Joint order on foreign liners’ fees soon signed

The draft joint administrative order (JAO) that will regulate local charges imposed by international shipping lines operating in the Philippines and provide measures to address port congestion is in the “final stage of refinement”, according to Bureau of Customs (BOC) deputy commissioner for Assessment and Operations Coordinating Group Atty. Edward James Dy Buco.

The draft will then up for the signature of secretaries of the Department of Trade and Industry (DTI), Department of Finance and Department of Transportation (DOTr), Dy Buco said in a speech during the general membership meeting of the Philippine Multimodal Transport and Logistics Association.

The draft JAO is intended to regulate origin and destination charges imposed by foreign carriers, and lessen port congestion.

Dy Buco noted that regulating international shipping lines and container yards, as well as other third party logistics service providers, is now under the jurisdiction of BOC under the Customs Modernization and Tariff Act (CMTA).

Specifically, Section 1226 (Supervision and Regulation of Third Parties) of CMTA states that third parties such as foreign carriers, freight forwarders, and container yards, among others, transacting with BOC on behalf of importers and consignees shall be treated equally as true importers or consignees.

One of the salient points proposed in the latest draft JAO, according to Dy Buco, is that other local charges to be applied by all international shipping lines, freight forwarders, and customs brokers that handle import and export cargoes in the Philippines “must be approved by the Bureau of Customs.”

He said BOC will issue the guidelines for this.

To ensure transparency in the imposition of costs, another proposal is for all international shipping lines to submit regularly to the DTI and BOC their monthly average freight rates per route.

All international shipping lines, including shipping agents and general agents, will also be asked to implement an expeditious procedure for refunding container deposits once consignees return the empty containers.

Under the draft JAO, container deposits posted with international shipping lines, shipping agents, and general agents have to be refunded within 15 days after the empty containers are received in the container yard or container terminal of the shipping lines.

The cost of recovery of all international shipping lines for demurrage and detention charges will be determined by BOC, Dy Buco noted.

“In cases when international shipping lines or freight forwarders cannot provide adequate container yard space, detention and demurrage charges shall not be imposed,” he added.

Container yards
On addressing port congestion, a key point in the draft JAO is for international shipping lines and freight forwarders to ensure that space is available in their designated container yards.

If the designated container yard does not accept the empty container “for reasons beyond the control of the trucker, no demurrage or detention charge shall be imposed by the shipping lines and freight forwarders,” Dy Buco said.

In addition, international shipping lines will pay truckers, customs brokers, and freight forwarders an empty container rejection fee, whenever applicable.

Terminal operators, on the other hand, will be asked to limit the entry of empty containers to those with special permit to load, which are those for immediate loading to the vessel. Dy Buco said this is now being done, pursuant to an order released by BOC.

Another major point is for foreign carriers to co-load their empty containers and ensure that the number of empty containers loaded onto the vessel is almost proportional to the number of containers discharged.

BOC, for its part, will expedite the accreditation and activation of inland clearance depots or dry ports, as they can also serve as additional space for empty containers.

One BOC Manila collection district
Also proposed is for BOC to study and recommend to the President Rodrigo Duterte the “creation of a single district in Metro Manila,” which Dy Buco said would mean that BOC’s district offices-Port of Manila (POM) and Manila International Container Port (MICP)-would be merged into one.

He explained that with the merger, vessel queuing will be lessened because whether the ship’s destination is POM or MICP, they can still load and unload in either of the two. He noted, however, that this measure is beyond the powers of the Customs commissioner and requires an order from the President.

Further, under the draft JAO, terminal operators and container yard operators will maintain utilization rate at 70%, to be strictly monitored and supervised by BOC.

International shipping lines and container yard operators will also submit an inventory of their empty containers. In addition, foreign carriers will submit their program on re-exporting empty boxes.

Dy Buco said that eventually, monitoring will be done electronically as BOC is drafting an order that will require container yards to have electronic coordination with BOC on the submission of inventories.

Dy Buco noted that the JAO provides a “permanent solution to congestion.”

“So if this JAO will be implemented, I’m quite sure that congestion will not happen again in the Philippines,” he said.

The JAO is part of DTI’s commitment to stakeholders during its 1st Logistics Services Philippines Conference held last December to find measures to address the high cost of international shipping, a frequent complaint among stakeholders.

After the draft JAO was first presented to stakeholders for comments in a public hearing last February 14, it has since been reviewed and revised by the involved agencies led by DTI, BOC, and DOTr.

After the JAO is signed, which DTI hopes will happen before the 2nd Logistics Services Philippines Conference in July 2019, the BOC, Philippine Ports Authority, Bureau of Internal Revenue, and Maritime Industry Authority shall craft and issue their own orders to implement the joint order. The agencies’ orders will then be subject to public consultation.

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