Presentation of Francisco Delgado IV at The 2nd Subic Bay Maritime Conference and Exhibit

The 2nd Subic Bay Maritime Conference & Exhibit
Subic Bay: Your Gateway To Northern Luzon
THE COST OF SHIPPING

THROUGH SUBIC
April 24, 2015
Subic Bay Convention & Exhibition Center
Characteristics
Manila
Subic
Major vehicular traffic
No vehicular traffic
City not master planned
Master planned by USA
Road construction projects
Central location
Robust economic growth
Available infrastructure
Truck ban
No truck ban
Flooding
No flooding
Over-populated
Not over-populated
Import Costs
Shipping Freight, Arrastre & Wharfage 20 Container (TEU)
Manila
Subic
Ocean Freight (From Belawan)
US$ 545.00
US$ 750.00
Congestion Surcharge
US$ 300.00
NONE
Container Deposit
Depends on
agreement with FSL
NONE
Arrastre
Php 3,727.00 plus

VAT (Php 4,174.24)
Php 1,863.00
Non-VAT
Wharfage
Php 539.73 plus VAT

(Php 604.50)
Php 560.90
Non-VAT
Import Costs
Port Container Storage 20 Container (TEU)
Manila
Subic
First 5 days free*
First 5 days free*
6-10 Php 481.30 plus VAT(Php 539.05)
Second 5 days free*
11-15 Php 429.43 plus VAT (Php 529.96) 10-14 US$ 14.53 NON-VAT (Php 639.32)
31-Up Php 5,000.00 or Php 5,000.00 10
days after payment of D&T plus VAT
(Php 5,600.00)
10% increase every 10th day thereafter
*Note: If container remains over 5

days, the storage fee of Php 481.30 is
applied retroactive from day 1 (plus
VAT)
*Note: If container remains over 10

days, the storage fee of US$ 12.11
(Php 532.84) is applied retroactive
from day 1 (NON-VAT)
Import Costs
Trucking 20 Container (TEU)
Manila
Subic
To Clark
Php 31,350.00 plus VAT

(Php 35,112.00)

(Php 20,160.00)
To Manila

(Php 14,616.00)

(Php 46,200.00)
To Subic

(Php 46,200.00)
Php 6,500.00 Non-VAT
To Bataan

(Php 49,728.00)

(Php 20,160.00)
To Tarlac

(Php 41,160.00)

(Php 31,360.00)
Import Costs
Diversion, Relocation, Demurrage, Detention 20 Container (TEU)
Manila
Subic
Diversion of Empties

(Php 11,200.00)
NONE
Relocation of
Overstaying Containers

(Php 32,480.00)
NONE
Demurrage
First 5 days free

Day 6 - 7 Php 300.00
Day 8 20 Php 1,000.00
Day 21 Up Php 2,000.00
Same as Manila
Detention
First 5 days free

Day 6 - Up Php 1,000.00
Same as Manila
Import Assumptions & Scenarios

To Clark - 20 Container (TEU)
Manila A
Manila B Manila C Subic
Manila D
Light
Medium
Heavy
None
Like
Subic
Days at port
10
30
Days for trucking &

unloading
Days for empty

diversion
Days for handling

overstaying TEUs
Payment day of
Duties & Taxes
Days - Demurrage
10
30
Days - Detention
Total Days
14
36
30/60
30/60
30/60
Shipment delay
Import Scenario
Manila A: Light Congestion - 20 Container (TEU)
Origin
Destinatio
n
Belawan Manila
Arrastre
Ocean
Freight
Congestio
n
Surcharge
Total Freight
US$ 545.00 US$ 300.00 Php

Wharfage
Port Storage
Trucking
37,180.00
Php 4,174.24
Php 604.50
Php 0.00
Empty
Diversion
Reposition
Demurrage
Overstaying
Detention
Php
11,200.00
Php 0.00
Php 0.00
Php 0.00
Container
Deposit
Php 5,000.00
Php 35,112.00
Total Cost
Total Days
Loss of Sales
Php 93,270.74
30/60 + 9
Import Scenario
Manila B: Medium Congestion 20 Container (TEU)
Origin
Destinatio
n
Belawan Manila
Arrastre
Ocean
Freight
Congestio
n
Surcharge
Total Freight
US$ 545.00 US$ 300.00 Php

Wharfage
Port Storage
Trucking
37,180.00
Php 4,174.24
Php 604.50
Php 5,390.56
Empty
Diversion
Reposition
Demurrage
Overstaying
Detention
Php
11,200.00
Php 0.00
Php 0.00
Php 3,600.00
Container
Deposit
Php 5,000.00
Php 35,112.00
Total Cost
Total Days
Loss of Sales
Php 102,261.30
30/60 + 14
Import Scenario
Manila C: Heavy Congestion 20 Container (TEU)
Origin
Destinatio
n
Belawan Manila
Arrastre
Php 4,174.24
Ocean
Freight
Congestio
n
Surcharge
Total Freight
Container
Deposit
US$ 545.00 US$ 300.00 Php

