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Prices of consumer goods could spike in the short-term as manufacturers and distributors spend more for logistics costs due to the continued congestion at Manila ports
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Today (Feb 10), the yard utilization for reefers at the Manila International Container Port was at 96.37% from yesterday’s 103.3% while overall yard utilization was at 83.54% from 82.3% yesterday
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Brokerage firm Wealth Securities said the logjam could affect not just availability of goods in shops but consumers may ultimately shoulder the added costs
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Matthew Sy-Tan, Wealth Securities analyst on Container Terminal Services and Aviation, said these factors “may lead to a further spike in inflation”
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Large importers that may be affected by the high yard utilization include supermarket operators, diversified fastfood chain giants, and major food manufacturers
Prices of consumer goods could spike in the short-term as manufacturers and distributors spend more for logistics costs due to the continued congestion at Manila ports.
Today (Feb 10), the yard utilization for reefers at the Manila International Container Terminal (MICT) was at 96.37% from yesterday’s 103.3% while overall yard utilization was at 83.54% from 82.3% yesterday. MICT is the country’s biggest port, handling about 70% of total container volume in the Philippines.
Port stakeholders have warned that the high yard utilization levels means delays and higher costs in the movement of containers that carry imported inputs, materials, and finished imported products.
The Association of International Shipping Lines attributed the situation to “a convergence of seasonal, operational, and logistical factors observed since mid-December of last year”. These factors include extended yuletide holidays that have led to delays in cargo withdrawals as well as seasonal impact of the Chinese New Year with production in many import sources significantly on slowdown due to the long holiday. Also cited as challenges were the unprecedented surge in reefer volumes, and constraints at off-dock container depots.
Wealth Securities, Inc., consistently ranked among the country’s top stock brokerage firms in terms of value turnover, said the current port situation could affect not just availability of goods but consumers may ultimately shoulder the added costs..
“The slower movement of goods will affect the supply of goods in stores while higher logistics costs may be passed on to consumers,” said Matthew Sy-Tan, Wealth Securities analyst on Container Terminal Services and Aviation.
“These factors may lead to a further spike in inflation,” he said in the February 2 issue of Daily Wealth Take, Wealth Securities’ advisory through commentary on economic and corporate events.
The country’s inflation rate in January stood at 2%, the fastest in almost a year and higher than the 1.8% recorded in December. The Philippine Statistics Authority, in its latest inflation report, attributed the acceleration mainly to an increase in housing rental rates, utilities, and fuel.
Sy-Tan said importing large companies that may be affected by the yard congestion include: supermarket operators Robinsons Retails Holding, Inc. and Puregold Price Club, Inc.; diversified fast food chain Jollibee Foods Corp.; and food manufacturers Universal Robina Corp. and Monde Nissin Corp., and Century Pacific Food, Inc.
“On the other hand, the high yard utilization rate should result in a temporary boost in ancillary revenues and margins for MICT,” he added. MICT operator International Container Terminal Services, Inc. (ICTSI) did not respond to PortCalls questions on impact of the logjam on revenues.
MICT is estimated to account for 18% of ICTSI’s total revenues, according to Wealth Securities.
