Domestic shipping industry in sorry state

Operating in a country composed of more than 7,000 islands, the local shipping industry is, ironically, in a sorry state.

"Domestic shipping is important to our prosperity as a nation but the playing field is not leveled for us," said lawyer Josephine Urranza, president of the Domestic Shipping Association (DSA).

Urranza said the local maritime industry has long been overlooked by the government.

She said local freight rates are viewed by some people as "high," but the fact that local ships operate in a "severely regulated environment" is not taken into consideration.

"Our own ships operate in a restrictive environment. We are liable for taxes on fuel, spare parts, steel plates, vessel repairs, income and others. Our insurance premium is also much higher," she added.

Urranza said those factors greatly contribute to the determination of shipping rates and foreign vessels as well as local and international airlines are exempted from these obligations.

"The playing field must be leveled. What you give to the airlines, what you give to the overseas vessels, you give to us. Or either you take away their privileges or give them to us," she proposed.

The lady lawyer noted that local ships are normally compared with international vessels, which should not be case. "If we are to be compared, it must be with the domestic shipping of Indonesia and other countries in Asia," she added.

DSA is also strongly opposed to the plan of Department of Transportation and Communication (DOTC) to relax the Cabotage Law, which prohibits the entry of foreign vessels in routes being served by local ships. The DOTC plan is intended to spur economic growth in the Mindanao region.

"Relaxing the Cabotage Law is not the answer. It undermines the potential of the local shipping industry," Urranza said. She pointed out that the trade volume in the country is too small for foreign ships. Local ports are also not prepared to accommodate huge foreign ships.

"Our vessels can carry only 300 containers who will share the cost. Foreign ships can carry a minimum of 1,500 containers," she said.

Furthermore, local ports are severely congested and do not have cargo handling equipment that are considered vital to shipping operations.

"The set-up in our ports is ‘to each his own.’ Ship owners have to provide all the cargo handling equipment. In international shipping, we don’t do that," she added.

Urranza urged the government not to ignore the domestic shipping sector, especially now that "we are at a crossroad of globalization and trade liberalization."

She said that to keep in step with the globalization, the government must help local ship owners go overseas instead of allowing foreign vessels to enter the local market.

"We are an archipelago. We are not like America that is a huge landmass that can be connected by rail or road. In the Philippines, your vessel is the extension your road network. We have to make that strong," she added.