A GROUP of shippers in Mindanao has requested shipping firms to deploy its much larger vessel going to and from the southern part of the Philippines in order to effect an economy of scale that will reduce shipping rates in the long run.

As an added sweetener for the shipping lines, Mindanao Federation of Shippers Association (Minfesa) promised to have a much larger volume by consolidating the goods of its members and will use Mindanao Container Terminal (MCT) as their hub in the south.

Minfesa said in a statement that they could not “maximize the benefits of the economies of scale” if operators continue to deploy vessels with a capacity of carrying just 250 standard containers.

Given the smaller size of the vessel, it is not surprising that domestic freight rates are high, the group said.

The MCT, which is temporarily being operated by Phividec (Philippine Veterans Investment Development Corp.) Industrial Estate Authority, is being groomed to become an alternative port outside the Cagayan de Oro port, which owned by Philippine Ports Authority.

The MCT has two gantry cranes and four rubber-tired gantries and could accommodate ships of up to 1500-TEU capacity. The terminal has three regular callers as to date that include international carrier Maersk and the Magsaysay-owned National Marine Corp. and Lorenzo Shipping Corp.

The terminal has a capacity of 270,000 containers, with provisions of additional back-up areas if traffic requires. Minfesa said Phividec should promote the said terminal to the shippers and shipping lines to the rest of Mindanao, and offer a lower tariff-rate.

Based on the document provided by the group, northern Mindanao ports handled a combined average of 6,741 twenty-foot equivalent units per week. The freight rate for the Cagayan de Oro-Manila leg is about $882 per TEU.

MCT’s full operation allows bigger cargo vessels to dock and avail of modern cargo handling equipment to reduce turn-around time of the vessels, and cargoes from southern and central Mindanao can be diverted to northern Mindanao to save on transit time by about 24 hours, the group said.

This would translate to savings in transport cost by about 30 percent, it added.

“Along this premise, domestic shipping lines should deploy a bigger vessel with a capacity of more than 1,000 TEUs to reduce the unit cost of the cargo. If the unit cost will be reduced coupled with cargo consolidation, freight rate will definitely go down,” Minfesa said.

“Local shipping lines should also consider entering into a joint venture with foreign lines and use the latter’s bigger vessels with capacity of at least 1,000 TEUs for the Manila-Cagayan de Oro route.” Minfesa also Maritime Industry Authority to encourage local shipping lines to deploy new generation Roro-passenger vessels for Manila-Cagayan de Oro route, through its policy-setting power.

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A GROUP of shippers in Mindanao has requested shipping firms to deploy its much larger vessel going to and from the southern part of the Philippines in order to effect an economy of scale that will reduce shipping rates in the long run.

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