Shipping lines oppose arrastre charges on empty containers

The Association of International Shipping Lines opposed a plan by the Philippine Ports Authority to introduce never-before-assessed arrastre rates on empty containers, saying any addition to shipping costs will not augur well with the country’s efforts to rebound from the impact of the coronavirus pandemic. AISL said in a position paper to the PPA board on Oct. 8 the imposition of the arrastre charge on empty containers at the Manila and Batangas ports meant international shipping lines would have to pay an estimated additional cost of P5.4 billion, based on the 2019 container volume data. “Shipping lines have to recover the additional cost otherwise the option left to them is to reduce capacity in order to remain efficient. Hence, the need to pass on the estimated cost increase of P5.4B to customers becomes the viable option,” AISL told the PPA board. AISL said passing the additional cost to customers could “further increase the cost of freight and logistics to the detriment, in particular, of small and medium-size enterprises.” It said this could also adversely affect the country’s competitive edge in the shipping industry compared to Southeast Asian neighbors. AISL said the Philippines already ranks highest in terms of handling costs for 20-footer and 40-footer containers among Southeast Asian countries, including Singapore. “[That is why] applying arrastre on empties will only add to the over-all cost for lines servicing the Philippines, and further skew comparison w....

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