Shipping sector balks at extra P5.4 B arrastre fees
International shipping lines balk at paying an extra P5.4 billion as the Philippine Ports Authority (PPA) seeks to impose never-before-assessed arrastre rates on empty containers.
The Association of International Shipping Lines (AISL) opposed PPA’s imposition of arrastre charges on empty containers at the Manila and the Batangas ports.
Should the PPA follow through with the charges, shippers only have two viable options, both disagreeable, in order to recover the additional cost being slapped on them, the AISL warned.
Either they reduce their capacity to remain efficient or pass on the P5.4B cost increase to customers, the AISL told the PPA board.
Passing the arrastre charge to customers will further increase the cost of freight and logistics, to the detriment of small and medium-size enterprises, they underscored.
Worse, PPA’s slapping arrastre charges on empty containers will “adversely affect the countrys competitive edge in the shipping industry compared to its Southeast Asian neighbors”.
Already, the Philippines ranks highest in terms of handling costs for 20-footer and 40-footer containers in Southeast Asia, the AISL argued.
That is why applying arrastre on empties will only add to the over-all cost for lines servicing the Philippines and further skew comparison with the SEA countries, the association reiterated.
The PPA’s imposition of arrastre charges on empty containers comes at “a most inopportune time” with the Philippine economy already under severe stress due to the coro....