Truck rates for international cargoes will not decline despite plunging global oil prices, according to Philippine truckers.
Confederation of Truckers Association of the Philippines (CTAP) director Alberto Suansing told PortCalls in a text message that while fuel cost eats up around 30% of the total operating cost of truckers, “it is still competition that primarily determines the trucking rates.”
Samson Gabisan, director of Aduana Business Club, Inc., also told PortCalls that unlike truckers in the United States, “as a matter of practice, (local) truckers base their rates on distance, not on the price of fuel.”
Oil prices dropped to fresh 5-1/2-year lows of below $50 a barrel on Jan 5 as worries about a surplus of global supplies and lackluster demand dragged on oil markets.
But Integrated North Harbor Truckers Association president Teodorico Gervacio acknowledged that while fuel costs represent only a small portion of rates for Metro Manila-bound cargoes, they do affect rates for shipments bound outside Metro Manila.
Gervacio told PortCalls they have an agreement with the Philippine Liner Shipping Association to lower rates by P172 each time oil prices decline by P5, and increase them as well by P172 per P5 increase in fuel price.
Gervacio noted they have already decreased rates about three times as a result of such arrangement.
Due to the long truck turnaround, an effect of the Manila port congestion triggered by the Manila City truck ban, truck operators have increased their rates from 50% to more than 100% last year.
Earlier, CTAP’s Suansing said truck rates will decline once congestion eases and truck turnaround returns to pre-congestion levels.
The Philippine Ports Authority earlier said the nine-day holiday from December 24 to December 28 and from December 30, 2014 to January 4, 2015, could bring up port utilization back to congestion levels. – Roumina Pablo
Image courtesy of hywards at FreeDigitalPhotos.net
