 7. Does your company use your imported commodities as materials for export? Yes __ No __ If so. 1 2 3 4 Industry 2.ANNEX 3. ___________________________________________________________________________ ___________________________________________________________________________ 8. Please tick one Phil. 1 2 3 4 DENR 2. specify): ____________________________________________________ 4. 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 2. 1 2 3 4 1. Business Size (total assets less land) Micro (up to Small (Php3MPhp3M) 15M) Med. 1 2 3 4 Others (pls. 1 2 3 4 Bureau of Customs 2. (Php15M100M) Large (Php100M up) 5. 1 2 3 4 Port Authority 2.

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

Is there any other information relating to trade procedures that have effected your inward supply chain operations. Employment Profile of the Company/Business Level/Division/ Present number How many are Function of workers women workers? Management Operations Marketing Finance/Admin.19. IF NO: When did the company or business begin hiring more women? (Year)_________ 21.1. Your Position in the company: _____________________________________________________ 21. Has the ratio of women to men workers always been the same? Yes___ No___ 21. 2: Operations. 3:Clerical Men Women 1 2 3 1 2 3 96 Shipping Costs and Competitiveness In Northern Mindanao . What made your company decide to employ more women? _____________________________ Tasks assigned in this level? 1: Supervision.2. which you would like to share? Please outline: ______________________________________________________________________ ______________________________________________________________________ 20.3. Others (specify) 21.

What’s the percentage increase of your trucking rate for the last 5 years? _________________________ 12.ANNEX 3. what is the common practice? Van Out ____________ Stuffing @ Shipping Co. Repairs and Maintenance j. specify) ___________________________________________________ 6. For containerized hauling. Business Size (total assets less land) Micro (up to Php3M) Small (Php3M-15M) Med. What is the percentage of your backload? ______% 10. What is your average waiting time for unloading? ______________________________________ 16. Garage g. TRUCKER’S SURVEY QUESTIONNAIRE 1. Are your trucks? Brand New Surplus YES NO 7. How far is the average distance do you provide trucking service? ____________________ 8. Items Rank Percent to Operations a. Cargo/Break-bulk Containerized Php ____________ Php ____________ 11. Weigh bridge Informal costs l. Company Address: ______________________________________________________________ 2. CY/Port CY___ 17.3. please explain why:_______________________________________________________ 19. Fuel f. 1 being the highest. Are you paid for empty van positioning/repositioning? 18. (Php15M-100M) Large (Php100M up) 3. Do you have any fuel efficiency programs? 13. Will it be beneficial if shipping lines establish an Inland Container Yard in Valencia. Are you paid in cash for your trucking services? 20. Your trucking operation’s major costs. Do you give discounts for cash transaction? 97 Shipping Costs and Competitiveness In Northern Mindanao . No. Any backloads? 9. What exactly is hauled? For Hire Nor for Hire Mixed Containerized General Cargo/Break-bulk Commodities: _____________________________________________________________________ 5. Financing cost d. Road Bribe m. What is your average waiting time for loading? ________________________________________ 15. Business permits & Vehicle registration b. Tires k. Your prevailing trucking rate per kilometer? Gen. Please rank according to cost contribution. Franchise fee and regulatory permits e. Bukidnon? If yes. Oil and lubricants i. indicate number of units) Prime Mover ______ 10-Wheeler _____ Wing Van ______ 6-Wheeler________ Other (Pls. Port Bribe Yes No 14. What kind of trucks do you use? (pls. Driver and helper’s Salary c. Insurance and inland marine h. Type of Registration 4.

