Following appeals from local exporters for more vessel space, the first ever Philippine-flag container ship is set to embark on its maiden international voyage, carrying export containers to the United States.

Iris Logistics Inc., a subsidiary of logistics company Royal Cargo, Inc., announced it will hold a virtual maiden voyage ceremony on September 20 to launch its container ship M/V Iris Paoay as she sails to the US.

The news is welcome development for struggling exporters, who in a July 2021 survey conducted by the Philippine Exporters Confederation, Inc. (PHILEXPORT) said the lack of space on international shipping lines is their top shipping challenge today.

In preparation for the container ship’s landmark US voyage, the Bureau of Customs Port of Manila (BOC POM) met virtually with Iris Logistics officials on September 14, 2021.

During the meeting, Iris Logistics requested assistance from the agency for the seamless interface between BOC POM and M/V Iris Paoay, which has a carrying capacity of 1,118 twenty-foot equivalent units of containers.

District Collector Michael Angelo Vargas assured the smooth passage of the containerized vessel that will be carrying export- and import-laden containers to and from the US, and invited the cargo company for a walk-through to become familiarized with the bureau’s processes, BOC said in a release.

“The Port of Manila is ready to hit the ground running. Likewise this would be a big boost for BOC Port of Manila to process goods coming from the USA as currently the bulk of goods that come in POM are from China and the ASEAN region,” Vargas added.

In a related development, Davao-based Reefer Express Line Filipinas, Inc. also announced the start of a monthly service this month from Mindanao to the US to help manufacturers facing global shipping problems.

According to an email provided to Dr. Enrico Basilio, Chairman of the Networking Committee on Transportation and Logistics (NCTL) of the Export Development Council, one of the two ships, named M/V Cool Spirit, will ply the General Santos City-US route, as disclosed in the email by Felix Ishizuka of Reefer Express Line. It has a capacity of about 560 TEUs or 5,600 pallets position or 600 TEUs ondeck capacity. It is set to arrive at the Port of Philadelphia on September 30.

Meanwhile, another of its vessel can carry 700 TEUs capacity and will start sail to the US West Coast from Davao through Thailand on October 5.

Basilio shared the information with PHILEXPORT which had been working with the NCTL and Royal Cargo to respond to calls from shippers for relief from the capacity squeeze.

As part of the intervention, the three groups agreed to propose to government to allow domestic shipping lines to operate beyond domestic waters. Royal Cargo agreed to help by providing its ships to transport export cargoes to their ports of destination.

For the longer term, they are proposing the following:

·         Passage of the Philippine Ship Registry Act which would enable Philippine flag vessels to go international

·         Removal of distinction between "coastwise license" and "international license" for Philippine-flagged ships

·         Securing of government imports through FOB (freight costs are separate from the cargo value of imports) to enable Philippine-flagged ships to participate in the carriage of government cargo

·         Modification and amendment of MARINA Memorandum Circular No. OS-2019-02 to allow Philippine-registered vessels to concurrently be engaged in domestic and international trade

Issues with supply chain disruptions, not just in the Philippines but around the world, have been intensifying, the result of factors such as a surge in global demand, the early resumption of manufacturing in China, port congestion, and the reduction of capacity by carriers in response to lockdowns.

This has led to local shippers being unable to book slots on international container liners and having to face record-high freight rates, which are causing shipment delays and mounting losses for exporters and importers.

PHILEXPORT president Sergio Ortiz-Luis, Jr. earlier said that while these are global issues beyond anyone’s control, the government and private sector must still work closely together to effectively address them.

Business and economic experts sounded an urgent call for emerging economies in Asia

to adopt electronic sanitary and phytosanitary certificates (SPS e-certs) to unlock the

many benefits of cross-border paperless trade in food and agricultural products.

Ronald Antonio Butiong, chief of regional cooperation and integration for sustainable

development at the Asian Development Bank (ADB), said in a recent webinar that

digitalizing trade facilitation procedures is necessary for more inclusive trade and

development.

This is more so in agriculture, on which many developing economies in the region

depend.

Butiong explained: “Cross-border production networks in Asia and the Pacific are

particularly strong in primary goods, including agriculture. In 2019, for instance, Asia’s

global value chain participation rate was about 87% of its gross exports in the primary

sector, higher than all other sectors, and about 70% of this comes from trade within

Asia.”

