THE Philippine Interisland Shipping Association (PISA) said relaxing the cabotage rule does not guarantee lower shipping costs in the country.
The statement was made after the Northern Mindanao Shippers Association and the Davao City Chamber of Commerce and Industries, Inc. (DCCCII) claimed interisland shipping rates are higher than ocean freight rates and relaxing the existing cabotage rule would allow for cheaper shipping rates.
PISA executive director Col. Leonardo Odo–o said freight rates for Manila-Singapore and for Manila-Davao presented by DCCCII during the recently concluded Mindanao shippers’ conference were not comparable since the Manila-Davao rate cited included terminal handling and documentation costs and the Manila-Singapore rate was purely ocean freight rate.
“Instead of working on the lifting of the cabotage, we encourage our clients and shippers to join us in changing trading practices and restructuring the maritime industry’s legal framework,” Odo–o suggested.
“It is only through major business planning can we effect a reduction in logistics costs. The lifting of the cabotage is not the solution,” he said.
In particular, he suggested that traders and shippers “look into changing trade practices such as shifting the mode of transporting grains from containerized to bulk shipment in order to lower transport cost for Mindanao to Manila.
“For example, from P0.43 per kilo (grains shipped in containers) may be decreased to P0.30 per kilo when shipped in bulk as well as shipping fruits and vegetables in reefer containers to lessen spoilage and increase profits,” he said.