Low cost solution:_________________________________________________ 31. Are you paid demurrage? If yes. 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. For regular clients. Your top 5 road sections most difficult to traverse: Road Section a. d. e.Expensive solution:________________________________________________ .Low cost solution:_________________________________________________ 29. What are your recommended solutions to improve road conditions in these areas? . 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. ________________________________________________________________________ b. Your top 5 most accident prone areas. Iligan. What are your recommended solutions to improve road conditions in these areas? . ________________________________________________________________________ c. Why difficult? 28. how much _________ % of trucking rate per day? 23. b. ________________________________________________________________________ 30. ________________________________________________________________________ e. 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. ________________________________________________________________________ d.Expensive solution:________________________________________________ . Bukidnon Lanao. how much?______%? 21. do you allow credit? 22.If yes. How would you consider prevailing trucking rates? Expensive____ Fair____ Cheap____ Why? Please explain ____________________________________________________________ 25. c. Do you assign dedicated trucks to regular customers? 26. a. Are you paid for empty container returns? 24. West Misamis Oriental Eastern Misamis Oriental Heavy Traffic 98 Shipping Costs and Competitiveness In Northern Mindanao .

Puntod Bridge* Julio Pacana (Licoan) Gaabucayan Road *: on the assumption that the CDO 3rd Bridge (Kauswagan-Puntod) is operational 35. public markets. Iligan. Bukidnon 1 2 3 4 5 Lanao. 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. Iligan. 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. 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. commercial centers Bukidnon (via Sayre Highway) 1 2 3 4 5 Talakag. Bukidnon 1 2 3 4 5 Lanao.33. Bukidnon 1 2 3 4 5 Lanao. Road Rank Road Rank Agora Road (Valenzuela Street) Corrales Extension Sergio Osmeña Extension Kauswagan . number 1 being the highest. Iligan. West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Poor reliability due to weather conditions 1 2 3 4 5 Poor Signage(s) 1 2 3 4 5 Other (specify) 1 2 3 4 5 1 2 3 4 5 99 Shipping Costs and Competitiveness In Northern Mindanao . 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. Iligan. Bukidnon 1 2 3 4 5 Lanao. West Misamis Oriental 1 2 3 4 5 Eastern Misamis Oriental 1 2 3 4 5 Highway interferences w/ school crossings. 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. 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. If traffic and road conditions are improved.

2: Operations. 44. 3:Clerical Men Women 1 2 3 1 2 3 100 Shipping Costs and Competitiveness In Northern Mindanao . How long (in months) have you been in this position? _________________________________ 38. a. c. Employment Profile of the Company/Business Level/Division/ Present number How many are Function of workers women workers? Management Operations Marketing Finance/Admin.2. c. Do you operate your own garage? Yes No 41. IF NO: When did the company or business begin hiring more women? (Year)_________ 47. In the next 3 years. Geographically. Others (specify) 47.1. What current government policies and regulations (if any) adversely affect your operations? a. d. What made your company decide to employ more women? _____________________________ Tasks assigned in this level? 1: Supervision. Less More profitable No change in business will be: profitable profitability 43. d. ________________________________________________________________________ 46. b. Are illegal road/highways bribe (kotong) a major problem for our trucking operations?______ 45. ________________________________________________________________________ b. e. where are the majority of your customers located? (please check) CDO Bukidnon Iligan MisOr Mla/Ceb 39.36. Do you own all your trailers? If no.3. Your Position in the company: _____________________________________________________ 47. Has the ratio of women to men workers always been the same? Yes___ No___ 47. e. What is your title at your company? _______________________________________________ 37. b. how may are rented? ________ Yes No 40. Your top 5 current problems in the port you encountered lately: CDO Port Mindanao Container Terminal a. Plans of expanding you’re trucking operations? Yes No 42. ________________________________________________________________________ c.

Load Factor (%) 5. 4: Bulker. 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. 2: slight problem. check ): ( ) Domestic Liner 3. Service (pls. 3: Conventional. Vessel Capacity Vessel 1 2 3 4 5 TEU Reefer Plugs Ship Gear Type No. 3: manageable problem.ANNEX 3. Company Address ( in CDO): ________________________________________ 2. 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 . 2: RORO. How many ships do you have calling at: 4. 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). 5: Others Ave. 20 footer (FCL Dry). 40 footer (Reefer) 7. Vessel Information: 1 ( ) Foreign Liner MCT ___ CDO Port ___ Vessel Type Route Origin-Destination (via) Call Frequency Weekly Monthly Ave. Please Provide the Cargo Tariff/Lease Rates. 4: really a problem. 20 footer (Reefer). of Units 6. 40 footer (FCL Dry).4 SHIPPING LINE’S SURVEY QUESTIONNAIRE 1.

