LOGISTICS firm Royal Cargo Inc. (RCI) will launch a direct Philippine-United States shipping route next month as a solution to the worsening global logistics problem to ensure the country’s food trade and security.
The company unveiled the plan during an August 13 meeting attended by government officials and industry players, documents obtained by the BusinessMirror showed. It was further confirmed by people familiar with the matter.
Those at the meeting were representatives from the Department of Trade and Industry (DTI), Philippine Exporters Confederation, Inc. (PHILEXPORT), Supply Chain Management Association of the Philippines (SCMAP) and Philippine Chamber of Commerce and Industry (PCCI), among others.
The meeting was chaired by Export Development Council Networking Committee on Transport and Logistics (EDC-NCTL) Chairman Henry L. Basilio. During the meeting, RCI Chairman and Group CEO Michael Raeuber revealed that their subsidiary Iris Logistics Inc. will provide a “direct, non-stop” shipping service between the Philippines and the US starting mid-September.
The direct route is aimed at easing the burden experienced by both Filipino exporters and importers due to global shipping problems that have persisted since the onset of the Covid-19 pandemic.
The route would greatly help the country’s agriculture exports while ensuring food security through on-time delivery of food from the US, experts and people familiar with the matter told the BusinessMirror.
“Royal Cargo’s move augurs well in expanding the Philippines’s comparative advantages in exporting agriculture products,” economist Pablito M. Villegas told the BusinessMirror.
“Agriculture logistics is the major growth driver of our trade and Royal Cargo fits well with that—it is well capitalized and has well-provisioned facilities that the government must take advantage of,” Villegas added.
The US Department of Agriculture Foreign Agricultural Service in Manila said Royal Cargo’s plan “strengthens and safeguards” Philippine-US trade, particularly in terms of food supply.
“Further demonstrating the need for a free and open Indo-Pacific, this development strengthens and safeguards both countries’ respective supply chains, food security, and economic prosperity. The United States is proud to be one of the top export destinations for Philippine agricultural and food exports,” US Agricultural Counselor Morgan Haas told the BusinessMirror.
The Philippines’s top agricultural exports to the US include coconut oil, pineapples and pineapple products, raw sugar, carrageenan, tunas and activated carbon among others. On the other hand, the country’s top farm imports from the US are wheat, soybean meal and oil, milk and dairy products, and fruits, among others.
The direct shipping route will be undertaken by Iris Logistics with the start of empty container release slated on August 23 and is expected to depart the port of Manila on September 15. Iris will deploy its MV Iris Paoay, with a capacity of 1,100 twenty-foot equivalent units (TEUS) and 220 reefer slots, for the route.
The vessel will make calls at the ports of Cebu and Davao en route to the Port of Hueneme in California, allowing Cebu and Davao-based companies to save on domestic transshipment costs. And since it is a direct, non-stop service it will also eliminate the cost of transshipping to Singapore or other international ports.
The Manila-Cebu-Davao-Los Angeles-Manila route will take a total of 42.5 days (21 days Davao-Los Angeles and 20 days Los Angeles-Manila). The freight costs for the service would be based on prevailing market rates and “no unnecessary local charges will be imposed,” based on the documents.