‘Customs, maritime fees hiking logistics costs in Philippines’

MANILA, Philippines — Customs and shipping charges make up the largest allocation in the logistics expenses of traders, increasing the cost of transporting local and imported products in the Philippines.

A study made by blueFocus Infrastructure Advisors showed that customs fees paid by traders to get their shipments cleared account for as much as 60 percent of their logistics costs.

Also, the study pointed to maritime expenses such as freight charges and shipping fees as the second highest contributor in logistics spending at between 20 and 40 percent.

Traders also spend as much as 25 percent of their logistics budget on inland transport such as trucking services and warehousing charges. In contrast, port and terminal charges make up as little as five percent of the logistics costs.

The study estimates that bringing in an imported container into the Philippines will cost  $5,300, or about P311,372. On average, blueFocus said this represents 10 percent of the value of goods inside the shipment.

Meanwhile, the study said a similar trend can be observed in domestic trade, where maritime and inland transport make up half of the logistics costs.

Further, port and terminal fees account for only eight percent of transport spending for domestic trade, again making it the lowest expenditure in the logistics chain.

The study found out that food products, including fresh produce and processed goods, comprise the largest share at 40 percent of outbound containers from Manila.

Clothing and textile products came next, followed by construction materials and health supplies. blueFocus partner Pablo Corralo Llorente said maritime charges are expectedly more expensive in the Philippines than in its neighboring countries in Southeast Asia.

“In international and domestic logistics, port and terminal charges comprise the smallest portion of the total logistics cost. (The) highest costs are represented by customs clearance and maritime transportation expenses,” Llorente said.

blueFocus, a consultancy firm focused on logistics, was commissioned by a foreign manufacturer to do the study for its plan to locate a factory in the Philippines.

Llorente reported the results of the study in a food security forum hosted by the Makati Business Club.