Saturday, February 18, 2006

Truckers and their gripes

If truckers who are supposedly busy hauling goods from the ports and factories to retailers and consumers would suddenly find themselves engaging in political action (e.g., barricading the North Luzon Expressway), we know we have a real problem. What if suddenly all the truckers suddenly stopped working? Fortunately, the Confederation of Truckers Association of the Philippines (CTAP) that claims to be one of the biggest truckers organizations in the country, did not join the mass action. Rodolfo de Ocampo, CTAP president, said they didn’t join the demonstration because they fear such actions could “paralyze” the economy. “We don’t normally resort to such actions,” he said. De Ocampo, however, stressed that the issues being raised by those who conducted the mass actions are valid and he is urging government agencies to address the industry’s concerns. In this interview (unedited), de Ocampo explained the industry’s gripes and provides recommendations on how to solve them. You may or may not agree with his recommendations but it's worth reading. Excerpts:

Huge trucks barricaded the NLEX last week, causing a massive traffic jam. What’s the issue there?

It’s the strict implementation of the Section 7c of the Implementing Rules and Regulations of RA 8794 [An Imposing a Motor Vehicle User’s Charge on Owners of all Types of Motor Vehicles and for other purposes] at the NLEX. The trucks carrying cargo that exceeds the weight limit of 13,500/axle are prohibited from using the NLEX. However, the government has not offered any alternate route for the truckers which makes them difficult to deliver the goods from Central Luzon to Manila, and vice versa. A 10-wheeler cargo truck with 2 axles that usually carries 25MT will only be allowed to load 17,000 kgs. Since the freight charge for loose cargo is computed on a per bag/ton basis and the delivery costs are the same, the hauling charge is not enough to cover the delivery cost in view of the high cost of diesel, toll fees, and other operating expenses. Only trucks with high axle load capacity can be used to transport goods which are not enough to cope with the requirements of customers being serviced by the trucking industry, thereby affecting the delivery of goods for local and international markets.

On the other hand, the weight of loaded containers being shipped to the Philippines varies depending on its size. Most of them exceed the allowable load as provided for in the aforementioned provision. As truckers, we are not privy to the true or actual weight of containerized goods bound for either export or import. It is the shippers who are in the best position to determine the authentic weight of cargo. We are merely responsible for moving the cargo in a punctual and safe manner from one destination to another. The shippers maximize the space of containers to save on the cost of shipment. However, the truckers are the ones being penalized.

Did your organization join that strike?

No. Our organization comprises 18 trucking associations, involving 8,000 individual companies. Eleven of these trucking associations operate in Metro Manila, Central Luzon, and Calabarzon. If we join that mass action, the economy will be crippled. We normally avoid that course of action. It’s counterproductive. We would rather go for dialogue.

How big is the trucking industry? How many are affected by this problem?

Based on the LTO’s statistical data, the trucking industry has a total population of 266,915 trucks scattered all over the country. There are about 2.5M employees consisting of drivers, truck helpers, mechanics, tinsmiths, office personnel and their families who are directly independent on them. This excludes the suppliers of diesel fuel, parts and other service contractors whose income comes from the trucking industry. The truckers remit their dues to the national government by paying the annual registration, franchising, business permits and taxes of their earnings to the tune of P1.5B as their contribution to the government coffers. Three types of trucks being used in the industry, namely trailer trucks, 10-wheeler trucks, and dump trucks.

We have no way of determining the percentage composition of each type of truck in the whole population. But if we use CTAP’s own statistical data of trucks operating in Metro Manila, Calabarzon, and Central Luzon provinces, there are 6,000 units that are affected. Trailer trucks, comprising 58 percent of the total are operating at various ports in Metro Manila transporting containerized cargo. Ten-wheeler trucks, which account for 37 percent, transport loose cargo as well as 20-footer containerized goods. The remaining 5 percent are accounted for by dump trucks hauling gravel and sand and other construction materials.

