Rashid Alexander Delgado, President, Transnational Diversified Group: Interview

Interview: Rashid Alexander Delgado

What support infrastructure should be prioritised to mitigate disruptions to the trade supply chain in Metro Manila and ports across the archipelago?

RASHID ALEXANDER DELGADO: Over the past few years, the shipping and logistics industry has faced some unique challenges that have encouraged key players to develop new alternatives and seek more opportunities, as in the case of truck ban and subsequent port congestion in the City of Manila during 2014. Whereas the Port of Manila itself operates efficiently, the infrastructure leading in and out of the port is already at full capacity. Disruptions to trade flow add to the strain of getting cargo from the port efficiently. The whole industry, however, has worked together to address the congestion issue by looking at alternative ports, namely Subic in the north and Batangas in the south, as well as alternative multimodal transport systems.

Alternative ports can alleviate congestion with proper planning, so that locators in the south and north can adjust to utilise their respective ports more efficiently. The Port of Manila will continue to be the country’s main gateway for cargo; however, long-term planning would enable alternative ports to extend services to their catchment areas and companies to modify their supply chain so as to bypass Manila. Although trucking costs are higher in Subic and Batangas, spending time getting in and out of a congested port adds to costs. Additionally, the trucking industry will need to be more efficient and invest in technology to complement the port operators’ investments in truck management and IT systems. Additional developments include the Laguna Gateway Inland Container Terminal, established to alleviate container overcapacity at the Port of Manila.

In the longer term, the government needs to improve the existing road network as well as look at alternative modes of transport, including rail infrastructure to link Manila with the south of the country, where a lot of manufacturing output originates.

How has the signature of the Foreign Ships Co-Loading Act impacted domestic shipping lines, readiness of ports and logistics costs?

DELGADO: The passage of the act was a move forward for the current administration’s thrust at enhancing competitiveness in shipping, and was a concrete response to port congestion issues. In the past, domestic shipping lines had sole rights to the transport of goods between the archipelago’s islands, with foreign ships only allowed to load at the Port of Manila. This was not cost-effective. For instance, in the past, cargo destined for Cebu had to go through Manila first, whereas now the foreign shipping line would be able to call in Cebu directly, reducing costs. However, domestic shipping lines will need to urgently modernise their fleet and shipping operations to compete with their foreign counterparts.

Furthermore, capacity of port infrastructure would need to be expanded. Aside from Manila, Batangas, Subic and Cagayan de Oro, only the Davao port in Mindanao is able to handle big ships, with even the Cebu port having draught limitations which would prevent it from receiving some larger vessels.

How can the Philippines ensure the global competitiveness and high standards of maritime safety among its seafaring workforce?

DELGADO: The Philippines is recognised as the number one provider of seafarers to the world’s merchant marine fleet. The government has taken concrete steps to raise the standards and governance of its maritime industry to international levels.

Foreign shipowners, particularly from Japan, are also active in making investments in state-of-the-art training equipment and facilities to develop the technical and behavioural skills of Filipino seafarers. Thankfully, right now there is a concerted tripartite effort from government, private industry associations and seafarers’ unions to meet this common goal.