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CNS

‘national security issue, not trade’

by:CNS     2020-01-15
The domestic shipping industry opposes plans to eliminate Cabotage laws, stressing that this is a national security issue and has nothing to do with the country\'s high shipping costs.
Philippines International, on the contrary
Island Shipping Association (PISA)
It is proposed to establish manufacturing and production center clusters in the surrounding areas of the port to achieve economies of scale and to significantly reduce the high cost of inland cargo transportation in areas with backward infrastructure. A long-
In its position paper, the PISA stated that the long-term solution to reducing freight and logistics costs is to develop a national development plan that centralizes manufacturing and production centers around port and airport infrastructure.
\"We all want to reduce shipping costs, but it is wrong for the government to cancel the taxi because it has nothing to do with trade and is for national maritime safety,\" said Edgardo Lacson, president and owner of tanker operator MIS Maritime.
Lacson explained that cabotage is not a trade issue, but an act carried out by countries for strategic public utilities, which is critical to the continuity of trade and national maritime security.
Although the cost of the goods is high, this cannot be counted separately in the freight, but rather in many factors, such as the high cost of inland transportation of the goods to the ship, which in turn brings the goods to the market.
An example of the country\'s competitive corn production and logistics will show that for Bukidnon\'s P14 price per kilogram of corn, there is only 70 cents shipping cost.
Trucking and fuel costs account for more than 50% of the price.
There are many factors affecting the cost of goods, mainly due to the lack of infrastructure and economies of scale to bring these goods to ports.
For example, shipping companies will not be able to dock to provide them with a sufficient number of ports, because this is a huge cost for them and the shipper.
In order to solve the problem of high logistics cost, pizza proposes to gather industrial or production centers around ports or airports.
The Pisa position paper emphasizes that the long-term solution to reducing freight and logistics costs is to develop a national development plan that centralizes manufacturing and production centers around port and airport infrastructure.
Pizza noted that many of the country\'s export zones and agricultural production centres are spread across the country, making it very difficult to bring goods to market.
In order for the Port of badangas to become a viable international and domestic port, manufacturing should be developed and promoted in the land areas around it.
Luisita has a chance too-
Due to the proximity to the airport and the port of Subic, the Clark and Subic corridors promote light industry.
Provinces like Sarangani can develop a fisheries corridor that will be serviced by General Santos or new infrastructure, but with the aim of getting the economy to attract larger vessels to serve its trade.
\"Trade does not follow shipping.
Shipping is the same as trade, airports are planned and developed as hubs, and Pisa said: \"Port hubs with production clusters around should be identified and promoted, the ultimate goal is to make the country competitive in all aspects. \".
In addition, the removal of the Cabotage Act also means allowing foreign flag ships to compete with the already fledgling domestic shipping industry.
China has only nine major passenger ships, a total of 82, compared to China and thousands of other foreign flag ships, which are sovereign countries and do not pay taxes to the countries they are calling.
Domestic shipping companies have to pay taxes, but foreign ships do not pave the way for the imbalance in the cancellation of cabotage laws, as it will allow foreign ships to enter any port in the country without control.
Cancellation of taxis could result in companies moving registration management to Hong Kong or Singapore to minimize income tax and fuel tax, PISA said.
For an archipelago country that relies heavily on its international relations
The island navigation structure, if the country does not have a strong domestic flag sector in the Philippines, will put the country at risk.
In the future of our coast and shipping industry, it is difficult to regulate illegal trade, smuggling: Overseas Shipping, crew, ship repair will only cater to foreign customers.
Freight charges will be charged in foreign currency and the government will lose tax revenue, Freight added.
According to the PISA, the intention of global cabotage is to ensure that a developed and dynamic domestic shipping industry provides strategic services to ensure the continuity of trade and support national maritime security, become a reliable resource in national disasters and emergencies.
Countries like Australia and Indonesia have relaxed shipping in the past and are taking steps to rebuild their coastal shipping.
Indonesia has returned to strict shipping laws due to the migration of shipping companies to Singapore.
Australia passed the 2012 coastal trade act in July 1, 2012 as part of its \"Stronger Economy\" reform legislation that revitalized coastal shipping in Australia.
It is worth noting that the pizza references the protection of cabotage.
Article 1987 of the Constitution of the Philippines states: \"There is no franchise, certificate, or any other form of authorization for the operation of public utilities, except for Philippine citizens or companies or associations organized under Philippine law, its capital is owned by at least 60% of the Citizen x xx.
\"In addition, with respect to Sections V and III, Section VI of the Republic Act
9295: \"Foreign vessels shall not be allowed to transport passengers or goods between ports or places within the territorial waters of the Philippines;
\"Except for domestic shipowners or operators, no franchise, certificate or any other form of authorization shall be granted in the transport of goods or passengers or in domestic trade;
\"Domestic ship operator\" or \"domestic ship owner\" x xx refers to a business partnership wholly owned by Filipino citizens and Filipinos or at least 60% of companies (60%)
In terms of the role of cabotage in the country\'s trade, the PISA points out that the Philippines is a \"feeder economy \".
This means that exports and imports are not brought directly into and out of the country by large mother ships (
Dimensions range TEUs from 6,000 to 18,000 container equivalent)
Such calls have also been made for Asian hub ports such as Kaohsiung, Hong Kong, Shenzhen and Singapore.
These smaller side ships (
Dimensions range TEUs from 2,000 to 3,000 container equivalent)
Shipping of goods from Asian hub ports to the Philippines increased the average freight rate by $200.
This means that our import and export products are more expensive for consumers.
Regional vessels are usually common. loaded (co-shared)
Through foreign lines.
Most export trade is carried out directly by these foreign feeders from General Santos and general Davao (
Canned bananas and tuna)
, Cagayan del Oro (
Canned pineapple
And trade in manufacturing centers such as Cebu and Manila.
The \"transshipment\" goods of these exports are not shipped regularly by domestic shipping companies, unless foreign shipping companies stop trading in the Philippines without being as profitable as other markets, which has happened in the past.
\"The reason why the mother ship does not call the Philippine port is because we do not have a large manufacturing base.
\"Even if the foreign chamber of commerce advocates a move to the ports of Batangas and Subic, there is very little shipping activity in these ports because shipping follows trade flows,\" Pizza said . \".
In addition, Pizza said that the local shipping industry has been trying to improve its competition in response to the government\'s measures to improve market competition.
Former Public Service Council (1926)C. A. No. 146)
-Encourage investment in shipping by granting exclusive franchises.
In 1994, the government abandoned the charter of fixed routes and authorized the cancellation of liner shipping.
It requires at least two operators per route.
National highway of the 2003 Republic (SRNH)
Many new players have entered domestic trade on short and long routes.
Over the years, domestic shipowners have competed with services including ships, container yards and warehouses, trucks, chassis, software investments, and in some cases land-based equipment for ports and shore cranes.
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