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The yard at Asian Terminals Inc., Manila. Source: Asia Terminals Inc.

Manila yards half full and ready for action, port authority says

WT24 Desk

HONG KONG — The two terminals in Manila that experienced chronic congestion for much of last year are currently just over half utilized and ready for the peak season, according to the Philippine Ports Authority.

Manila International Container Terminal, the flagship facility of global port operator ICTSI, has 59 percent of its capacity being used, while Manila South Harbor that is operated by Asian Terminals Inc. is at 55 percent utilization.

Philippine Ports Authority general manager Juan Sta. Ana said in a statement that the current yard utilization rates were lower than before both ports suffered from congestion last year.

In June of last year, container levels reached a high of 85,000 laden 20-foot-equivalent units stacked at the Port of Manila, occupying 104 percent of the yards. Empty containers reached a high of 22,000 TEUs that month.

With the ports cleared and waiting for the next peak season, the Philippine Chamber of Commerce and Industry is now pushing for the construction of an elevated expressway it believes will avoid another congestion crisis.

In arguing for the expressway, the chamber said port congestion had cost the Philippine economy $1.55 billion and was a direct byproduct of Manila’s regular traffic problems that precipitated the daytime ban on heavy trucks. That ban made it nearly impossible to get cargo into and out the port of Manila.

While the expressway was previously planned, the chamber called for its approval and construction to be fast-tracked, as it would allow nearly half of the truck traffic from the port of Manila to bypass many of the city’s gridlocked streets.

In February last year, container handling at Manila quickly descended into chaos after the city government imposed a daytime truck ban aimed at keeping container vehicles off its notoriously choked roads. While the move had little effect on easing road congestion, containers offloaded in the port quickly backed up as trucks were unable to collect the boxes. By mid-year 2014, ships were reporting lengthy delays.

Container volume declined 3.5 percent from 3.8 million TEUs in 2013 to 3.6 million TEUs last year in what is regarded as a direct result of the congestion. Intra-Asia carriers had to scramble to adjust sailings and containers destined for Manila stacked up at the transshipment hubs of Kaohsiung, Hong Kong and Singapore.

The truck ban was eventually relaxed but it took months for the port backlogs to be cleared.

One of the positives of the congestion is that it forced the PPA to come up with alternatives for container carriers that were delayed outside the port or alongside for days. Banangas and Subic were the most obvious alternatives and vessels were diverted to those ports.

Political momentum has been developing for the formalisation of the presidential decree bringing the two ports under Manila, but shippers are not convinced, according to the Philippines Transport and Logistics 2015 report by Transport Intelligence.

Unfortunately, the alternatives are not being well received. While the government is keen to encourage the diversion of cargo to these ports, as well as the spread of manufacturing away from Manila, the policy is facing severe headwinds, despite various financial incentives from the PPA and operators to reduce port charges and vessel handling fees.

Shippers complain that trucking to Subic’s container facility, operated by International Container Services Inc., can cost up to five times as much as using Manila. Subic is situated to the north of the capital city, with a shortage of trucks and trailers and road congestion limiting the available fleet at any given time.

Most of the manufacturing is located south of Manila in the Laguna area of Luzon, and the container traffic will have to travel through the most congested areas of the city to get to the port, JOC reports.

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