Trucking companies are classified into small, medium, and large. The small ones accounting for 43 percent of the total are those with 1-9 units; medium, comprising 39 percent are those with 10-19 units; and the large ones, accounting for 18 percent, are those with 20 or more units.

Have you figured out the industry’s contribution to the economy?

In every part of the country, whether in the rural or urban areas, trucks are on the road carrying cargo. In Luzon, trucking operations are concentrated in the CALABARZON, Metro Manila and Central Luzon Provinces. These are the economic hubs where the manufacturing companies, importers/exporters, poultry/hog raisers, economic zone, ports are being serviced by trucks. Specifically, truck are used for multifarious economic activities including the transport raw materials to manufacturing plants and distribute finished products to the markets; delivery of export and import products; delivery of agricultural products to the farm/markets; and the delivery of construction materials to infrastructure projects and other construction sites.

I can sense that the truck ban is also a problem among truckers. Is that true?

The problem is really about unsynchronized truck ban time in Metro Manila. Some LGUs in Metro Manila have their own truck ban ordinances which are not synchronized with the established truck ban regulation of MMDA. Their truck ban is from 6:00 – 9:00 A.M. and 4:00 – 9:00 P.M. while the MMDA’s is from 6:00 – 9:00 A.M. and 5:00 – 9:00 P.M. Because of this, the window period for the trucks has been shortened considerably, thus diminishing the capacity of truckers to earn and provide efficient service to customers. Export products must be delivered to the port before the scheduled departure of ship or airplane.

Moreover, towing companies accredited LGU’s charge the truckers ranging from P2,500 – P8,000, which can be described as capricious and detrimental to the interest of the industry. Tow truck personnel are abusive, they force the driver to get down, or grab the wheel from the driver.

I heard the Local Government Code also has created a lot of problem for the industry?

Some LGUs imposed annual fixed tax on delivery truck or van of manufacturers, producers, wholesalers, dealers or retailers in certain products pursuant to Sec 141 of the local government code. The province may levy an annual fixed tax for every truck/van or any vehicle used by manufacturers, producers, wholesalers, dealers, and retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products as may be determined by the Sangguniang Panlalawigan, to sale outlets, or consumers, whether directly or indirectly within the province. We believe we do not fall within the purview of this provision because our trucks are not owned by the manufacturers, producers, wholesalers, etc, in the distribution of the said products to their respective sale outlets or consumers within the province, Cargo trucks, in entering the territory of any province, city or municipality is merely passing through their territorial jurisdiction. Moreover, cargo trucks are already subjected to Motor Vehicle User’s Charge (MVUC) by the national government under RA 8794, which is known as the Road Users Tax. To impose further taxation to similar facilities by said units will run counter to Sec 10 of RA 8794, which explicitly provides that no other tax for or any charge of similar nature as the MVUC shall be imposed by any political subdivision or unit in the country.

I understand you have a dialogue with government agencies yesterday, besides those you already have cited, what other problems did you bring to the attention of the government?

One is the cut-throat competition in terms of setting hauling rates. Small truckers offer very low rates to prospective customers just to keep their units running. Companies hire their services to economize in the delivery cost of goods to their customers. However, after several weeks or months, the truckers stop their service because they cannot sustain the operation of business. This malady in business practice destroys the stability of trucking industry.

Another is the continued increases in prices of diesel fuel and parts. The trucking industry is hard hit by the oil crisis. The strong demand and chronically scarce supplies of diesel fuel in the world market consistently moves its price higher. In view of this, the price of diesel in the local market goes up almost on a weekly basis which makes it doubly hard for the trucking industry to sustain business operations.

And third is the lack of government assistance. Trucking is the only sector in the transportation industry that has not been given any incentive by the government, not recognizing the fact that it is the life blood of commerce and trade in the country. Its service contributes immensely to the nation’s economic stability and development.

