More suggestions to boost shipping industry

With two recent columns dedicated to the shipping industry, one of our readers wrote some suggestions to how the shipping industry may further be developed. Bobby Tordesillas listed 10 pointers, which we are sharing with other readers:

“1. Have all imported vessels and all local new buildings classed not necessarily by international class societies. A reliable local class society can be acceptable. Most local new building landing craft tanks, barges, tugs, and ferries are at present non-class.

“2. Give owners with overage vessels a deadline to replace their vessels with classed vessels. What is overage depends on the type of vessel. Thereafter, a maximum age is set for each type of vessel. In line with this, develop the ship-breaking industry for the scrapping of these overage vessels, but always in accordance with environmental laws.

“3. Have only one local class and develop this into international standards. A joint venture with an IACS (International Association of Classification Societies) class may be advisable, which is what Vietnam and Indonesia are now doing. Give incentives to owners to have their vessels classed with the local class by offering lower taxes and subsidizing insurance premiums. Local class will be much cheaper and affordable than IACS class members so it will not be burdensome to ship owners.

“4. Develop the local shipbuilding industry and local ship repair yards into international standards by requiring the yards’ slipways, facilities, welders and other laborers to be accredited by class. Most of our small local shipyards are not accredited by class.

“5. Give incentives to exporters and importers to fully control the shipping aspect of the trade by exporting CNF (Cost and Freight) and importing FOB (Freight on Board). This will go a long way to developing the overseas shipping segment of our shipping industry which has already long deteriorated. Most overseas ship owners have closed down or have become manning agencies over the past decades. Maybe for a start, require those registered with the BOI (Board of Investments) to control the shipping side. Require in-depth study of shipping to be included in international trade subjects.

“6. Rationalize financing policies of DBP (Development Bank of the Philippines) and NDC (National Development Corp.) in terms of both interest rates, terms of payment, and collateral coverage.

“7. Study the feasibility of giving incentives to local ship owners but make sure this is not done to compensate for the inefficiencies of some ship owners. Most countries, even the USA, do give incentives to the shipping industry. The benefits to society may outweigh the cost.

“8. Expand and upgrade the coastguard capability by increasing the number and speed of patrol boats. This would be good both for controlling smuggling and running after unseaworthy vessels.

“9. Give incentives to ship owners to give their executives a chance to study abroad and learn the state of the art of ship management, shipbuilding and even dry-docking.

“10. Assess the quality of training that maritime schools are giving and the standards for passing the board. Shut down those that are below standards. Be strict in renewing licenses of officers of vessels.

Bobby further states: “I agree with the Filipino Shipowners Association. That is No. 5 suggestion in my 10 steps to develop the Shipping Industry. We used to do that when I was the vice president of marketing at National Shipping Corp. of the Philippines. But since then, several Filipino overseas shipping companies have closed shop. There are only a few flag carriers remaining like Eastern Shipping and Westwind or Baliwag Navigation and Loadstar Shipping. And their vessels don’t ply outside Far East. Compare this to Vietnam which now has countless shipping lines trading overseas including outside Asia.

“This has been my frustration even while I was in NSCP, and could not understand why our importers and exporters easily let go the shipping side to their counterparts abroad. This is why I wrote the book, Containerized Liner Shipping, A Handbook for Exporters/Importers to teach our traders how easy it is to take control of shipping.

“If shipping is controlled in the Philippines, then it will be easier to purchase ships. A long term contract in the form of contract of affreightment and/or time-charter can be signed with shippers, and this will serve as the base cargo or backbone for purchasing a ship.”

It would be interesting to know how our presidentiables view the domestic shipping industry situation. –Rey Gamboa (The Philippine Star)