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A System-Wide Study of the Logistics Industry in the Greater Capital Region

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A System-Wide Study of the Logistics Industry in the Greater Capital Region A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Patalinghug, Epictetus E. et al. Working Paper A System-wide Study of the Logistics Industry in the Greater Capital Region PIDS Discussion Paper Series, No. 2015-24 Provided in Cooperation with: Philippine Institute for Development Studies (PIDS), Philippines Suggested Citation: Patalinghug, Epictetus E. et al. (2015) : A System-wide Study of the Logistics Industry in the Greater Capital Region, PIDS Discussion Paper Series, No. 2015-24, Philippine Institute for Development Studies (PIDS), Makati City This Version is available at: http://hdl.handle.net/10419/127038 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas A System-wide Study of the Logistics Industry in the Greater Capital Region Epictetus E. Patalinghug et al. DISCUSSION PAPER SERIES NO. 2015-24 The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are be- ing circulated in a limited number of cop- ies only for purposes of soliciting com- ments and suggestions for further refine- ments. The studies under the Series are unedited and unreviewed. The views and opinions expressed are those of the author(s) and do not neces- sarily reflect those of the Institute. Not for quotation without permission from the author(s) and the Institute. March 2015 For comments, suggestions or further inquiries please contact: The Research Information Staff, Philippine Institute for Development Studies 5th Floor, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines Tel Nos: (63-2) 8942584 and 8935705; Fax No: (63-2) 8939589; E-mail: [email protected] Or visit our website at http://www.pids.gov.ph A SYSTEM-WIDE STUDY OF THE LOGISTICS INDUSTRY IN THE GREATER CAPITAL REGION Epictetus E. Patalinghug Gilberto M. Llanto Alexis M. Fillone Noriel C. Tiglao Christine Ruth Salazar Cherry Ann Madriaga Ma. Diyina Gem Arbo Philippine Institute for Development Studies REVISED FINAL REPORT January 2015 Abstract The Port of Manila, the largest seaport in the country, has been recognized as the most widely used port in the Greater Capital Region with utilization rate of 71.6% compared to only 2.3% and 6.1% utilization of Batangas and Subic Ports, respectively (NEDA, 2012). The ports of Batangas and Subic were developed in order to accommodate excess traffic in the port of Manila and promote growth and development in CALABARZON and Central Luzon. However, port users still opt to operate in Manila Port. This leads to the congestion of Manila Port and the underutilization of the other two ports in the Greater Capital Region. The situation was intensified during the implementation of the recently lifted Manila truck ban. The study recognizes that issues and problems still persist in the logistics sector even after the regulation was put off. To address these, the study employs a system-wide approach to analyze the whole logistics industry in the Greater Capital Region. The first part of the study reports the findings of the focused group discussions and key informant interviews with shippers, freight forwarders, logistics service providers, and truckers regarding their port usage. The latter part discusses the rail option model that looks into the revival of the rail system in transporting goods to and from the ports. The study also gives a crude approximation of the economic cost of the seven-month truck ban. In addition, it provides a review of existing policies in the Philippine logistics sector, discussions among concerned agencies, other study recommendations, as well as lessons from other countries. Ultimately, the study provides an extensive list of short, medium and long-term measures to decongest Manila Port and to address the underutilization of Batangas and Subic Ports. The list is complemented with a dynamic timeline of the proposed measures and actions with their corresponding implementing agencies. Keywords: infrastructure, logistics industry, truck ban, port congestion, port utilization, rail connectivity, PNR, Manila Port, Batangas Port, Subic Port CONTENTS Abbreviations ...................................................................................................................... iii List of Tables ...................................................................................................................... vi List of Figures ...................................................................................................................... viii Executive Summary .............................................................................................................. x I. Introduction ............................................................................................................... 1 II. Objectives ................................................................................................................. 2 III. Methodology ............................................................................................................. 2 IV. Review of Literature ................................................................................................. 3 V. Regulatory Environment ........................................................................................... 13 VI. Analysis of Findings from Survey and Focused Group Discussion .......................... 16 a. Shippers/Locators Survey Results ....................................................................... 16 b. Quantifying the Cost and Time Delay of Shipment ............................................ 21 c. Train Option Scenario ......................................................................................... 22 d. Effect of the Truck Ban on Shippers/Locators ................................................... 24 – In the News: Appoint Port Czar to End Congestion ............................... 25 e. Survey Results from Freight Forwarders and Logistics Services Providers ............................................................................................................. 26 f. Surveys, Key Informant Interviews, and Focus Group Discussion of Freight Forwarders and Logistics Services Providers ........................................ 35 – Concepts in Context: Defining Port Congestion ..................................... 36 g. Truckers Survey Results ..................................................................................... 38 VII. Rail Connectivity of Economic Zones and Ports ...................................................... 46 a. Historical Background of the Rail Network in the Country .............................. 46 b. Recent Rail Experience for Freight Transport ..................................................... 50 VIII. Scenario Modeling of Freight Transport Through the PNR Network ...................... 52 a. Major Assumptions ............................................................................................. 52 b. The Rail Option Modeling Framework ............................................................... 56 c. Summary of Data Used in the Modeling ............................................................ 57 d. Scenario Modeling and Discussion of Results .................................................... 63 i – In the News: Multiple Problems Cause Congestion at Busiest U.S. Port Complex .................................................................................. 63 – In the News: Retailers Call On Obama to Ease West Coast Container Crisis ...................................................................................... 65 e. Conclusion .......................................................................................................... 68 IX. Estimating the Economic Effects of Port Congestion ............................................... 70 – In the News: Japan Automakers Turn to Airlifts as Port Row Hits US Production ................................................................................. 71 X. Planning Ahead of Capacity: The Bangkok Experience ........................................... 72 XI. Analysis Toward a Desirable Policy Direction ...................................................…. 75 a. On the Policy Regarding Container Traffic Coming from or Going to the South and North of Metro Manila ................................................................
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