Php 5,000.00
Wharfage
Port Storage37,180.00
Trucking
Php 604.50 Php 107,376.48 Php 35,112.00
Empty
Diversion
Reposition
Overstaying
Demurrage
Php
11,200.00
Php 32,480.00 Php

33,600.00
Detention
Php 1,000.00
Total Cost
Total Days
Loss of Sales
Php 267,727.22
30/60 + 36
Import Scenario
Subic: No Congestion 20 Container (TEU)
Origin
Destinatio
n
Belawan Subic
Arrastre
Ocean
Freight
Congestio
n
Surcharge
Total Freight
US$ 750.00 US$ 0.00

Php
Wharfage
Port Storage
Trucking
33,000.00
Php 1,863.00
Php 560.90
Php 0.00
Empty
Diversion
Reposition
Demurrage
Overstaying
Detention
Php 0.00
Php 0.00
Php 0.00
Php 0.00
Container
Deposit
Php 0.00
Php 20,160.00
Total Cost
Total Days
Loss of Sales
Php 55,583.90
0+5
ZERO
Import Scenario
Manila D: Like Subic Assumptions 20 Container (TEU)
Origin
Destinatio
n
Belawan Manila
Arrastre
Ocean
Freight
Congestio
n
Surcharge
Total Freight
US$ 545.00 US$ 300.00 Php

Wharfage
Port Storage
Trucking
37,180.00
Php 4,174.24
Php 604.50
Php 0.00
Empty
Diversion
Reposition
Demurrage
Overstaying
Detention
Php 0.00
Php 0.00
Php 0.00
Php 0.00
Container
Deposit
Php 5,000.00
Php 35,112.00
Total Cost
Total Days
Loss of Sales
Php 82,070.74
30/60 + 5
Import Scenario
Subic: No Congestion & Stabilized Rates 20 Container (TEU)
Origin
Destinatio
n
Belawan Subic
Arrastre
Ocean
Freight
Congestio
n
Surcharge
Total Freight
US$ 545.00 US$ 0.00

Php
Wharfage
Port Storage
Trucking
23,980.00
Php 1,863.00
Php 560.90
Php 0.00
Empty
Diversion
Reposition
Demurrage
Overstaying
Detention
Php 0.00
Php 0.00
Php 0.00
Php 0.00
Container
Deposit
Php 0.00
Php 20,160.00
Total Cost
Total Days
Loss of Sales
Php 46,563.90
0+5
ZERO
Import Scenario Summary

To Clark - 20 Container (TEU)
Scenarios
Total Cost
Total Days
Loss of Sales
Manila A - Light
Php 93,270.74
30/60 + 9
Manila B - Medium
Php 102,261.30
30/60 + 14
Manila C - Heavy
Php 267,727.22
30/60 + 36
Subic No Congestion
Php 55,583.90
0+5
ZERO
Manila D Like Subic
Php 82,070.74
30/60 + 5
Subic Stabilized Rates
Php 46,563.90
0+5
ZERO
Actual Case Study

Importer from Las Pinas 40 Container (FEU)
Manila
Subic
Arrastre & Wharfage
Php 10,500.00
Php 4,300.00
Duties & Taxes
Php 81,300.00
Php 81,300.00
Trucking
Php 15,000.00
Php 34,000.00
Miscellaneous
Php 56,800.00
Php 34,700.00
Total
Php 163,600.00
Php 154,300.00
Business Loss
Php 132,000.00*
ZERO
TOTAL LOSSES
Php 295,600.00
Php 154,300.00
21-50
TOTAL DAYS
Note: * Importer lost US$ 1.5 Million in 2014 due to Manila port congestion; At 500 FEUs
per year, that equates to a loss of Php 132,000.00 per FEU at an exchange rate of Php
44.00 to US$ 1.00.
Export Costs
Shipping Freight & Arrastre 20 Container (TEU)
Manila
Subic
Ocean Freight
(To Belawan)
US$ 545.00
US$ 750.00
Arrastre
Php 3,043.00 plus VAT (Php 3,408.16) Php 1,521.45

Non-VAT
Port Container
Storage
First 5 days free
First 5 days free
6-10 Php 60.15 plus VAT (Php 67.36)
Second 5 days free
Export Costs
Trucking 20 Container (TEU)
Manila
Subic
From Clark

(Php 35,112.00)

(Php 20,160.00)
From Manila

(Php 14,616.00)

(Php 46,200.00)
From Subic

(Php 46,200.00)
Php 6,500.00 Non-VAT
From Bataan

(Php 49,728.00)

(Php 20,160.00)
From Tarlac

(Php 41,160.00)

