Shipping lines choose ports of call based on economies of scale
Source:hellenicshippingnews 2014-4-30 10:06:00
The Association of International Shipping Lines said freight contracts involving the choice of port such as Batangas or Subic are decided based on economies of scale, and not as a result of state policies.
A truck ban in the Port of Manila prompted several groups to look at the viability of Batangas or Subic as an alternative port. The Lina Group of Companies claimed truckers were losing at least 10 percent of their revenues from daily operations because of the extended tuck ban.
"Based on our estimates, trucking companies suffer a 10-percent decline in revenues because of the extended truck ban. And until all concerned parties have reconciled this issue, truckers will continue to lose unless they start imposing the necessary adjustments," Lina Group chairman Bert Lina said over the weekend.
AISL president Patrick Ronas said as freight deals were decided abroad, it was natural that economies of scale factored heavily in the decision-making of foreign principals.
He said premiums or the extra costs on operating in the ports of Batangas and Subic would disappear once the flow of trade took progress in those areas.
Ronas said the ports in Cebu, Davao and Cagayan de Oro were historically having a premium of $350 to $400 per cargo at the time that international feeders were non-existent in those ports, but eventually the cost was eliminated after these ports experienced growth in trade.
Foreign shippers have also done their part to ease the current problem of truckers who are being charged with penalties for illegal parking when they could not comply with the truck ban during the hours to traverse Manila to their container yards.