In a series of emails furnished to the Philippine Exporters Confederation Inc. (PHILEXPORT), exporters lamented the increasing difficulties in getting their shipments on board international shipping lines to their customers overseas.
PHILEXPORT president Sergio Ortiz-Luis, Jr. said that while this is a global issue that may be beyond anyone’s control, he said the government and private sector must still work closely together to find ways to effectively address the logistics constraints.
“The logistics problem of our exporters has been worsening and appears much deeper than what has come to our attention,” noted one executive. This includes non-availability of shipping space; exorbitant shipping costs, and long waiting time, even as market demand continues to improve especially for domestic food exports.
The executive emphasized the urgency of addressing this problem now “before it morphs into a crisis worse than the recurring port congestion and a further hindrance to recovery and employment.”
A Philippine food and beverage company described the hardships in securing vessel space on ships, noting there are “lots of stocks in our warehouse… wherein before once we produce we can load in 1-2 day. Stocks are ageing in warehouse as it now takes 1 to 2+ months before we can ship out. Customers can’t re-order due to the stocks they previously ordered have not been shipped out.”
Moreover, it said “freight rates are too high,” and are almost triple or quadruple the usual rates especially to the US, and securing vessel space is difficult going to the US, Middle East and Canada.
“Sometimes it is also customers who advise to hold the shipment due to the high freight rates,” it added.
An exporter of marine products based in the Visayas echoed the observation, bewailing the shortage of available space aboard container vessels for Philippine cargoes bound for the US market.
The exporter said Philippine cargoes are at a big disadvantage and are “not getting priority” and being “shut out/bumped off from whatever available space,” while freight costs have soared because of the tight market.
What is sad, it added, is there is now market demand, especially for food and furniture and other products since major markets have reopened, “but we are still constrained by supply chain and logistics issues.”
Another exporter from Cebu asked for “very urgent” help with the issues of container shortage and the reduction in vessel operations for outbound cargoes, problems that started in 2020 with the onset of the pandemic.
All this has led to buyers “paying 3 times the usual rate but still no available space to accommodate increasing outbound /export shipment,” the exporter said.
Another company with reefer shipments bound for Baltimore said that despite premium rates paid, it has been waiting since January to get its cargoes shipped out, even as demand has gone up.
“We are still waiting for space availability. We have been paying for cold storage fees for the last 5 months,” the exporter wrote. “We [used] to book 2 weeks in advance. Now [it’s] 2-3 months ahead minimum just to secure a booking. Paying premium rates doesn’t secure a space either.”
Logistics hurdles are not just confined to US-bound exports. PHILEXPORT also received a report from a fresh fruit exporter whose shipping cost has increased three times to $12,000 per 20-foot container to the UK.