DTI credits DOTr
orders to address high shipping costs
DTI-Office of the
June 28, 2020
MAKATI CITY –
Department of Trade and Industry (DTI) Secretary Ramon Lopez
credited and supported the initiatives taken by Department of
Transportation (DOTr) Secretary Arthur Tugade to address mounting
complaints against unreasonable shipping charges. This, following
the transportation department’s issuance of multiple Department
Orders to bring down the cost of shipping and provide redress on
complaints against shipping lines.
Sec. Tugade issued an
order creating the Shippers Protection Office (SPO) to assist
shippers that have been assessed unreasonable fees and charges by
shipping lines. Under Department Order 2020-008, the SPO is
authorized to accept complaints pertaining to rates, charges,
practices, and operations of international and domestic shipping
“The creation of such an
office is very important as importers, exporters, forwarders, and
brokers will now have a venue to ventilate complaints against
shipping lines charging exorbitant and unreasonable fees,” said DTI
“The intervention of DOTr
in addressing this issue could not have come at a better time,
considering that this has been a recurring problem for shippers,
which affects the general cost of goods and has further aggravated
the economic difficulties that all businesses have been experiencing
due to the pandemic,” Sec. Lopez said.
“At the end of the day,
it’s consumers who will bear the burden of these high costs in terms
of higher prices of final products. Shippers may file their
complaints directly at the SPO,” the trade chief added.
Further, Sec. Lopez cited
Executive Secretary Salvador Medialdea for his leadership in finding
all possible solutions to the high shipping charges. Other agencies
cited were the departments of Finance (DOF), Agriculture (DA), as
well as the Philippine Ports Authority (PPA), Bureau of Customs (BOC),
and the Maritime Industry Authority (MARINA) for helping to address
issues to make logistics in the country more efficient and to reduce
logistics cost, especially during the pandemic.
Sec. Tugade also issued
Department Order 2020-009 prescribing a minimum free time period of
eight (8) days for cargoes unloaded by international shipping lines.
The eight-day period extends the period of five (5) days currently
granted by shipping lines before collecting demurrage charges on
containers. This again is a very welcome intervention in lowering
the overall charges applied to shippers and consignees.
Studies have shown that
the five-day free time period granted by shipping lines to Filipino
importers is one of the shortest free time periods in Asia. The
eight-day free time period aligns the free time period granted by
many shipping lines to importers in other countries.
Moreover, under the
government's policy of ensuring adequate supply of food at
affordable prices, Sec. Tugade also issued Department Order 2020-007
directing all domestic shipping lines to allocate cargo space and
provide preferential rates for agricultural and food products.
The order enjoins all
domestic shipping lines to allocate no less than 12% of a vessel’s
cargo capacity per voyage exclusively for agriculture and food
products and provide a discount of 40% of published rates for
cargoes of said products. The said order is also expected to benefit
farmers by way of boosting demand for locally produced agricultural
products. It will likewise help ensure the unhampered movement of
said products across the country.
“The longer free time of
minimum of eight days prescribed under DO 2020-009 is expected to
minimize, if not eliminate, demurrage charges to be incurred by
consignees on imported products,” Sec. Lopez explained.
He also pointed out that
importers that are able to release their shipments within eight days
no longer have to pay demurrage charges.
agriculture and food products, the allocation of a vessel’s cargo
capacity and provision of discounted rates as provided under DOTr’s
order can lead to increased competitiveness and demand for such
products. This will contribute to the viability of domestic food
production, as well as help sustain the government's efforts to
attain food security for the country.
“These initiatives are
expected to help stabilize prices of many basic commodities, which
will ultimately redound to the benefit of Filipino consumers.
Secretary Tugade deserves to be commended for taking concrete
actions to resolve the issue of high shipping costs,” added Sec.