The Philippine supply chain community is closely watching the impending Joint Administrative Order (JAO) to curb exorbitant destination charges by international shipping lines and ease chronic container yard congestion. In logistics circles, customs brokers, truckers, and shippers often ask a fair and practical question: Why wait for an inter-agency JAO when the Bureau of Customs (BOC) already issued Customs Memorandum Order (CMO) No. 13-2019 to address empty container returns and port congestion, particularly at Manila ports?
The short answer comes down to legal reach and institutional jurisdiction. CMO 13-2019 was an operational stopgap born of an acute port crisis; systemic trade distortions, however, require a comprehensive, multi-agency statutory instrument.
The Structural Limits of CMO 13-2019
Promulgated in early 2019, CMO 13-2019 implemented bold, direct interventions. It restricted empty-box drop-offs at Manila ports without a Special Permit to Load, required shipping lines to absorb diversion and storage costs when directing trucks to alternative off-dock depots, prohibited detention charges during severe yard shortages, and invoked Section 1129 of the Customs Modernization and Tariff Act (CMTA) to seize and forfeit empty containers that remained unexported after 90 days.
Despite its robust intentions, enforcement soon encountered rigid administrative and jurisdictional barriers:
- Regulatory Supersession: The subsequent issuance of CAO 08-2019 overhauled the admission, movement, dwell-time standards, and disposition mechanics for foreign containers, effectively diluting CMO 13-2019’s standalone authority.
- Jurisdictional Boundaries: The BOC’s statutory powers under the CMTA focus primarily on border security, customs clearance, revenue assessment, and trade facilitation. Unilaterally policing private maritime freight pricing, capping commercial line charges, or regulating off-dock yard commercial arrangements pushed the limits of the Bureau’s legal mandate. Carriers challenged and skirted these provisions, leaving detention disputes fundamentally unresolved.
- Enforcement Gaps: Directing organic customs personnel to monitor every private depot proved logistically unsustainable without an integrated, automated container-tracking ecosystem.
What the Proposed JAO Specifically Focuses On
Unlike previous piecemeal issuances, the draft JAO establishes the BOC as the lead coordinating agency while explicitly backing its authority with the collective mandates of the Department of Finance (DOF), Department of Trade and Industry (DTI), and Department of Transportation (DOTr). This collaborative design tackles the root commercial causes that a standalone customs memo could never legally reach:
- Fee Transparency and Ceiling Oversight: Foreign shipping lines must disclose all local fees and submit detailed justifications. The BOC is empowered to standardize fee nomenclatures across the industry, set charge ceilings, and actively reject, reduce, or roll back unjustifiable fee increases.
- Depot Assignment and Detention Protections: Shipping lines are prohibited from billing detention or demurrage when delays result from carrier failure, such as failing to acknowledge a return booking within 24 hours or failing to designate an open depot within 48 hours. If a designated yard rejects a container due to space constraints, the BOC can designate an alternative depot, and the carrier is billed for all transfer costs.
- Prohibition of Retaliatory Liens: Carriers will be legally prohibited from holding cargo hostage or refusing delivery orders for contested demurrage or detention charges tied to entirely separate transactions.
- Container Deposit Overhaul: Demanded deposits must be refunded within a strict 15-day window from the date of the empty return receipt, and deposits are barred outright if the importer secures an approved alternative guarantee or credit mechanism.
- Yard Thresholds and Digital Sweepers: The order sets hard triggers that require moving laden containers when yard utilization rises 5% above baseline thresholds for two consecutive weeks, sanctions carriers that exceed yard allocations by more than 30% without mobilizing sweeper vessels, and integrates digital tracking across the container lifecycle.
The Imperfect Yet Necessary Mandate
To be candid, the proposed JAO may not be perfect. In a multifaceted ecosystem of international carriers, domestic port operators, off-dock yards, haulers, customs brokers, and importers, no single policy will fully satisfy every stakeholder. Certain provisions will inevitably run counter to specific commercial interests, and individual sectors may feel their standalone proposals were compromised.
Yet relying on outdated customs orders would merely revive past jurisdictional impasses while leaving predatory destination surcharges and depot abuses intact. The JAO is not an administrative panacea, but it is precisely the unified statutory mandate our supply chain needs, bringing all regulatory arms together to hold every stakeholder accountable under a single, enforceable rule of law.
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