Costly logistics costs hurting Phl products — study

The prices of local and international products in the Philippines are on a spike, with customs duties and maritime transportation costs as the main culprits for the uptrend, according to a study by an international advisory services firm. 

In a paper titled, “Analysis of Logistics Costs for Imported and Domestic Containers in the Philippines,” Bluefocus Infrastructure Advisors’ Pablo Corralo Llorente disclosed that fees for Customs clearance processes contribute to 35 to 60 percent of the total cost of products.

Meanwhile, maritime transportation, which covers shipping line freight rates and surcharges, contributes around 20 to 40 percent of the total costs, respectively. 

“Maritime transportation is costlier in the Philippines than in neighboring countries in Southeast Asia, with destination charges playing a larger role,” Llorente said in a forum on Monday as he presented the study.

In his report, Llorente also highlighted that inland logistics for international containers represent 10 to 25 percent of the total logistic costs due to trucking and warehousing charges. 

Minimal port and terminal fees

Notably, the port and terminal charges at the destination contribute only five percent to 10 percent, mostly due to terminal handling rates.

All in all, the average logistics cost for an imported container in the Philippines clocks in at $5,300, or around P311,372—representing a little over 10 percent of the stock value.

The same trend is seen in domestic logistics, with maritime transportation and inland logistics costs at 45 to 50 percent,and port and terminal charges at only six to eight percent.

Food-related products, such as processed goods and agricultural produce, make up the largest share of outbound containers from Manila. 

Other significant commodities include clothing and textiles, construction materials, and healthcare supplies, the study revealed.

“In both international and domestic logistics, port and terminal charges comprise the smallest portion of the total logistics cost, while the highest cost is represented by customs clearance and maritime transportation expenses,” he said.