Cargo forwarders warn of massive dislocation

Cargo forwarders have warned of massive dislocation in the aviation industry, particularly the freight forwarding business, once the government adopts open skies on cargo.

"It would be a folly to open our skies now to countries like the United States," said the cargo firm Asia Overnight Express Corp. during the recent Free Trade Alliance (FTA) forum.

The company said, "At no time at all should the government give away the right to any foreign carrier to be able to operate just like Philippine carriers within the country. Such a patrimony should not be given up at all cost."

It said no Philippine all-cargo carrier would have the capability to launch services equal to those of Federal Express (FedEx) and United Parcel Service (UPS) today or in the near future.

Robert Lim Joseph, president of the Save Our Skies (SOS) movement, whose membership includes cargo forwarders and brokers, said an open skies on cargo would spell the death of the local cargo business.

"Airlines will convert themselves into total logistics providers, and this would trigger the end of medium-sized and small freight forwarders and brokers," Joseph said.

He said there is already a low demand in cargo traffic from the US to the Asia-Pacific, resulting in a depressed market.

"Imagine what will happen to local cargo forwarders and brokers if we allow the foreign big players to dominate the cargo market," Joseph stressed.

Cargo forwarders recalled that Fedex, which is operating out of Subic, and UPS, operating out of Clark, used to handle small cargoes or parcels. Now, they are handling volume cargo on commercial quantity, in the process "stealing" business from other airlines.

They said since these mega cargo airlines have established themselves as an integrator and logistic provider, they deal directly with shippers and importers. "As a result, cargo agents are slowly being dislocated."

During the FTA forum, cargo forwarders urged the government to maintain the present bilateral agreement on all-cargo services between the US and the Philippines.

"An open skies regime will not work to the advantage of Philippine carriers. It would be a game between giants and dwarfs where the level of playing field definitely and immediately favors the big guys," they said.