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

What made it decide to employ more women? ____________________________________________________________________________ 103 Shipping Costs and Competitiveness In Northern Mindanao . Has the ratio of women to men workers always been the same? Yes___ No___ 17. Others (specify) 16.15. 2: Operations. 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. 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.

1 MAERSK LINES THC TABLE 104 Shipping Costs and Competitiveness In Northern Mindanao .ANNEX 4.

.00 Driving with suspended or revoked or improper license 1.if committed by the driver without the knowledge and 2. the MV shall not be allowed to operate by the confiscation of its plates. 3. 000.000.in addition to the original suspension the said MV and plates shall further be suspended for two (2) years. Allowing an unlicensed/improperly licensed person to drive motor vehicle.000.00 500.00 .000.the subject MV shall be impounded until such parts are properly registered 15. tags or stickers except security plates on authorized Motor Vehicle . 10. Conviction of the driver of a crime using a motor vehicle 3. Operating /allowing the operation of MV with a suspended / 1. 6. 14.00 Driving without delinquent of expired license 400.00 Motor Vehicle beyond the 90 day period of his sojourn in the country.000.000. in addition.00 Consent of the owner/operator 4. 5.00 16. Tourist operating or allowing the use of non Philippine registered 5. Illegal transfer or use of MV regularly issued MV plates.if the driver has not been issued an authentic license. Operating a motor vehicle with unregistered substitute or 5.if the drivers has been issued an authentic license.00 11. Failure to carry certificate of registration or official receipt of registration 150. 4. Driving under the influence of drugs 10.00 . Obscure plates 20.000. he shall be disqualified. 1.000. Violations in Connection with Number of Plates 18.00 and six months suspension of driver’s license.for the 2nd offense and three (3) months suspension 6. Possession and use of fake/spurious Driver’s License 2.000. Unlicensed conductor of a motor vehicle for hire 500.000. after 3rd offense automatic revocation of driver’s license 7.00 .and two (2) months suspension of driver’s license 5. Operating/driving a motor vehicle which is unregistered/ improperly Registered .00 2.000. OR & CR until properly registered. if the driver is a holder of local driver’s license.2 LTO FINES AND PENALTIES FINES/PENALTIES FOR TRAFFIC AND ADMINISTRATIVE VIOLATIONS: APPROVED RATES Violations In Connection With Licenses 1.00 revoked Certificate/Official Receipt of registration. registrations and Driver’s License for 2 months 9.00 13. Driving without License 1.000.if the driver is also the processor of the subject motor vehicle .00 . 17.500.00 105 Shipping Costs and Competitiveness In Northern Mindanao .ANNEX 4.Owners/Operators are conclusively presumed to have 200. it shall be suspended for 1 year in addition to the fine .00 10. 5.00 200. Display/Use of an expired commemorative plates or stickers 23. 2.000.000.000.00 . Student driver operating a MV without being accompanied by a Licensed driver 500.000. to secure a Driver’s License for a period of two (2) years.00 500. the same shall be suspended for one (1) month.00 replacement engine. Improper display of a motor vehicle permanent plate 22.00 8.suspension of plates. tampered/ marked plates or stickers 2.00 of driver’s license .00 Driving under the influence of liquor.the subject MV shall be impounded and its plate held during the suspension . Motor Vehicle number plates not firmly attached 19.00 12. engine block or chassis . License plates different from body number on Public Utility MV 21.00 Failure to sign Driver’s License 200.for subsequent violations after the 2nd offense 7.000.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 24.00 Failure to carry Driver’s License 200.

