Posted on May 15, 2017 by Kristianne Fusilero
Photo by : Mr. James Gabriel Verallo
THE RECENTLY launched sea connectivity between Davao and General Santos Cities in Mindanao and Bitung in Indonesia is expected to attract more investors that will allow the shipping company to recover its investments, an official of the Mindanao Development Authority (MinDA) said.
“It is understood that the first few voyages and shipments are not necessarily revenue generating,” said MinDA assistant secretary Romeo Montenegro in an interview with the reporters at the sidelines on the Forum on Doing Business with Europe at Seda Hotel on Friday.
Montenegro was referring to the P10 million a voyage investment of Asian Marine Transport Corp. (AMTC), the shipping company servicing the route, even as he projected that load factor will increase overtime.
The route, which was inaugurated on April 30 by President Rodrigo Duterte and Indonesian President Joko Widodo, is expected to have its second voyage to Bitung, Indonesia within this week.
The load factor, Montenegro said, is projected to pick up once the shippers have completed the process of consolidating their products on what products to be loaded in the vessel. He said some traders also want to first see actual voyages before deciding to utilize the route via AMTC’s Super Shuttle roll-on/roll-off vessel.
“Some want actual voyages happening first as it entails changing contract from one shipper to another shipper,” Montenegro said.
He said the Philippine-based companies, which have expanded in Indonesia especially those into canned tuna, can also take advantage on the opportunities of the route, which is cheaper compared from trading goods from Davao to Manila to Indonesia.
The route is serviced by AMTC, which charges $700 per twenty footer-equivalent unit (TEU) that is lower from the cost of $2,200 when shipping from Davao to Manila to Jakarta, Surabaya and Bitung in Indonesia.
Kim Pancho, branch manager of AMTC-Davao, told the reporters earlier that they hoped companies will utilize the new shipping route to make it sustainable. Even after the inauguration, he said there is more to be done to increase the number of companies that would harness the potentials of the route.
In its maiden voyage on April 30, Pancho said only 1% out of their 500-TEU capacity Super Shuttle vessel or five TEUs were utilized. These five TEUs were occupied by the flour products of Aboitiz-led Pilmico.
Apart from Pilmico, Trade and Industry Secretary Ramon Lopez said companies such as CDO Foodsphere Inc., Unilever, San Miguel Corp., ACS Manufacturing and FEMSA Coca Cola bared interest to utilize the new route.
“We hope especially the micro, small and medium enterprises to consider trading outside the country using this new connectivity,” Lopez said.