Operators of container depots expect lacklustre operations through the first quarter of 2015 if the problem of Manila port congestion remains unresolved.
Container Depot Association of the Philippines (CDAP) president Carl Fontanilla told PortCalls in an email that ever since the Manila truck ban was implemented in late February, most depots have experienced slow container turnaround resulting in yard congestion.
Fontanilla noted a “container movement imbalance wherein container pullout was overshadowed by container return.
“Moreover, empty container evacuation or repositioning of shipping lines to their intended vessel has been greatly affected as trucks can only make one trip a day,” he added.
The current yard utilization of all CDAP members is over 100% compared with 70% to 80% during the pre-truck ban, Fontanilla said. Empty containers are now staying in CYs for 60 to 90 days versus the 15 to 30 days before the truck ban, according to him.
Ordinarily, empty containers are allowed to stay within the country for only 150 days.
The CDAP chief noted that depot operators are “now absorbing the cost of the double-handling” of empty containers.
“In our effort to accommodate empty return, we are constrained to mix up the storage of the container of one client with that of another client, which often results in an extra lift,” Fontanilla explained.
“The container yard business normally earns more from container handling or what we call the lift-on lift-off (LoLo) charges,” he pointed out. This means that if container turnaround is fast, then business is “healthy” for yards.
“However, with our current situation and since shipping lines are having difficulty evacuating their containers, most of their boxes are just sitting idle at our CY,” he said.
Hence, the income of depots “is also affected because storage charges are not that much compared to the handling or lift-on lift-off charges.”
On the anticipated influx of cargo with the arrival of the peak season, Fontanilla said, “Since we don’t have any area for adjustment as there is really no vacant lot within Metro Manila, we have already notified all our shipping line clients about the maximum TEU (twenty-foot equivalent unit) allocation that we can accommodate or extend to them.”
He added that some CDAP members have already put up CY branches in Cavite, Batangas, Cabuyao in Laguna, and Plaridel in Bulacan.
Fontanilla said the group expects container volumes to continue to increase even beyond the fourth quarter of 2014, but “revenue is not that promising for us off-dock depot operators.”
He said, “As long as the port congestion will remain unresolved, we will also bear the brunt,” adding that CDAP “cannot foresee any improvement in our operations until end of the first quarter of 2015.” – Roumina Pablo
Image courtesy of potowizard at FreeDigitalPhotos.net