00 33. Use or installation of unnecessary lights in front and rear of a Motor Vehicle 29. Taxis and similar for For Hire Motor Vehicles operating with fixed routes.to hold plates pending correction of defect 41.000. Improper/Defective Horn or signaling device 300. .to hold plates pending correction of defect 40. Without rear view mirror .to hold Plate or OR/CR until defect is corrected 43.Committed the illegal transfer. plate and/or brake lights 300.00 31. Shuttle Services. Dilapidated or defective MV 1. Trucks For Hire. Unauthorized use of bell.if the MV with illegal transferred plates or stickers in used In the commissions of a crime.00 500.00 200. Without red flag or red lights on projecting end of load extending more than a meter beyond the bed or body. Operating MV with metallic tires in any public high ways 5.00 200.to hold plates until defect is corrected 36. Operating motor vehicle without head.00 15.000. Non painting of business or trade name . Failure to paint or improper painting of authorize route or PUJ Filcabs.00 300.to hold plates pending correction of defect 38.00 200. Defective Brake 500.00 fine and suspension of plates and registration certificate and Official Receipt for two (2) years Violations Relative to Equipments. Without functional spare tire 45. Without muffler (should insert windshield) 150. and in the evening red lights visible at least 50 meters away. Failure to paint plate number on a motor vehicle for hire .00 500. Failure to install EWD 4 meters from the front rear and of the stalled motor vehicle .00 500. Without Capacity marking .to be imposed upon the owner/driver 49. Without or defective windshield wiper . Without or defective hand brakes . siren or exhaust whistle .00 30.00 200. tail. Dirty or unsightly or unsanitary MV 300. . Without interior light .00 32.000.to hold plates pending correction of defect 42.to hold plates until defect is corrected 35.forefieture of the said gadgets in favor of the government 44.to hold plates pending correction of defect 39. its owner shall suffer the penalty of 12. Failure to carry Early Warning Device (EWD) 48.to be imposed upon the owner/driver 500.00 500.00 27. Use of unauthorized improvised plates 37. Devices and Markings of Motor Vehicle 25.000.00 300.00 28.00 375.to be imposed upon the owner/driver 47.Drivers of MV involved in illegal transfer of plates. Without wiper 150. Without or defective speedometer .00 150. Accessories. 46.00 26.to hold release of plates until defect is correct 34.00 . sticker shall suffer the suspension of their Driver’s License for three (3) months .00 300. Without name or business name and address of operator inscribe .00 106 Shipping Costs and Competitiveness In Northern Mindanao . Parts.00 500.00 200.

00 6. Load extending beyond the projected width without permit . painted windshield or colored windshield.00 107 Shipping Costs and Competitiveness In Northern Mindanao . 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.to be imposed upon the owner Weights and Load Limits 55.00 per day reckoned from the day of apprehension until the case was settled and suspension of registration and/or impoundment of MV for six (6) monts 3rd Offense & addt’l P2.500) kgs. The penalty shall be waived for loads exceeding the registered GVW by a tolerance of less than 5%. No motor vehicle shall exceed thirteen thousand five hundred (13. 500.00 600.00 300.to be imposed upon the owner/driver of the motor vehicles 52.to be imposed upon the owner/driver 51. Installation of dim/colored lights.to be imposed upon either the driver/operator or conductor 58.000.00 500.00 600. 000. Unauthorized installation of jalosies. Baggage or freight carried on top of truck exceeds 20 kgs. Without permanent tail gate with inscription “Not for Hire” sign in a private jeepney/jitney . . 57.00 per day reckoned from the day of apprehension until the case was settled. dancing lights or similar lights .00 500. Out of line For Operators/Owners: 1st Offense & addt’l P1. Or the vehicle load exceeds 150% of the maximum allowable gross weight.50. Allowing more passengers and/or freight or cargo in excess of carrying capacity of MV 59. Per sq. Operating a passenger truck (bus) with cargo exceeding 160 kgs. Use or installation of heavily tinted colored/painted windshield or or window glass .00 500. 500.00 per day reckoned from the day of apprehension until the case was settled and suspension of registration and/or impoundment of MV for three (3) months 2nd Offense & addt’l P2. .00 300.to be imposed upon the driver 56. strobe lights.00 300. vehicle weight. 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. revocation of registration and forever banned from applying for a franchise and/or revocation of franchise if franchise holder 600.to be imposed upon the owner/driver sunvizor or light tinted are allowed 53.to be imposed upon the owner 54. Use/installation of a glaring/stainless object upon at the front and/or rear of a motor vehicle .

