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Exporters warns of losses due to shortage of vessels

Garment and furniture exporters expressed concerns over shipment delays and rising freight rates amid the global supply chain squeeze.

Robert Young, Philippine Exporters Confederation Inc. trustee for the textile sector and president of the Foreign Buyers Association of the Philippines, said the garment industry was incurring millions of dollars in losses because of the supply chain squeeze.

“The issue of vessel space availability is a huge one for us and our clients. Delay is between two weeks to almost two months. We are seasonal holiday-heavy and [it is] very critical that goods move on time as they have a short selling period,” Young said.

The space issue creates a domino effect that aggravates delays in shipment, one garment company said. Garment stakeholders said if they could not move the goods, then they would not be paid.

Other issues ailing the garment industry are the slow release of permits and import license, rising cost of natural materials and shortage of raw materials. These add to manufacturing costs and lead to continuing loss of the local business to Vietnam and Indonesia.

Meanwhile, furniture exporters asked the Chamber of Furniture Industries of the Philippines to help them find slots on vessels and address soaring freight rates.

One shipper said the cost of freight rose from around $4,000 per 40-foot container to $12,000, making their products uncompetitive.

“We hope that we can resol1ve this soon as the worst is yet to come,” the exporter said, referring to the approaching peak shipping season. The third-quarter and fourth-quarter surge of exports might be a nightmare with this setup, he said.

PhilExport president Sergio Ortiz-Luis, Jr. earlier said while this is a global issue that might be beyond anyone’s control, the government and private sector should work closely together to effectively address the logistics constraints.

The group reported last week the difficulties encountered by food exporters in getting their shipments on international shipping lines to customers overseas.

The Export Development Council-Networking Committee on Transport and Logistics held an online discussion recently with the Maritime Industry Authority, PhilExport and domestic ship owners on the unavailability of vessel space.

Among the recommendations is to encourage domestic ship owners to operate within the region to expand vessel capacity.

PhilExport said it would conduct a poll among member exporters to identify the routes where domestic vessels could focus their operations.

These priority routes are those that have sufficient volumes to and from the Philippines so local ship owners will see the viability of taking the risk to launch new services.

Topics: Robert Young , Philippine Exporters Confederation Inc , Foreign Buyers Association of the Philippines , Chamber of Furniture
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