Local shipping industry losing ‘billions of pesos’

·3 min read

THE local shipping operators are asking for government’s assistance amid the lingering effects of the Covid-19 pandemic on the shipping industry.

Philippine Coastwise Shipping Association Inc. (PCSA) chairman Lucio Lim said the local shipping industry has been losing billions of pesos since the outbreak last year, paralyzing both passenger and cargo volumes.

“Our shipping industry especially those that are into the passenger business are really affected. In the case of roll-on roll-off vessels they earn about 40 percent of their revenues from passengers and now they can’t even have five percent of that,” said Lim in a virtual interview.

“We are hoping that this summer this should pick up because another year of this (situation) would be very difficult for the industry to recover,” he noted.

Cargoes are the ones sustaining the shipping business for now, but its movement has been down by 10 to 20 percent from pre-Covid performance.

Left on their own

Lim said the shipping players have been left to survive on their own amid the onslaught of the pandemic.

“There has been practically no support that was given to the shipping sector,” said Lim, adding that if there was, it was “only little” and not enough to provide relief for the entire industry.

Under Bayanihan II, some P9.5 billion was set aside for the recovery programs of the Department of Transportation. Of that total, P2.6 billion was set aside for assistance to the transportation industry.

The aid is applicable to all Philippine-registered ships operating in the domestic trade and calling at government ports under the jurisdiction of the Philippine Ports Authority (PPA), according to Memorandum Circular 42 issued by PPA general manager Jay Daniel Santiago on Nov. 26, 2020.

“The funds that DoTr shall transfer to PPA are not in the form of subsidy to PPA’s operations but correspond to DoTr’s budget under Bayanihan Act II in the amount of P250 million, which shall be treated as financial assistance to be utilized in subsidizing the fees being collected from domestic shipping owners, specifically, dockage (domestic) and lay-up fee (domestic),” according to the circular.

Of this amount, the PCSA said the Cebu Port Authority extended P25 million which is only good for a limited period of time.

“During this crisis, many of our vessels have been laid up. Some of our big passenger vessels, we chose to just let them be idled on berths. So, we asked the PPA and CPA to give us free parking, similar to what the airlines got,” Lim said.

“In the case of the shipping industry, they limited it only to that amount, P240 million nationwide, when there are more ships than planes,” he added.

Besides the free parking, the group also asked the government to waive the annual tonnage fees, which the Maritime Industry Authority is currently studying. They also seek an extension for free dry-docking since most vessels were not utilized.

“Our government requires us to dry dock vessels every two years, and because currently many of our vessels are on standby, they shouldn’t be strict about this,” said Lim.

Outlook

But amid the challenging environment, the local shipping industry is anticipating full recovery early next year, but this will depend on the rollout of the vaccination and the containment of the delta variant cases in the country.

“We are hoping for a turnaround next year,” said Lim.

The PCSA is composed of members formerly from the Philippine Roll-On Roll-Off Operators Association, Visayan Association of Ferry Boat and Coastwise Shipowners Operators and United Trampers Association of the Philippines.

The group is the largest shipping association in the Philippines and the biggest in terms of total gross tonnage of ships combined. It represents 50 members with more than 600 vessels from small to medium in size. (KOC)

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