The problems with Manila and Jakarta ports


The port infrastructure in Southeast Asia is not evenly developed and this will be a problem if the much vaunted Asean Economic Community (AEC) is to come into effect by next year as planned.

The two worst affected ports among the major Asean nations are the Port of Manila in the Philippines and Indonesia’s main gateway, the Port of Tanjung Priok in Jakarta.

They are lagging the rest of the region for various reasons but the end result, respectively, has been longer turnaround times for ships and longer dwelling times resulting higher logistics costs for shippers. While Manila’s problems seem to be from outside the port, Jakarta’s issues come from within the port infrastructure, or lack thereof.

The Philippines’ main island of Luzon is ostensibly served by two main ports at Batangas to the south of Manila and the main Port of Manila in the heart of the city and the main economic area.

The city of Manila however is notorious for its traffic congestion and the solution devised by the city’s administration has been to extend the hours of a longstanding ban on trucks using the streets. Since earlier this year, container trucks have been banned from using Manila’s streets from 5am to 9pm extending the usual ban which ran only from 5am to 10am and 5pm to 9pm.

Philippine Ports Authority (PPA) general manager Juan Sta Ana was quoted as saying that the full effect of the truck ban will largely be felt in the second quarter of the year. He claimed that the longer turnaround times at the port have prompted a number of vessels to stop calling with ship calls declining 5% to 82,946 calls compared to 87,321 calls in the previous corresponding period.

Manila’s problem seems to be a lack of understanding or unwillingness to accept the root of the problem. Blame has been put on container trucks from the port for clogging up the streets and the proposed solution has been to divert container volumes to Batangas Port.

This however illustrates a lack of understanding of the situation. “The issue is more about road congestion than port congestion,” port operator Asian Terminals Inc (ATI) executive vice-president Andrew Hoad told Seatrade Asia Week. “There is a fundamental lack of road infrastructure investment in Manila city as a whole,” he added.

Hoad cited an ATI study which found that container trucks servicing Manila ports barely make up half the traffic volume in the vicinity, with private cars and jeepneys contributing the most to the jams.

Another major source of road congestion in the port area he noted is the long queues of trucks waiting to enter the port. This is caused by the lack of a vehicle booking system which leads truckers to simply join the queue in the hope of getting in while their agents arrange for cargo inside the port.

This is highly inefficient and can be easily solved by implementing a vehicle booking system which will link brokers and consignees through a centralised system. Truckers that show up without a booking will be turned away and penalized.

The problem is further confused by some officials suggesting that the currently underutilized Batangas Port could help take some of the container volume from Manila. This reflects a lack of understanding of the market’s dynamics, Hoad said. The Greater Manila area is the Philippines’ economic centre and of the 2m teu going into Manila Port 1.6m to 1.7m teu is delivered to consignees within a 20km radius.

While some of these volumes can be diverted to Batangas if they are bound for the Calabarzon region to the south, the two ports are essentially serving two different markets. Batangas Port, where ATI also has a container terminal, has plenty of spare capacity and volumes have been steadily improving over the past 18 months, Hoad added.

In Indonesia meanwhile, the main problem with the ports is the long dwelling times and high logistics costs. At an average of 6.4 days, the time taken to clear a container from the time it is unloaded in Tanjung Priok, is one of the longest in the region.

Indonesian National Shipowners Association (INSA) chairman Carmelita Hartoto was quoted in local media as saying the high fees at ports, poor facilities and illegal fees kept overall logistics costs high. INSA data shows that just on domestic routes alone, some 50% of shipping costs are for port tariffs.

While the problem of attracting more mainline calls with deeper ports and more terminals will be solved to some extent with the completion of the Kalibaru Port scheduled for next year, high charges within the ports themselves look set to stay.

Source from : Seatrade Global