Exporters lament worsening logistics constraints

(The Philippine Star), 30 May 2021

MANILA, Philippines — Exporters are seeking “very urgent” assistance to cope with worsening supply chain and logistics issues, including lack of vessel space, soaring freight rates and container shortage resulting in shipment delays and huge losses.

In a series of emails furnished the Philippine Exporters Confederation Inc. (Philexport), exporters lamented the increasing difficulties in getting their shipments on board international shipping lines to their customers overseas.

In a statement, Philexport president Sergio Ortiz-Luis Jr. said while this is a global issue that may be beyond anyone’s control, he said the government and private sector must still work closely together to find ways to effectively address the logistics constraints.

“The logistics problem of our exporters has been worsening and appears much deeper than what has come to our attention,” he noted. This includes non-availability of shipping space; exorbitant shipping costs, and long waiting time, even as market demand continues to improve especially for domestic food exports.

He emphasized the urgency of addressing this problem now “before it morphs into a crisis worse than the recurring port congestion and a further hindrance to recovery and employment.”

A Philippine food and beverage company described the hardships in securing vessel space on ships, noting there are “lots of stocks in our warehouse… wherein before once we produce we can load in one to two days. Stocks are ageing in warehouse as it now takes one to two plus months before we can ship out. Customers can’t re-order due to the stocks they previously ordered have not been shipped out.”

Moreover, it said “freight rates are too high,” and are almost triple or quadruple the usual rates especially to the US, and securing vessel space is difficult going to the US, Middle East and Canada.

Another exporter said Philippine cargoes are at a big disadvantage and are “not getting priority” and being “shut out/bumped off from whatever available space,” while freight costs have soared because of the tight market.

What is sad, he added, is there is now market demand, especially for food and furniture and other products since major markets have reopened, “but we are still constrained by supply chain and logistics issues.”

Logistics hurdles are not just confined to US-bound exports. Philexport also received a report from a fresh fruit exporter whose shipping cost has increased three times to $12,000 per 20-foot container to the UK.

To address vessel space and container shortages, Export Development Council (EDC) Networking Committee on Transportation and Logistics chairman Enrico Basilio urged the Maritime Industry Authority (MARINA) to encourage a few of the domestic shipping lines to operate regionally.

He also called for support for bareboat chartering by the Filipino Shipowners Association (FSA). He said FSA can charter ships staffed with Filipino seafarers that can be operated as a Philippine flag.

The affected exporters, for their part, are seeking dialogues and discussions with industry players and relevant government agencies to find the way forward with their concerns.