Shipping companies and truckers increase survival fees – Manila Bulletin
Shipping companies said they were raising freight rates by 25% while truckers by 30% citing the ‘survival’ issue amid continued losses on the high cost of fuel.
In a radio interview, the president of the Philippine Liner Shipping Association, Mark Parco, said that since it is a deregulated industry, its members have already started raising tariffs after informing their constituents. or their customers. Some increase their rates in two weeks, others do it even later.
“It’s a matter of survival,” Parco said, noting that the cost of fuel used to make up only 30-40% of operating costs, but has risen to 50% as prices have recently risen to $120 per barrel, although prices have fallen to $100 per barrel. recently.
“It will protect our members from volatility,” he said. Ships also use different types of fuels such as diesel, special fuel, and bunker with different price tiers.
He said shipping companies had not raised fares in the past two years, with the government asking them to maintain their fare hikes. They even provided free delivery for relief cargo during Tyhoon Odette.
“But now is when we need help, this time a matter of survival,” he said.
According to Parco, the shipping companies have lost. Based on their members’ record, shipping companies lost 600 million pesos in 2019 and 1.5 billion pesos in 2020. The 2021 record, which is due to be submitted in June this year, also indicates a further decline. deeper than the 2020 figure.
“It’s a matter of survival, it’s a cash flow issue. So it’s something na di pwede that names uutangin (we can’t borrow),” he pointed out.
MARINA Administrator Robert A. Empedrad, however, pointed out that even though shipping rates are already deregulated, ocean liners are still required to notify them two weeks prior to the rate increase, as regional managers need to consider whether their prices are excessive or not.
Also, Parco said, cargo volume has remained low because people are still scared. Unlike the Philippines, other countries, such as the US government, have provided grants to revive domestic industries.
He further explained that the increase in the prices of goods should not be blamed on the increase in shipping costs, as they are only 2-5% of the total cost of a product. Their tariff only covers port-to-port costs, he said.
Meanwhile, truckers said they are already charging 30% on top of their position to qualify for a fuel subsidy.
Mary Zapata, president of the Confederation of Truckers’ Associations of the Philippines (CTAP), said as fuel prices have more than doubled from P62 to P68 to P32, their members are demanding up to 100% higher fees . The cost of trucking is 10% of the total cost of a product, she said.
The CTAP board, however, prevailed and said a 30% increase would be fair enough to cover fuel increases and also considering that businesses are still recovering from the pandemic.
Zapata also said he consulted with industry players and associations and government agencies, including the Ministry of Commerce and Industry, on the rate hikes.
At 30% increase, she said if the rate for a 20ft container is P10,000, the increase is P3,000. She however clarified that customers and truckers will have to negotiate the final rate. .
“What is important is to recover the fuel costs that we have incurred,” he said.
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