The Philippine Exporters Confederation warned over the weekend about the declining numbers of ship calls to the Philippines, saying these may delay the delivery of goods and affect exports and imports.
Philexport president Sergio Ortiz-Luis said while export numbers were increasing based on the report of the Philippine Statistics Authority, the numbers could be deceiving if taken at face value.
“There is this ongoing lack of shipping services. The backlog is increasing, as we speak,” he said.
Ortiz-Luis said the lack of ships going to the Philippines was part of the slowing of global maritime movement amid the pandemic. Shipping companies limited the dispatch of ships for several reasons relating to pandemic, including the surges in some countries and health concerns of the crew.
Ortiz-Luis said the situation was worse than port congestion and that it was beyond the control of Philippine authorities.
“We can charter ships if there is an urgent need, but this will be very expensive. We expect rates to quadruple or even quintuple. The lowest rate we’re expecting would be triple the regular rates. If you happen to get a booking, they require advance payments,” he said.
PhilExport expressed concern over the plight of exporters especially the micro-, small- and medium enterprises.
It said a lot of exporters would be affected from the shipment of raw materials to the export of finished goods.
Ortiz-Luis said many exporters already stopped accepting supply from local farmers because of the unreliability of ship calls.
PhilExport said not only US-bound and UK-bound shipments were affected, as almost all countries with sea trade connection to the Philippines suffered from the same difficulties.
Ortiz-Luis said his group was in talks with the Maritime Industry Authority for assistance.
Garment and furniture exporters earlier 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 were the slow release of permits and import license, rising cost of natural materials and shortage of raw materials. These added to manufacturing costs and led 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.