00 6.000.00 1.00 per day reckoned from The day of apprehension until the case was Settled.00 750. Operating or using a For Hire Motor Vehicle different from its types of services mentioned in the CPC for driver 1.000. 2nd offense and suspension plates.00 4. CR for six (6) months for driver for operator 3. 500.000.00 108 Shipping Costs and Competitiveness In Northern Mindanao .00 250.00 750.000.000.00 500. OR/CR of the subject MV shall be suspended For six months from the date of apprehension to the fines 63. Colorum operation For Operators/Owner: 1st Offense & addt’l P1.00 500.00 6.000.00 500.the plate. OR.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 P2.00 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 for operator . 000. 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. 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 6.00 250.000.00 2. 500.For Hire Motor Vehicles used by the members of the family of the operator. during emergency cases is allowed.000.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.

Undue preference or unjust/unreasonable discrimination against the passenger . Breach of Condition in the CPC except when already penalized under any provisions of this circular.for the driver or the conductor as the case maybe and suspension of conductors license for two (2) months . OR & CR shall likewise be suspended for two (2) months. Parking a. 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. Frauds and Falsities 72. 4 meter from the driveway entrance d.00 400. the place.00 1. Misrepresenting a copy of a document pertinent to a motor vehicle Before the Traffic Adjudication Service. in front of a private driveway f. Employing insolent.00 1. on the roadway side of any unmoving or parked MV at the curved way of the highway 200.500.for subsequent offenses and suspension of DL.00 to 4.000.000.00 375.00 600.the operator shall also be liable for equal fine if found to have Participated thereto and the plate. Use of fake plates/stickers/pursuant documents .to be imposed against the operator 69.000. . . 73.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. Overcharging/Undercharging of fare .to be imposed against the driver aside from the penalty. OR/CR for one (1) year for driver for operator 3. If the operator has knowledge or consent to the infraction committed.00 500.00 5. within an intersection b. Non – issuance of fare ticket for operator . OR/CR of the subject MV shall be suspended for three (3) months.to be imposed against the operator and the conductor for conductor 68. 500. 67.to be imposed upon the driver or owner Traffic Violations 74.to be imposed upon the owner and/or driver of the subject MV.00 109 Shipping Costs and Competitiveness In Northern Mindanao .000.00 500.00 Breach of Condition of Franchise and Related Violations 64. Unauthorized use of commercial or trade name .00 750.00 2. 70. within 5 meters of the intersection c.00 500.00 1. 71. OR/CR for the same period Stated above. Unreasonable refusal to convey passengers . within 4 meters from afire hydrant e. plate.for each subsequent violation the license of the driver or conductor and/or the plate.000.to be imposed against the owner/operator/possessor of MV 65. discourteous drivers and conductors . The license of the driver shall be suspended for two (2) months.

