Customs duties and maritime transportation are the biggest contributors to expensive logistics costs for both imported and locally-produced goods in the Philippines, according to a study by an international advisory services company.
“In both international and domestic logistics, port and terminal charges comprise the smallest portion of the total logistics cost, while the highest cost is represented by customs clearance and maritime transportation expenses,” Pablo Corralo Llorente, Bluefocus Infrastructure advisor said in a paper titled “Analysis of Logistics Costs for Imported and Domestic Containers in the Philippines” presented during a forum in Makati on Monday.
The study showed that fees for Customs clearance processes contribute to 35 percent to 60 percent of the total cost, followed by maritime transportation, which includes shipping line freight rates and surcharges at 20 percent to 40 percent.
“Maritime transportation is costlier in the Philippines than in neighboring countries in Southeast Asia, with destination charges playing a larger role,” Llorente said.
Meanwhile, inland logistics represent 10 percent to 25 percent of the total logistic costs due to trucking and warehousing charges. Port and terminal charges at destination contribute only 5 percent to 10 percent, mostly due to terminal handling rates.
All in all, the average logistics cost for an imported container in the Philippines is $5,300 or around P311,372, representing a little over 10 percent of the stock value.
The same trend is seen in domestic logistics with maritime transportation and inland logistics costs at 45 percent to 50 percent, and port and terminal charges at only 6 percent to 8 percent.
Food-related products, such as processed goods and agricultural produce, make up the largest share (40 percent) of outbound containers from Manila. Other significant commodities include clothing and textiles, construction materials, and healthcare supplies, the study shows.
The study was commissioned by a large overseas manufacturer planning to invest in a high-volume production factory in the Philippines.