Mindanao Shippers Say New Law Stifling Trade

Manila Bulletin, September 9, 2004 | Go to article overview
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Mindanao Shippers Say New Law Stifling Trade


GENERAL SANTOS City The president of the Zamboanga City Shippers Association, Edgar Lim, claims that indiscriminate increases in freight costs by a domestic shipping cartel will limit the competitiveness of Mindanao products.

Under the provisions of Republic Act 9295, the Domestic Shipping Development Act of 2004, shipping companies are authorized to raise their rates by four times a year. This law, a license to kill economic development, will have a negative effect on the Presidents pro-growth, pro-job agenda.RA 9295s implementation, Lim stressed, will work against the best interest of Mindanao producers, growers, traders and ultimately, shippers themselves unless lawmakers repeal the law or, at least, amend the new laws antigrowth provisions.

Rate increases four times a year is unconscionable. How can shipping companies justify this to the general public? he said during the recently concluded 4th Mindanao Shippers Conference organized by the SOCSKSARGEN Shippers Association, Department of Trade and Industry and USAID-funded Growth with Equity in Mindanao (GEM) Program.

Quoting industry records, he said that shipping a twenty-footer container van from Zamboanga to Manila costs $535. On the other hand, despite the fact that the distance is greater, shipping the same cargo from Manila to Hong Kong only costs $250.

Lim also noted that despite government policies, competition among domestic shipping lines has not occurred. All companies charge almost similar rates regardless of the quality of their service. This cartelization undermines development and cripples free and fare trade initiatives of both the government and private sector.

To address the issue of uncontrolled freight increases, Lim proposed the deferment of the approval of RA 9295s Implementing Rules and Regulations (IRR) until such time that the law is amended by Congress.

At this point, we are not even asking the domestic shippers to lower their existing freight rates, just to simply stop their increases, Lim said.

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