What do you think are the impacts of these problems on the economy?

The strict implementation of the axle load limit of 13,500 kgs will certainly junk a large portion of trucks population, thereby aggravating the unemployment problem in the country. It will create paralysis in the land transport system of goods. The hostile business climate—our problems at the NLEX, unsynchronized truck ban, high annual fixed tax by LGUs, coercive towing and high fees on towing, among others—will severely affect the stability of the trucking industry. Several small truckers have already closed shop due to their inability to sustain their business operations.

What were your recommendations to the government during the dialogue?

We have several recommendations.

1. From the point of origin abroad, the loaded containers being shipped to the Philippines must conform with the weight limit prescribed by RA 8794.

2. From the loading point in the Philippines, the loaded container for export must conform with the weight limit prescribed by RA 8794.

3. Establish government policy guidelines governing weight restriction for local shipment of containerized and loose cargo in accordance with RA 8794.

4. For the loose cargo, implement the load limit for the 10-wheeler cargo and flat bed trailer trucks. However, [we will] increase the rates to compensate the reduced weight.

5. Synchronize the truck ban period in Metro Manila to give enough time for the delivery of raw materials and finished products to its destinations, particularly the export product.

6. LGUs in Metro Manila must have uniform towing rates and policy guidelines similar to MMDA’s to preclude the accredited towing companies from committing abuses.

7. DILG should make representation with the DOJ for legal opinion on the application of Sec 141 of the Local Government Code to trucks plying in the provinces.

8. Establish government policies to forestall the proliferation of fly by night and colorum operations of trucks. Require trucking companies/firms to join an association accredited by DTI to avert cutthroat competition in the industry.

9. Provide incentives to truckers by allowing cooperatives to import goods free of tax and custom duties to mitigate the impact of the high cost of diesel fuel.

10. Assist the truckers in availing of the loan being extended to other sectors by government financial institutions on a long term basis to help trucking companies reflect/upgrade their units.

How did the government respond to these recommendations?

They formed a technical working group to study our proposals. They are going to have answers within seven days. The DTI/BOI has also promised us to provide us some fiscal incentives.

I thought all along trucking could also enjoy fiscal incentives.

No. We want fiscal incentives to mitigate the impact of high fuel prices. If the cooperatives enjoy exemptions from customs duties, why can’t we? We also hope government financial institutions could provide us long-term loans so we could upgrade our trucks, retool, or re-fleet, buy new units. But at this time, the government is doing nothing.

Does it mean they are going to stop apprehending “overloading” trucks within those seven days?

They didn’t say that.


Anonymous said...

Nice post, brother.

One thing that really makes me wonder in this country is why, why and why don't we have a "production route?" for the delivery of our goods? Ain't our government even thinking of providing one?

If only we can at least have a fraction of what I've observed at Japan.... Aside from their Subways, Highways, Monorails and Railway system y'know, one thing that had gotten my attention really was this separate inner track at their railways which was solely devoted to the transport of "goods". I called it then the "production" route.

What's the sense of setting up speedier LRTs or MRTs to transport people back and forth to their workplaces and homes when the "goods" to support the economy cannot be delivered on time because they are held hostage by the "truck ban" during rush hours?

Can there be balanced productivity when only the workforce has mobility?

Just wondering...... :)

BTW, how do i get beyond this "username" mystery in blogspot that says it's invalid, so I can get my own blog? would appreciate if you can teach how to do it.

Dave Llorito said...

louise: your comment on "production route" is really something that only you could explain fully well given your archi and planning background. hope you consider that in the design of your blog. thanks for the comments. let's expand our own network of bloggers, highlight each one's expertise.

Term Papers said...

I love your blog! You will be in our prayers and thoughts! Nice and informative post on this topic thanks for sharing with us.Thank you!

College Term papers within deadlines.

James Abram said...

Thanks for posting informative and detailed article. Do you know any trucking business philippines?

Jessica said...