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Business

Shipping rates to increase by an average of 25%

Richmond Mercurio - The Philippine Star
Shipping rates to increase by an average of 25%
In an interview on dzBB, Philippine Liner Shipping Association (PLSA) president Mark Matthew Parco said the planned rate increase would not require approval from the government as the industry is deregulated.
STAR / File

MANILA, Philippines — Cargo shipping rates are set to increase by an average of 25 percent, as ship owners seek to cushion the impact of soaring fuel prices on their operations.

In an interview on dzBB, Philippine Liner Shipping Association (PLSA) president Mark Matthew Parco said the planned rate increase would not require approval from the government as the industry is deregulated.

Parco said shipping lines would have to negotiate directly with business owners and customers for their respective cargo rates.

PLSA is a shipping association whose majority members are cargo operators.

“The rates vary per shipping line. Those whose rates are still low may implement a higher increase. Those whose rates are already a bit higher may implement a lower increase. So it will be different, but the estimate is 25 percent,” Parco said.

Parco said fuel accounts for as much as 50 percent of the operating cost of a ship.

With fuel prices soaring, he said shipping companies cannot anymore absorb further losses.

“We’re not implementing this increase because we simply want to earn. I think this is a matter of survival,” he said.

“There are times that we will help, and there are times in which we will need help. And this is one of the times that we need help because the cost is really too high,” Parco said.

Maritime Industry Authority (MARINA) administrator Robert Empedrad said passenger ships are also set to increase their rates.

Empedrad said the proposed increase in rates by shipping companies are “justifiable.”

“It’s not regulated by MARINA. We’re not the one deciding if they will increase or not. We can only request, just like what we did during the pandemic, we requested if they should not be increasing rates during the pandemic. So before they agreed, they helped the nation by not increasing their rates,” Empedrad said.

“However, the impact of fuel on them has been significant because it’s about 40 to 50 percent of their operational cost. So they really cannot handle it if they will not increase. That’s why most of the ship owners are increasing their rates,” he said.

Aside from shipping companies, truckers have hiked their rates by 30 percent to survive the impact of soaring fuel prices.

In a notice dated March 7, the Confederation of Truckers Association of the Philippines said its member operators would negotiate and make the necessary and corresponding 30 percent increase of their respective truck rates.

The group said the adjustment is to enable them to “continuously provide an exceptional and quality service to their respective client.”

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