Manila backlogs mount up

Mayor Joseph Estrada enforced a ban in February to stop trucks and other vehicles weighing over 4,500kg from entering and traversing the city between 5:00am and 9:00pm, meaning daily truck trips to Manila’s two major ports have fallen, and bottlenecks risen.

The impact can be best seen at the Manila port facility run by International Container Terminal Services Inc (ICTSI), which handles around 65% of the country’s cargo.

Already operating at 90% of its capacity, which the company says is unusual for this time of year, the facility has seen incoming cargo boxes linger for an average of 10 days – up from the usual six.

Christian Gonzalez, ICTSI’s regional head, told Port Strategy: “We are fortunately eliminating the backlog with the assistance of the lines and this current moratorium on the truck ban will further accelerate this.”

“What has caused truck-related traffic on the city streets in the past was not actually the flow of trade but rather the parking of trucks,” he explained. “The solution to the problem then is simple: Ban truck parking and spread the flow of trucks across a 24 hour period.

Mr Gonzalez said this will give much needed relief to the city in the coming years while the port connector highways are being built – something which the government has been slacking on.

“The national government, which has relied on private investment on the waterfront for years, has not put in the corresponding investments in roads. There is a myth that Batangas Port (with a capacity of 300,000 teu) can take the load off Manila but this just isn’t possible with Manila having more than 3.8 million teu (import and export) passing through superior facilities,” he added.

But it’s not just the city that’s cracking under the pressure. In a statement released last week, the European Chamber of Commerce of the Philippines said the whole country is being affected: “Despite the fact that facilities are being developed to handle substantially more cargo, this truck ban is effectively reducing the country’s growth potential and is damaging the economy.

According to the Bureau of Customs, the ban led to a 1.4% drop in Philippine exports, which account for around 30% of the economy, in February. The agency also missed its collection target of 30.2bn pesos (US$691.1m) for the month by 9%.

“Drastic and unsustainable operating decisions may have to be taken to further mitigate the impact of the truck ban and keep cargo moving,” the Chamber added.

These may include limiting or refusing the acceptance of some types of containers, implementing penalties, and barring any cargo that does not meet the strict deadlines that will have to be put in place.

But, the Chamber said despite this, “no measures will be good enough to limit the mid to long-term effects of this ban on the economy” as the peak season approaches.