The long line of trucks coming from Sourth Luzon expressway all the way to the endpoint of North Luzon expressway has become a regular scene along C-5 road. This line represents the active commerce we have despite these difficult times, for which we should all be thankful. These trucks carry supplies, raw materials, agri-products, or just about any item that needs to be delivered. But the long line of trucks, moving slowly, also gives us an insight of the difficult state of the cargo and logistics sector in our country.
Running a delivery and cargo business, or depending on one in the course of doing your business, is a complicated and expensive enterprise in the Philippines. Based on a 2017 World Bank study, logistics costs took up 27.16 percent of the total sales of Philippine companies as compared to Indonesia (21.4 percent), Vietnam (16.3 percent) and Thailand (11.11 percent). There are many regulatory as well as institutional barriers that our truckers face. Just ask any truck operator the hurdles they need to face from point A to point B. For instance, just to secure the franchise to operate is a long and tedious regulatory process. Then there are the permit and fees, some redundant requirements that need to be secured from both national and local governments. And on the road, truckers need to contend with the many “checkpoints”—legal or illegal. Then you have the traffic congestion plus the restrictive truck bans on select roads that put a heavy stress on their operational expenses. All of these contribute to extra costs, not all of which can be passed on to the end-users; the end result being a local logistics industry that is not just expensive but years behind compared with our Asean neighbors.
Early on in this administration there were moves to modernize the sector, similar to the jeepney modernization program of the government. But again, just like the jeepneys, modernization was focused on the vehicle type rather than the ecosystem where the local logistics industry is operating, which should be the case. My take:
1. Streamline local government pass-throughs: Ask any trucker and he will tell you about the permits, tolls, levies that they need to secure and pay for from each and every city or town they need to pass through. This practice needs to be stopped, at the very least streamlined. Just this year, a joint DILG-DOF-ARTA circular was signed to specifically address this during this pandemic.
2. Streamline the harborside—A similar situation meets the truckers at the piers. Coordination with the various government and private entities to include PPA, BOC, the wharf concessionaires, among others, needs to be strengthened. Redundancy of fees and permits, impractical scheduling processes, as well as abolition of arbitrary policies need to be reviewed and acted on.
3. Review the truck ban and/or provide number coding exemptions —For truckers, the truck ban and the number coding put such a heavy toll on their operations, especially as lanes and schedules open to trucks are all subject to various local government units and national government regulations. There is a need to review traffic policies of all LGUs and make them cohesive. I have another suggestion: why not allow all national roads, to include Edsa, for trucks at night when there are less vehicles on the road?
4. For the long-term solution, we really need to face the situation that Metro Manila cannot continue to host the main ports in this country. We will need to use the Batangas and Subic Ports. It will also make more sense as a majority of the endpoints of deliveries—all the factories and warehouses, are already in Laguna, Cavite or Bulacan.
Logistics is one key driver in our economy, more heartfelt in these pandemic times. The government needs to attend to this, the sooner the better, especially with recession on our heels. The logistics industry can be made more efficient by a simple review and tweaking of policies. All it takes is the political will of an administration willing to do it.
The author may be reached via e-mail: thomas_orbos@sloan.mit.edu