PHILIPPINE shipping lines are looking to scrap the automatic fuel rate adjustment (AFRA) agreement they signed with members of a trucking association and are instead calling for separate agreement with consignees represented by the Supply Chain Management Association of the Philippines (SCMAP).
The Philippine Liner Shipping Association (PLSA) and Integrated North Harbor Trucking Association (INHTA) have a standing agreement allowing truckers to automatically increase or decrease the fuel surcharge for every P5 increase/decrease in fuel pump prices based on the weekly posted price index issued by Pilipinas Shell.
Under the current set-up, PLSA on behalf of INHTA collects the AFRA from consignees who are SCMAP members, sometimes leaving PLSA members to pick up the tab if SCMAP members do not recognize the adjustment.
“We really want to review our current arrangement with INHTA… we are proposing individual pacts between PLSA and SCMAP and between INHTA and SCMAP,” an executive of PLSA said.
“Lines subsidize the AFRA every time SCMAP members do not recognize it,” the source, who requested not to be named, explained.
“All parties should agree in order not to affect the consuming public while also not compromising operations and revenue-generating initiatives of INHTA and SCMAP members.”
PLSA is now working on the percent at which the AFRA, under a proposed SCMAP deal, will kick in.
INHTA is again planning to increase the fuel surcharge following the recent round of fuel price hikes.
