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Port users are urging the Bureau of Customs to suspend implementation of the Electronic Tracking of Containerized Cargo (E-TRACC) System on exports
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The Customs Bonded Warehouse Operators Confederation, Philippine Exporters Confederation, and Port Users Confederation of the Philippines are seeking a suspension pending review of the system
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The groups described the system as unnecessary and will cause delays and additional costs
Port users are seeking suspension of implementation of the Bureau of Customs (BOC) Electronic Tracking of Containerized Cargo (E-TRACC) System on exports, saying it is unnecessary and will cause delays and additional costs.
In separate letters to acting Customs Commissioner Yogi Filemon Ruiz respectively dated July 20 and July 21, the Customs Bonded Warehouse Operators Confederation Inc. (CBWOCI) and Philippine Exporters Confederation Inc. (Philexport) requested the suspension pending system review.
The Port Users Confederation of the Philippines Inc., which counts as members CBWOCI and Philexport, also wrote a letter to BOC on July 21 endorsing CBWOCI’s letter to Ruiz.
RELATED READ: BOC issues E-TRACC rules on import, export cargoes for CBWs
E-TRACC is a web-based system launched in 2020 to track inland movement of containerized cargoes during transit and transfer to other customs territories and facilities. The system allows BOC to track, monitor, and audit the location and condition of cargoes, as well as obtain real-time alarms on diversion and tampering of cargoes. BOC has been gradually implementing the system in various areas and collection districts.
Both CBWOCI and Philexport referred in particular to BOC Assessment and Operations Coordinating Group Memo No. 230-2022 dated July 14 which implements E-TRACC for customs bonded warehouse (CBW) imports and exports at the Manila International Container Port and Port of Manila.
Under the memo, E-TRACC was scheduled to be implemented for CBW imports and exports at the two ports last July 25.
Philexport said it acknowledges that BOC, consistent with the Customs Modernization and Tariff Act, is mandated to employ technology in implementing more streamlined customs functions.
“Unfortunately, in the process, the BOC may have overlooked certain details that make these new policies and systems redundant, costly and even more difficult to comply [with], contrary to the objective of easing the process and cost to doing business,” Philexport said.
The group said it deems “unnecessary and unreasonable” the implementation of E-TRACC for exports due to various reasons, one of these being that export cargoes are destined for specific markets and are not likely to be diverted.
Philexport said the system will result in additional time, causing delays in the delivery of shipments.
“There are factors beyond the exporters’ control because the E-TRACC device will still need manual installation and disarming,” it noted.
The group said additional time comes with higher costs, and delays can lead to shutouts, charges and penalties either at the port or by the shipping line.
CBWOCI, for its part, noted that the rationale for enforcing the system for imports is clear, as it aims to avert any possible diversion of imported raw materials coursed through bonded warehouses
The rationale for implementing E-TRACC for exports, on the other hand, “is not clear”, CBWOCI said.
It said that in contrast, export shipments are “not prone to diversion considering that an exporter who intends to export its products will not divert its export cargo to another destination other than its intended destination.”
CBWOCI also noted that procedures in “arming” or affixing the E-TRACC device, or the electronic customs seal (ECS), to the container are dependent on several factors that are beyond the control of exporters.
These factors include availability and timely delivery of the ECS, including its arming to the container, and possible delay in container delivery if the assigned customs personnel/warehouseman who will affix the ECS is late.
The ECS is a GPS-enabled sealing device or lock that secures a container and provides real-time location information.
Like Philexport, CBWOCI said any delays in the processing and delivery of export shipments is detrimental to the exporter. It added that finished goods that are not exported on time can be heavily penalized and/or face possible cancellation of export orders from their foreign buyers.
The group also claimed the number of assigned BOC personnel/warehousemen who do the arming of the ECS “is not sufficient to accommodate the volume of weekday and weekend exports of various manufacturers/exporters.”
The group said it would be impossible for the assigned warehousemen to install the ECS to various provincial locations where numerous exporters’ factories are situated. It added that export loadings are normally done late at night or in the wee hours to avoid truck bans.
Instead of BOC warehousemen arming the ECS, CBWOCI suggested the job be done by authorized personnel of manufacturers/exporters to eliminate delays and forgo the unnecessary additional cost in arming the ECS.
Moreover, CBWOCI said the additional expenditures in the implementation of the E-TRACC, including the service provider charge per ECS –P784 inclusive of value-added tax – and transportation and food representations of assigned BOC personnel/warehousemen are “unnecessary and could be avoided.”
“Please note that currently, exporters are already financially burdened considering the high cost of shipping freight and other costs relative to business. Overall, these additional and unnecessary costs may greatly affect the price competitiveness of the export products,” CBWOCI said.
Under Customs Memorandum Order (CMO) No. 04-2020, which implements the E-TRACC System, an ECS is required during the transfer of cargo to a container yard/container freight station or other customs facilities and warehouses; transit of cargo bound for free zones, inland customs offices, depots, or terminals; transit to CBWs; export of cargo from free zones, inland customs offices, depots or terminals, and CBWs to port of loading; and transfer of shipments subject to further verification or monitoring.
All container vans covered by CMO 04-2020 should be affixed with an ECS before being cleared to depart from the starting point or point of discharge for the voyage to the end point or point of destination.
Except when warranted under CMO 04-2020, customs cargo clearance must be fully completed before any shipment can be sealed with an ECS. – Roumina Pablo