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

000.00 200. a.g.after third violation Dl will be revoked and franchise 1. Illegal turn – failure of the driver of a vehicle intending to turn to the left. a.000.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.h.b. 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.e. to keep as close as possible to the right hand curve or edge of the highway. the operator of the subject MV shall be summoned. Failure to yield the right of way to ambulance. Tampered. Tampered. Defective or non operational. Tampered. 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 suspension of DL for three (3) months 1st Offense . a. Obstruction – obstructing the free passage of other vehicles on the highway while discharging or taking passengers or loading and unloading freight.and suspension of DL for four (4) months 2nd Offense . and turning . .f. y. to pass to the left of the center of the intersection except upon highway laned for traffic and upon one-way highway. a.and suspension of DL for six (6) months. fake or altered meter seal. reconnected. 3rd Offense DL will be revoked and franchise will be recommended for cancellation 3. Fast. 78.00 4.00 For the said infraction. a. 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. 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 stop before traversing a “through highway” or railroad crossing – failure of the driver of a vehicle upon a highway to bring to full stop such vehicle before traversing any “through highway” or railroad crossing. a. Failure to give proper signal – Failure to give the appropriate signal before starting. broken. joint.00 111 Shipping Costs and Competitiveness In Northern Mindanao . police or fire department vehicles – failure of a driver upon a highway to yield the right of way to police or fire department vehicles and ambulances when such vehicles are operated on official business and the drivers thereof sound audible signal of their approach. a.a. z. 500. 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. broken. stopping or turning into a direct line.d. fake or altered sealing wire .00 6. 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.to be imposed upon the driver or owner whoever maybe responsible. Unsafe towing 76. The License of the driver or the plate.c. Upon determination That he is also liable for the said infraction.000. 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”. In turning. Two (2) months for the 2nd offense and three (3) months for the 3rd offense . the plates. OR/CR of the MV shall be suspended for one month for the 1st offense. 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.

The License of the driver shall be suspended For forty five (45) days 82.to be impose upon the owner 80.00 1. Display of sign board (PUB & PUJ ONLY) without front panel route 750. Failure to print owner/operator’s name. Operating aircon MV with defective aircon 92. adaptation of MV color or design without authority .00 500.00 1. Unauthorized installation of aircon on buses 90. Failure to provide top light indicating availability . 000. 79.00 500.to b impose upon the driver and/or owner 88. Smoke Belching define under RA 8479 .to be impose upon the and/or driver 81. No Identification Card 86. Old meter seal/or loose triplex seal .00 250.Will be recommended for cancellation. 000. Allowing child six years old and below on passenger seat 97.to be impose against the driver. 000 .to be imposed upon the owner/operator or driver Other Non – Traffic Violations 89.00 2.for 3rd and subsequent offenses and to pass the smoke Emission test and to suspend of plates. Violation of color scheme.000.for the 1st offense and to pass the smoke emission test . Failure to Install Seatbelt as defined under RA 8750 95.to be impose against the operator/owner and driver 85. Operating a right hand drive motor vehicles 94. Failure to paint the word “Aircon” .00 250.00 1. 400.00 200. 200.00 500.00 750.to be impose against the operator / Owner only. No taxi Meter .to be imposed against the driver & the total amount of . 84. Unauthorized installation of Aircon .00 500.00 1. 200.00 150.00 3.00 750. address and/or Capacity markings. Non painting of the word aircon for buses 91.00 750. Failure to wear/unbuckled seatbelt 96.00 Copyright © 2009 Land Transportation Office LTO Website Comments: 112 Shipping Costs and Competitiveness In Northern Mindanao . No Taximeter light 87. 000.00 50.to be imposed against the operator The total amount of 83. CR/OR/ Registration of MV for one (1) year 93.00 750.00 500. type of service on taxi units .00 5.for the 2nd offense and to pass the smoke emission test .00 200. Flagged up meter and/or operating on contractual basis .

