IS the Maritime Industry Authority (Marina) a defender of public interest or a lobbyist for the shipping industry?
Late last week, Marina, a government agency tasked with regulating the Philippine domestic shipping industry, announced it will soon cut the number of vessels plying the same route “to stop cut-throat competition among shipping companies” and “reduce inefficiencies” that should supposedly lower cargo handling rates. “We have to limit business cost to the lowest possible figure so that we could maintain current rate levels if not reduce or prevent rate increases altogether,” said Vicente Suazo,
That statement is interesting because if indeed
For so long, shippers in
It is the nature of these complaints that forced the government to deregulate the country’s shipping industry in the early 1990s. And indeed, analysts have noted a substantial improvement in the quality of service provided by shipping companies. Marina’s recent policy pronouncements therefore tends to reverse these gains, and bring us back to the days when most routes were operated only by one shipping firm, resulting in sloppy services and prohibitive freight charges. In fact, what
For instance, the government still regulates the third-class passenger service and requires ships to devote 50 percent of passenger capacity to third class, thus making passenger ships uncompetitive vis-à-vis the cargo-only vessels. Another government policy that is stifling the shipping industry is the ceiling on return on incentives. Certainly, a ceiling on ROI deters companies from providing a better and more efficient service because the returns may not be commensurate to the level of service rendered. It’s also a disincentive to would-be investors. Of course, deregulation would allow shipping firms to raise their fare and freight charges, but at least they cannot do so indiscriminately if the industry is open to foreign competition and they would have to reckon with possibly more efficient players and lower rates. Yes, total deregulation that should include the lifting of the “cabotage law” is the key.