Mindanao shippers urge cargo pooling to cut shipping cost

This was also the appeal of the Mindanao Federation of Shippers’ Association (MFSA) to the different business and trade associations to adopt the pooling of cargo even by and among competitors if only to cut down transportation costs out of Mindanao and to the main market in the national capital.

Vicente S. Lagdamen, Jr., MFSA president, told a recent regional business conference in Isulan Sultan Kudarat, that cargo pool was applied by local tuna exporters here and the Cagayan de Oro City-based Northern Mindanao Shippers’ Association, Inc. in the shipment of products like vegetables. The tuna exporters send their products to the United States, while the Cagayan de Oro shippers send their vegetables to Metro Manila markets.

“Volume cargo shipments always get lower rates,” he Lagdamen said. He said that the Cagayan de Oro experience since 2006 has brought down freight cost by as much as 50 percent, the average of which was at 40 percent reduction.

The method has benefited a lot of small farmers and small shippers in Northern Mindanao that Lagdamen said he hoped that other Mindanao regions would also adopt it, he told the Isulan conference.

Lagdamen has asked conference participants who represent sectors or trade associations to organize their production to suit a specific shipping schedule. He said this would be applicable to the grains sector, export crops like fruits, banana and vegetables.

Industry players in Mindanao have been complaining several years ago on the shipping cost that they said was much higher than the international freight, thus Lagdamen said, government support was necessary for this practice to succeed.

The MFSA said that figures it gathered would show, for example, that to ship a 20-footer dry van from Manila to Kaosiung or Hongkong would cost $400, but the cargo size from either Davao City or General Santos City shipped to Manila would cost $800.

“It would require the assistance of government agencies like the departments of Trade and Industry, Agriculture, and Environment and Natural Resources to make the cargo pooling machine work effectively,” Lagdamen said.

He said that the DTI may spearhead organizing trade associations and identifying similar the products to be shipped simultaneously to domestic markets.