Local leaders in Manila have defended new rules that restrict access of heavy vehicles to the capital's streets, saying the scheme will encourage smoother movements of cargo once shippers adapt to the requirements. However, opponents of the ban say it will slow trade activity, jeopardizing future economic growth, reported BusinessWorld.
The restrictions, introduced in late February, block access to city streets 5:00-10:00 a.m. and 3:00-9:00 p.m. for eight-wheeler trucks and other vehicles with a gross weight of more than 4,500 kg. There are some exceptions, including vehicles carrying perishable goods and petroleum products, and those serving government projects.
The mid-day window, a temporary concession granted by the Manila administration to allow shipping companies time to adapt, is set to be closed within six to eight months.
According to Manila Mayor Joseph Estrada the ban will ease traffic congestion in the city, reduce pollution and cut down on damage to transport infrastructure. While the decision has met with strong opposition, Estrada said he would not back down from the position taken by his administration.
The shipping industry, meanwhile, claims the restrictions- which will affect truck access to the Port of Manila-will generate transportation bottlenecks, potentially leading to a shortage of finished goods and inputs for manufacturers, as well as delays in exports.
To make up for the reduction in working hours, some trucking lines have already imposed additional fees, including congestion charges, and pushed up their rates. In late March, the Confederation of Truckers Association of the Philippines announced its members were raising rates by 50 percent.
However, the greater cost of the reduction in truck capacity may well be short-term supply shortages, according to Christian Gonzalez, the Asia regional head for International Container Terminal Services, which runs the Manila International Container Terminal. While businesses that rely on imports could look for solutions-such as holding more stock in inventory-any adjustments will necessarily generate additional costs, he said.
The ban may have a negative impact on outbound traffic as well. In a study published by Citi Research on March 7, economist Jun Trinidad said there could be a significant loss to the economy if the restrictions were to stay in place without an alternative route to connect the Port of Manila to the economic zones of Cavite, Laguna, Batangas, Rizal and Quezon (Calabarzon). If the new rules cause export delays that persist, he wrote, this could jeopardise production and jobs in Calabarzon, reducing GDP by one to five percent.
In dollar terms, this amounts to $1.4 billion-$7.1 billion, compared with the gain from the reduction of traffic, which Trinidad said stands at $664.5 million, based on an analysis by the Japan International Cooperation Agency.
Responding to complaints from shippers on March 18, Public Works Secretary Rogelio Singson told an economic briefing that those all along the logistics chain will need to adapt to the new schedule and make the best use of the times available to them.
"The window should be sufficient. Unfortunately, we still need to get all the stakeholders like the port operators, the Philippine Port Authority and container yards to cooperate in the sense that they should be open in the evening during the window," Singson said.
Any longer-term solution may well involve increased use of the other large transhipment centres that serve the city and the surrounding area, such as the Batangas and Subic ports.
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