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

germination.Is merchandise/commodities/freight carried by means of transportation.A phrase referring to the side of a ship.The acronym meaning "cash against documents. 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 a receipt of cargo for shipment by a consolidator (used in ocean freight). nor against war.Bureau of Plant industry Berth . it serves as a document of title.Break-Bulk Cargo BFAR – Bureau of Fisheries and Aquatic Resources of the Department of Agriculture Berth Liner Service .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 ." 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. Advising Bank A bank that receives a letter of credit from an issuing bank.Is a clause included in marine insurance policies to cover loss and damage from external causes. strikes. B/B . BPI . improper packing/ loading or loss of market. BIR . port side Authority (formerly the Bureau of Coast and Geodetic Survey) Authority to Load . Cargo Receipt . and a receipt for goods.Bureau of Customs Bonded Warehouse .A warehouse storage area or manufacturing facility in which imported goods may be stored or processed without payment of customs duties.Is the place beside a pier. Usually prepared by the shipper on forms issued by the carrier.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. Alongside . such as decay. Bill of Lading .GLOSSARY OF TERMS AND ABBREVIATIONS 3PL – Third Party Logistics Advance Against Documents Load made on the security of the documents covering the shipment.Is an insurance provision that all loss or damage to goods is insured except that of inherent vice (self caused). nor against faulty packaging. Cargo . 114 Shipping Costs and Competitiveness In Northern Mindanao .Is a regular scheduled steamship line with regular published schedules (port of call ) from and to defined trade areas Berth or Liner Terms .Cargo handling. Also see Air Waybill and Ocean Bill of Lading. etc. quay or wharf where a vessel can be loaded or discharged CAD . and forwards the original letter of credit to the exporter without obligation to pay All Risk Insurance .Is an expression covering assessment of ocean freight rates generally implying that loading and discharging expenses will be for ship owner's account. Arrastre . pilferage. contract of carriage. such as fire. riots and civil commotions (See Marine Insurance) All-Risk Clause . collision. but not against innate flaws in the goods. (See All Risk Insurance).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.Bureau of Internal Revenue BOC . 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. verifies its authenticity.

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

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

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

insulated. NVOCC's. All types of containers will have constructions. the seller may pass risk and responsibility at the first of these. tilting container. Containerization . 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).e. 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.Is a concept for the ultimate unitizing of cargo used by both steamship lines and air cargo lines. Customs Bonded Warehouse .Many types of air cargo containers are offered.) 118 Shipping Costs and Competitiveness In Northern Mindanao . hi cube. consignee's. open top. for singular or unit handling and transport. 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. tank container. (i.Are designed to be moved inland on its own chassis and can be loaded at the shippers plant for shipment overseas.mean cargoes packed in containers for easy handling or transportation of same as a unit. platform. CY (Container Yard) . Containers (Ocean) . 8 feet wide and 8 feet high standard and 9’6” high cube. ventilated. if the transit involved the movement of cargo through several frontiers. materials and products together inside a hold in the form of boxes. 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. The seller must clear the cargo through customs on the export side of the border of handover. CIIS . Containers (Air Cargo) . open top. vehicle rack portable liquid tank.Container means any structure so designed to hold and keep articles.Is a schedule of charges assessed by the government on imported goods. Containers allow a greater amount of cargo protection from weather.Is a warehouse where imported goods may be stored for a total of three years without the payment of duty or taxes. holding. No container yard (CY) shall be a shipper's. whereas the buyer must clear the goods through customs on the import side.Ocean going ship designed to carry containers both internally and on deck. Container Ship . For example. obligating the buyer to arrange the main carriage thereafter. It is further defined according to their uses as dry cargo. tanks or the like. Some are self sustaining. generally having any internal volume or capacity of not less than one (1) cubic meter. . The term container means a single rigid. it is not exclusively road or rail or a road/rail combination) D. solid bulk. half high. refrigerated. assembling. storing and delivering containers. etc. dry van. all the stresses that may be applied in normal service use of continuous transportation. damage. or open top container without wheels or bogies attached. All containers must bear manufacturer's specifications. Basic types of containers are. fittings and fastenings able to withstand without permanent distortion. 35.240 lbs. insulated container.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. liquid bulk. or a forwarder's place of business. flat rock. refrigerated container. The containers are designed in various sizes and irregular shapes to conform to the inside dimensions of a specific aircraft. Bureau of Customs Customs Tariff . Containerized Cargoes . non-disposable dry cargo. having not less than 350 cubic feet capacity. and where containers may be picked up by shippers or re-delivered by consignees. temperature controlled flatrack.Customs Inspection and Investigation Service. Because the Frontier falls on the seller's side of the border. and 40 feet in length.The term CY means the location designated by Carrier in the port terminal area for receiving. and theft. Average outside dimensions are generally 20. DA – Department of Agriculture DAF (Delivered At Frontier) .Deadweight (tons of 2.W. unless otherwise provided.