Switching to SPS e-certs will benefit our economies, enhance trade, and promote rural

employment and the participation of small businesses, he added.

He urged continued support for trade facilitation through enhancing digitalization,

harmonizing policies, and building capacity in customs systems, largely by acquiring the

needed technology and streamlining policies and procedures while promoting

interoperability of ICT systems.

He expressed hope that SPS e-certs will become a reality, noting that “this is a topic

that requires urgent action.”

Yann Duval, officer in charge of trade, investment and innovation at the United Nations

Economic and Social Commission for Asia and the Pacific (UN ESCAP), said SPS e-

certs are among the documents being prioritized by countries implementing cross-

border paperless trade.

This, he said, means that SPS electronic certificates will be a key focus of discussions

when the Framework Agreement on Facilitation of Cross-Border Paperless Trade in

Asia and the Pacific is implemented starting early next year.

The Agreement, a UN ESCAP treaty adopted in May 2016 to accelerate the

implementation of digital trade facilitation measures, entered into force on February 20,

2021.

It aims to promote cross-border paperless trade by enabling the exchange and mutual

recognition of trade-related data and documents in electronic form and by facilitating

interoperability among national and subregional single windows or other paperless trade

systems.

Melvin Spreij, head of the Secretariat of the Standards and Trade Development Facility

(STDF), at the same event noted that governments and industries are actively seeking

solutions to move goods across borders more quickly and efficiently in the wake of the

entry into force of the World Trade Organization’s Trade Facilitation Agreement and as

a result of the impact of the COVID-19 pandemic.

Spreij called for the increased use of electronic certification to facilitate safe trade in

food and agriculture products.

“Paperless sanitary and phytosanitary (SPS) systems can improve traceability

throughout supply chains, cut trade times and costs, lower food waste, reduce

fraudulent certificates and build trust among trading partners,” he said.

Oswald Kuyler, managing director of digital standards initiative at the International

Chamber of Commerce (ICC), said paperless SPS systems offer enormous efficiency,

effectiveness and risk-reduction benefits.

When economies transition to digital trade, it will ensure people’s health and safety by

minimizing of physical contact, promote consumption of safe products, and solve the

trade finance gap for entrepreneurs trying to support their families, he said.

Finally, Hilde Kruse, senior officer at Codex Alimentarius Commission Secretariat for the

FAO/WHO Food Standards Program, disclosed that the Codex Committee on Food

Import and Export Inspection and Certification Systems (CCFICS) has developed a draft

guidance document on the paperless use of electronic certificates, including an

electronic version of the Generic Model Official Certificate.

“It was highlighted that the COVID-19 pandemic had illustrated the importance of

paperless use of electronic certificates and the urgency to complete the revision of the

existing guidelines,” said Kruse.

“Furthermore, this work is according to the CODEX Strategic Plan 2020-2025, which

states that CODEX should address current, emerging and critical issues in a timely

manner.”

Following the virtual presentation of the draft guidance three months ago, the final

version will be presented to the Codex Alimentarius Commission for adoption when it

meets from November 8 to November 18 this year, she said.

The Commission is the global body that develops principles and guidelines for food

inspection and certification systems.

The Codex Alimentarius, or “Food Code,” is a collection of international standards,

guidelines and codes of practice to protect the health of consumers and ensure fair

practices in the food trade. Codex standards are used worldwide to harmonize national

food safety regulations and are recognized as the international reference point for food

safety.

When food producers and traders comply with Codex standards, consumers can trust

the safety and quality of the products they buy, and importers can have confidence that

the food they ordered will meet the specifications.

The Airbnb of luxury luggage, Uber for home massage, and blockchain for pets are just a few recent examples of start-up ideas that make you wonder if the world has run out of bigger dreams to pursue. Indeed, the aggregator business model has disrupted almost any industry, with at least half a dozen companies now competing in every relatively big niche from flower delivery to private jet hailing. The popularity of artificial intelligence (AI) and blockchain then gave birth to another wave of start-ups applying these trendy technologies to just about any area of business. And the rise of telework during the COVID-19 pandemic now brought life to yet another generation of start-ups offering various technologies for improved remote collaboration: those copying Zoom (GoToMeeting), Slack (PukkaTeam), Dropbox (Box and Cloudera) or covering very niche user needs like scheduling a team lunch for a hybrid-working team (Lunch Train).

