05 MARCH 2023, MANILA — After careful consideration and series of reviews, PPA Administrative Order (AO) No. 04-2021 or the “Policy on the Registration and Monitoring of Containers” of the Philippine Ports Authority (PPA) and its Implementing Operating Guidelines gets a greenlight from the Anti-Red Tape Authority (ARTA).
PPA was able to submit to ARTA the regulatory impact statement of the Trusted Operator Program- Container Registry and Monitoring System (TOP-CRMS) on February 2, 2023 and after a month, ARTA has given it a rating of 36- "Good Practice RIS”.
ARTA’s OVERALL REMARKS
“PPA has provided concise and satisfactory evidence on all RIA sections. Hence, the RIS was assessed as Good Practice”
This means the ARTA acknowledged the problem on container deposits and empty container returns and recognized that the PPA through TOP-CRMS is providing the solution to the long time problems of the port users and truckers. Under the current system, the export of empty containers is managed by shipping lines with little or no government regulation. Empty containers stored at the port terminals are occupying valuable space at the operational area, adversely contributing to port congestion which negatively impacts the quay crane production rate at the ports. In 2022, empty containers accounted for more than 20% of yard utilization at the port terminals with an average dwell time of almost triple of the allowed 72 hours.
EASE OF DOING BUSINESS: APPROVED
ARTA also concluded that there is a lack of regulation to address the current issue which is also the main cause of the problem. The PPA’s TOP-CRMS also meets ARTA’s criteria for cost-saving mechanisms including the fee on container deposits, port access roads, and has reduced the dwell time of empty container returns to less than 72 hours.
Under Section 6 of Presidential Decree No. 857, PPA has the duty to supervise, control, regulate, construct, maintain, operate and provide facilities or services belonging to the Authority, thus, pursuant to this mandate, TOP-CRMS will provide efficient port services to the public.
COST BENEFIT ANALYSIS
Along with the submitted ARTA compliance from the Cost- Benefit Analysis section, are possible options (regulated or non-regulatory) with their respective 10 year implementation net cost. As indicated, TOP-CRMS within a 10 year period implementation, will only have a net benefit of P470,726, 367, 724.00. Much cheaper than the highest net cost of Container Ledger Account (CLA) executed by Association of International Shipping Lines (AISL) that weighs negative P472, 038, 745, 198 under the 10 year implementation.
Moreover, TOP-CRMS is wisely economical compared to the second highest net cost of P471, 889, 180, 692 from Electronic Tracking of Containerized Cargo (e-TRACC) System of the Bureau of Customs under the 10-year period.
However, if shipping lines were to remove the imposition of container deposit, it will only have a net cost of P200, 803, 512, 082 under the said ten-year implementation period.
While, if the public still remains under the status quo, or in short, do nothing, they will still experience a 10 year implementation net cost of P470, 019, 624, 356.
To break it down, TOP-CRMS aims to lower logistics cost by replacing the status quo of container deposit that amounts to P10,000- P30,000 with a P250 container deposit insurance and P730 container monitoring fee. TOP-CRMS will also affect empty container handling costs as it will reduce the existing charge from P6,400 to P3,520.
The PPA policy on Container Registry and Monitoring System will ensure that empty containers will be returned without delays as it is more efficient, transparent and less costly. Making the existing other fees under the return routine of every inbound foreign-owned container, such as Pre- Advise that is priced P1,500; Documentation fee that amounts to P1,200; Per lift-on and per lift-off that each cost P1,100; and Three days’ storage that is priced at P1,500, eradicated. Also, it will erase the other surcharges that still happens today which are, Shipping Line Detention fee (per day paid by truckers) that charges P4,000; and Trucker Detention Fee (charged to the importer) that is priced at P15,000.
Unfortunately, if TOP-CRMS will not intervene, the mentioned charges will still remain and continue under the policies of the current system, such as CLA and e-TRACC. Also, if given the fact that shipping lines were to remove the container deposit, the other surcharges will still continue.
WELCOME DEVELOPMENT
PPA General Manager Jay Santiago is positive about the ARTA’s rating despite the initial deferment of the program by the PPA Board. "This is a welcome development, considering the concerns raised about the program, but the green light of ARTA means TOP-CRMS is the best option to solve the current problems” Santiago said.
“PPA will continue to fine-tune the program and the implementation of PPA AO No. 04-2021 and its IOG will be constantly monitored and the necessary adjustments to the IOG will be done as necessary. TOP-CRMS seeks to remove the payment of container deposits and to efficiently manage the return of empty containers. In fact, there have been a series of public consultations and we have adjusted based on the need of the stakeholders”, Santiago added.
The TOP-CRMS is part of PPA’s digital transformation initiatives in response to the call of President Ferdinand R. Marcos, Jr. for government agencies to digitize operations in order to make services to the public more efficient, more transparent and less prone to corruption.
###