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

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

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

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

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

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

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

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

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

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

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

There are three types of weight ton. Legal . Cargo is frequently limited by volume rather than weight. Truckers 130 Shipping Costs and Competitiveness In Northern Mindanao .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. Wet Lease .Payload achieved as against available.G. is a charge on all cargoes. whether containerized or not coming in/going out or transhipped through a port on the basis of the total metric or revenue tonnage whichever is applicable. the long ton. wrappers.P.Double extra strong Sources: PPA. fuel and so on (of dry lease). a rate is shown per weight/measurement ton.000 pounds.W. Wharfage A charge assessed by a pier or dock owner against the cargo or a steamship company for use of the pier or dock. identifying the commodities deposited.A receipt of commodities deposited in a warehouse.The weight of the goods themselves without the inclusion of any wrapper (c) Tare . The last is frequently quoted for cargo being exported from Europe. & I. the warehouse-towarehouse clause was extremely important. As example. Weight Load Factor .In many cases. with certain limitations. and also subject to the law of insurable interest. The total weight as shipped (b) Net .Warehouse receipt Warehouse Receipt .The weight of the goods including packing. Weight.Double extra heavy XX Strong . whichever will yield the carrier the greater revenue. weighing 2.Extra strong XX Heavy . This means that the rate will be assessed on either a weight ton or measurement ton basis. DTI.The weight of the packaging or container (d) Weight / Measurement Ton .Weighing and Inspection W.Net weight of goods.A.Weight guaranteed W. which override its provisions.240 pounds. but now its importance is diminished by the marine extension clauses. or containers. . the rate may be quoted on the basis of 2. but it is negotiable if made out to the order of a person or firm or to a bearer. and the metric ton weight 2.204. BOC. internal and external. ground support equipment. X Heavy .to-Warehouse . load factors of 100% are rarely achieved. . plus inside packing.Weight and/or measurement W/R . It is non-negotiable if permitting delivery only to a specified person or firm. carrier's option. Warehouse.(a) Gross .240 pounds or 40 cubic feet or of 1 metric ton or 1 cubic meter (e) Weight Ton .68 pounds. weighing 2. . expressed as a percentage. the short ton. Warehouse receipts are common documents in international banking. Weight .With Particular Average W/M .An arrangement for renting an aircraft under which the owner provides crews. When it was first introduced.Extra Heavy X Strong . Shippers. 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.

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

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

2009 ⋅ Xinhua News Agency – CEIS 2005 133 Shipping Costs and Competitiveness In Northern Mindanao . Maersk Lines The ASEAN Senior Transport Officials Meeting (STOM) The Shippers' Voice .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. the Competition Directorate-General of the European Commission Federation of ASEAN Shippers’ Councils (FASC) held a meeting with the Intra-Asia Discussion Agreement (IADA) on 27 April 2004 in Singapore on the Terminal Handling Charge (THC). Kluwerlaw 2009 Land Transportation Office (LTO) Website Light Rail Transport Authority Liner Shipping & EU Competition Law Manila North Tollways Corporation Metro Pacific Tollways Corporation Metro Rail Transit Authority Philippine Ports Authority Philippine Shippers Bureau Port Calls Presentations and Materials from the Mindanao Logistics Conference 2009 Province of Bukidnon Official Website Shippers in the greater China area attack surcharges.Hong Kong Shippers' Council Asia-Australia Discussion Agreement (AADA) Australian Competition and Consumer Commission (ACCC) Bureau of Customs Website Bureau of Internal Revenue . Manila Sun Star Cagayan de Oro THC Advisory. Chairman . rates.June 30.Online and Other References . cartels and conditions of carriage South Harbor.

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

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