This makes some observers wonder if Silicon Valley is running out of big ideas. Entrepreneurs seem to hunt for the next niche market where the cookie-cut technological concepts have not been applied yet, unavoidably framing their pitch into a “we are X for Y” pattern. Bold product innovations now seem to be the prerogative of tech giants, while the destiny of start-ups is to supply big players with small process innovations that would be acquired together with the whole company. While this trend might seem like an indication of Silicon Valley’s declining innovativeness, in fact, it is not. Innovation does not necessarily need to completely change the way humans interact with computers, as Doug Engelbart’s ideas - personal computer, hypertext, word processing, teleconferencing, mouse, to name but a few - did.

To pass as “business innovation,” a new product or process needs to differ significantly from what was previously produced by the firm, in its own market, or in the entire world, as Organisation for Economic Co-operation and Development (OECD), the main goalkeeper for measuring innovation on the country level, puts it. Simply put, the same idea applied in a new industry or geographical location can bring significant disruption and thus lead to substantial business growth if it solves real people's problems. When evaluating a start-up pitch, it takes extra effort to judge the idea not by its uniqueness but by its appropriateness to a new market in which it is applied.

In fact, old ideas could potentially yield even better results than in the market they were originally implemented in when brought to the geographies not spoiled with technological improvements. Perhaps, the most prominent “not spoiled” region like this is now in Southeast Asia. Its start-up scene outperformed all other emerging markets in 2020 by raising US$8.2 billion. What’s more, it continues to show a great performance in 2021 as well, setting a record year by raising US$6 billion of venture capitalist (VC) funding in the first quarter alone. The growth of the digital economy in Southeast Asia provides fertile grounds for ventures.

On the one hand, the population is still coming online. In 2020, over 40 million users in six major markets hit the web for the first time, which is 10 percent of all the Internet users in the region. They are not fully covered with the technological solutions mature users are used to, like mobile banking, delivery services, and e-commerce. On the other hand, the population is increasingly willing to pay. According to Boston Consulting Group (BCG)’s 2018 estimates, up to 10 percent of the citizens in the major Southeast Asia economies belonged to what consultancy dubbed “mass-affluent class.” And by 2030, their share in the region might grow up to 21 percent. These 136 million digitally-savvy and premium product-oriented consumers are expected to further drive the demand in the region, along with the projected 350 million middle-income consumers. Combining these two factors provides plenty of opportunities, and there are already many start-ups capturing them. Does this mean that cookie-cutter solutions are enough for these markets? Not really. What you actually need to do is to look at the proven models somewhere else, on the one hand, and analyze the real problems of users in the region on the other hand. And finally, use the former for solving the latter.

In some cases, a slight adaptation of the solution already implemented somewhere else would work. For example, Southeast Asia e-commerce leader Lazada was actually inspired by Amazon, with the initial goal articulated as “becoming the Amazon of Southeast Asia” by riding on the wave of increasing Internet penetration and demand for e-commerce services. Tiki, another e-commerce player in the region, was not only called the “Vietnamese Amazon,” but also started the business as an online bookseller, just like Amazon did. In other cases, a unique user pain might inspire a completely new solution. For example, the Indonesian grocery delivery service Sayurbox got its business idea from observing tens of thousands of small-scale farmers spread across 17,000 islands in the country struggling without tech-savvy logistics solutions. Whereas PayMaya created its mobile banking app specifically for the Philippines market to solve the problems of the unbanked population in the country, which still makes up two-thirds of the nation despite the increasing number of smartphone users. 

But more often than not, the approach can be blended. The two largest and most-awaited IPOs in Southeast Asia this year - Grab and GoTo - are both coming from the companies that started off as an Uber-type ride-hailing platform, developed into a Chinese super-app- type ecosystem, and all along were devoted to solving the problems of their local customers and partners on the ground. While there is no simple recipe for winning Southeast Asia markets, reapplying simple solutions from somewhere else should not be shied away from. Product usage, and subsequently business growth, comes when your idea solves the real user pain. And whether this idea is a globally unique one or another application of the “we are X for Y” pattern - does not matter.

Source: The ASEAN Post