(Php 31,360.00)
Export Assumptions & Scenarios

From Clark - 20 Container (TEU)
Manila
Subic
Days for trucking & unloading
Days at port
Total Days
Potential Delays
30
ZERO
Export Scenarios
Manila & Subic Assumptions 20 Container (TEU)
Origin
Destination
Ocean
Freight
Total Freight
Arrastre
Manila
Belawan
US$ 545.00 Php 23,980.00 Php 3,408.16
Php 0.00
Subic
Belawan
US$ 750.00 Php 33,000.00 Php 1,521.45
Php 0.00
Origin
Destination
Trucking Cost
Clark
Manila
Php 35,112.00
Clark
Subic
Php 20,160.00
Port
Total cost
Potential Delays
Manila
Php 62,500.16
30
Subic
Php 54,681.45
ZERO
Port
Storage
Other Advantages of Subic

Tax-free incentives
No need to pay customs duties & taxes for entire
shipment upfront
Ideal transshipment port within the Philippines
Ideal seaport for disaster management
Marikina Fault (West Valley Fault)

West Valley Fault has moved
4 times in the last 1400 years
Movement interval is
estimated every 400 years
Last major earthquake from

West Valley Fault was in 1658
Given the above
calculations, there is a high
probability the West Valley
Fault will move in our
lifetime
Potential strength of earthquake is between 6.5 to 7.5
magnitude
Loma Prieta Earthquake

San Francisco, CA
October 17, 1989
Magnitude 6.9
Approximately 63 deaths and 3,757 injuries
Estimated US$ 6 Billion in damages
Elevated freeways collapsed, liquefaction of soil in the
Marina District (reclamation area) damaged many
buildings, and airport runways and taxiways cracked
Great Hanshin Earthquake

Kobe, Japan
January 17, 1995
Magnitude 6.9
Approximately 6,000 deaths and 37,000 injuries
Estimated US$ 150 Billion in damages
Elevated freeways collapsed, around 200,000 buildings
damaged, and approximately 80% of ports destroyed
Marikina Earthquake
Estimated Damages & Casualties
PHIVOLCS Risk Analysis Study 2013
If Magnitude 6.5
If Magnitude 7.2
Approximately 23,000 deaths Approximately 31,000 deaths

and 400,000 injuries
and 511,000 injuries
Estimated US$ 40 Billion in
damages (Php 1.8 Trillion)
Estimated US$ 51 Billion in

damages (Php 2.2 Trillion)
6,540 hectares of completely 8,800 hectares of completely

collapsed structures
collapsed structures
16,300 hectares of damaged
structures
17,300 hectares of damaged

structures
Conclusion
Hands down Subic is cheaper then Manila
Need to engage Subic-based freight forwarders &
brokers
Subic enables effective pricing forecasts compared to
Manila
Rate premiums will stabilize as volumes in Subic

increase
Conclusion
To achieve long term sustainability, Subic needs unwaivering support from all stakeholders
The fruits of this collective investment in Subic is not
for the benefit of a select few, but rather, the majority
The 2nd Subic Bay Maritime Conference & Exhibit

Subic Bay: Your Gateway To Northern Luzon
Thank You!

Presentation of Francisco Delgado IV at The 2nd Subic Bay Maritime Conference and Exhibit

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The 2nd Subic Bay Maritime Conference & Exhibit

Subic Bay: Your Gateway To Northern Luzon

THE COST OF SHIPPING

Major vehicular traffic

City not master planned

Master planned by USA

Road construction projects

Robust economic growth

Ocean Freight (From Belawan)

Php 3,727.00 plus

Php 539.73 plus VAT

First 5 days free*

First 5 days free*

6-10 Php 481.30 plus VAT(Php 539.05)

Second 5 days free*

10% increase every 10th day thereafter

*Note: If container remains over 5

*Note: If container remains over 10

Php 31,350.00 plus VAT

Php 18,000.00 plus VAT

Php 13,050.00 plus VAT

Php 41,250.00 plus VAT

Php 41,250.00 plus VAT

Php 6,500.00 Non-VAT

Php 44,400.00 plus VAT

Php 18,000.00 plus VAT

Php 36,750.00 plus VAT

Php 28,000.00 plus VAT

Php 10,000.00 plus VAT

Php 29,000.00 plus VAT

First 5 days free

First 5 days free

Import Assumptions & Scenarios

Manila B Manila C Subic

Days for trucking &

Days for empty

Days for handling

US$ 545.00 US$ 300.00 Php

US$ 545.00 US$ 300.00 Php

US$ 545.00 US$ 300.00 Php

Php 32,480.00 Php

US$ 750.00 US$ 0.00

US$ 545.00 US$ 300.00 Php

US$ 545.00 US$ 0.00

Import Scenario Summary

Manila D Like Subic

Subic Stabilized Rates

Actual Case Study

Arrastre & Wharfage

Duties & Taxes

Php 3,043.00 plus VAT (Php 3,408.16) Php 1,521.45

First 5 days free

First 5 days free

6-10 Php 60.15 plus VAT (Php 67.36)

Second 5 days free

Php 31,350.00 plus VAT

Php 18,000.00 plus VAT

Php 13,050.00 plus VAT

Php 41,250.00 plus VAT

Php 41,250.00 plus VAT

Php 6,500.00 Non-VAT

Php 44,400.00 plus VAT

Php 18,000.00 plus VAT