Swift resolution of FedEx case urged

MANILA, Philippines - Industry insiders in the freight forwarding business believe that only a swift and resolute ruling from the Supreme Court (SC) can appease an industry reeling from the Court of Appeals (CA) decision nullifyingFederal Express Pacific Inc. (FedEx) license to operate in the country.

Two local freight forwarding companies – Merit Freight International, Inc. and Ace Logistics Inc. – earlier  challenged the constitutionality of FedEx license because, citing the law, it is not a fully-owned Filipino company.

The decision created an uproar among leaders of the equities market – the Management Association of the Philippines, the Makati Business Club, among others. They all cited that the decision puts the country at risk of being avoided by foreign investors at a time that the Philippines is getting favorable economic upgrades.

To be directly affected by the decision are more than a dozen international airfreight forwarding firms such as UPS, DHL, FedEx, TNT, Ecu Line, Expeditors, Kintetsu, Konoike, Logwin Air, MIQ Logistics, Mitsui-Soko, Nippon Express, NNR Global Logistics, and Scan Global Logistics.

Other international air and sea transport companies operating in the Philippines which would indirectly affected are: Maersk, Mitsui OSK Lines, Air Asia, Air China, Air Niugini, All Nippon Airlines, Asiana Airlines, Cathay Pacific, China Airlines, China Eastern Airlines, China Southern Airlines, Delta, Dragon Air, Egypt Airlines, Emirates, Etihad, Eva Air, Gulf Air, Hawaiian Airlines, Hong Kong Express, JALWays, Japan Airlines, Jeju Air, JetStar, JetStar Asia, KLM, Korean, Kuwait, Malaysia Airlines System, Qantas, Qatar Airways, Royal Brunei, Saudia, Singapore Airlines, Thai Airways, Tiger Airways, United, among others.

The CA also finds itself at the receiving end of other entities that are affected by its ‘unclear’ ruling especially concerning business and commerce. The industry cites as totally ambiguous the case between the cities of Taguig and Makati where its jurisdiction was transferred to the latter but the implementation of which was subjected to different interpretations.

At the heart of the FedEx issue is the Civil Aeronautics Act (Rep. Act 776) under which these foreign freight forwarding firms are allowed to operate. This law states that Philippine citizenship is only required for the issuance of “a permit authorizing a person to engage in domestic air commerce”.

Also in various opinions from as far back as 1946 (with the latest one being issued in 2011), the secretary of justice has interpreted the “Constitutional provision requiring Philippine nationality for public utilities as not covering airfreight forwarders exclusively engaged in international commerce and carriers engaged exclusively in the foreign transport of passengers or goods or both, to and from Philippine airports and seaports.”