How cranes-for-rent make commodities unaffordable

Forced rental of cranes. That’s another racket at seaports that makes commodities costly.

Arrastre servicers control the wharfs. Only their cargadores may load and unload ship cargo to and from trucks. Most also provide stevedores who exclusively may board ships to pull out or stow cargo in the hold.

The Philippine Ports Authority wants quick, efficient arrastre and stevedoring. PPA compels servicers to provide enough cranes, forklifts, pallets, nets, pulleys, chains, ropes, manpower as part of their fees.

But they disobey. Most have no cranes. Forklifts and other equipment are few. On alibi of skilled-labor shortage, only four- to five-man gangs work per ship instead of the required 12.

Many of the 3,623 domestic cargo ships are too small and old to be fitted with front and rear cranes. And cranes frequently break down. The Cebu Ports Authority allows shipowners to park cranes on ground; those who do not own cranes may tap inexpensive lessors.

Most of the country’s 821 other ports give no such leeway. Port managers alibi lack of parking space or security risk. Most ports also do not operate round-the-clock but only in daytime.

Shipowners are obliged to rent cranes from the same arrastre/stevedoring firms that must provide the equipment as part of service fees. Rental cost: P3,500-P6,000 per hour, depending on lift tonnage. Minimum rent is for eight hours, or P28,000-P48,000 per crane.

Since cargo loading/unloading usually takes three days, shipowners rent cranes for P84,000-P144,000.

Worse if arrastre/stevedoring firms dispatch undermanned gangs. Loading/unloading can take ten days. Crane rental: P280,000-P480,000.

No receipts are issued for the forced rentals. Racketeers hide it from PPA. Shipowners pay rather than leave vessels idle in long queues at the wharf or anchored out of harbor.

Shipowners pass on the rental cost to client-shippers, who pass it on to consumers. Food, clothing, shelter, construction, schooling, health, communications and small-business materials become costly.

How much does the racket rake in annually? A vessel can make 25 port stops per year. Meaning, it must rent cranes 25 times for ten-day stretches, or P7 million-P12 million.

Multiply that by even only half of cargo ships, or 1,811: a staggering P12.7 billion-P21.7 billion, untaxed.

That’s the added cost of commodities Filipinos must bear. To think that they’re suffering the worst food inflation since the first three years of martial law, 1972-1975.

Will anyone care to tell President/Agriculture Secretary Ferdinand Marcos Jr. this?

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Expect another price spike of foods and goods shipped through Manila ports – due to an increase in harbor pilotage/tug towing rates.

Everyday hundreds of shipowners who berth in Manila are required to pay the hefty fees. They charge these to shippers, who pass on the burden to consumers.

Unregulated pilotage/towing charges are among the many hidden sea transport costs that push up commodity prices. Agriculture and trade officials go after small overpricing retailers but ignore the port servicers.

Manila Harbor pilots have begun charging vessels P10,000 to dock and another P10,000 to undock – a 43-percent increase from the P7,000 imposed only six months prior.

Most pilotage/towing firms in the country’s 821 other ports may follow suit. Vessels that deliver to those ports will be charged higher docking/undocking rates. That can set off commodity price spirals.

Harbor pilots obligate shipowners to rent tugboats supposedly for safe towing in and out of piers. No exemption, not even for vessels that have their own tugboats.

Ships that don’t pay are barred harbor entry and must anchor out at sea. Those that do pay must handle cost of ship and pier damages caused by negligent pilots they’re forced to hire.

PPA is unable to enforce its much lower prescribed pilotage and towing fees.

The Manila Bay Harbor Pilots’ Partnership last April 14 notified cargo handler SeaFord Shipping of the rate increase. Other shipowners expect similar memos, stating:

“To: All operations clerk (sic) – North Harbor duty

“Subject: Increase in charges when using pilot launch to augment tug assistance during berthing/unberthing

“Despite of (sic) our recent increase to P7,000 last Nov. 2022, our cost evaluation on the expenses incurred when using our Pilot Launch being hired by the Agent to assist their vessel in augmenting the tug during berthing and unberthing at North Harbor; the overall cost for fuel, repairs and maintenance as well as allocating funds for drydocking, has dramatically increased, due to the increase of the above factors.

“The present charge per assist isn’t sustainable which compelled us to increase substantially, effective May 1, 2023 under the following rate:

“(1) SF vessels from P7,000 per assist to P10,000 per assist per pilot launch

“Please advise the Agent that using our pilot launch for mooring isn’t our mandatory obligation, but rather an extension of service to facilitate the smooth berthing/unberthing of their vessel.

“Should they opt to have another service provider to assist their vessel during the pilotage movement, the Pilot on-duty is compelled to use it.

“(Signed) Capt. Rogelio P. Taruc, Sr., Chief Pilot”

PPA prescribes only P41.70 to P300 pilotage/towing charge, depending on ship tonnage, 100 to over 5,000.

In Batangas, government and private ports collect P5,000 to P25,000 to berth/unberth. Usual in other ports is P5,000.

If all 3,623 local ships berth or unberth for P5,000 anywhere in one day, total pilotage/towing is P18,115,000. In one year that’s P6,611,975,000 in added cost to consumers.

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