PROJECT INSPECTION - BATANGAS -- President Gloria Macapagal-Arroyo inspects the on-going construction linking the Southern Tagalog Arterial Road (STAR) to the South Luzon Expressway during her visit Monday (Feb. 8) to Barangay San Rafael, Sto. Tomas, Batangas. With the President in photo are Batangas Vice Governor Jose Antonio Leviste II and Vice President Noli de Castro.

PGMA's legacy: Strong Republic Nautical Highway

BATANGAS CITY – The Strong Republic Nautical Highway (SRNH) is one of the legacies President Gloria Macapagal-Arroyo will leave the Filipino people when she steps down in June.

The disclosure was made by Oscar Sevilla, general manager of Philippine Ports Authority in Batangas City.

According to Sevilla, the SRNH links Luzon, Visayas, and Mindanao via the western seaboard. It connects Manila to Dipolog City in Mindanao, Biliran in Leyte to Surigao City, and Bicol to Cagayan de Oro.

It is thus instrumental in spurring growth in the entire country.

Envisioned as the “highway of the sea,” the 919-kilometer (land) and 137-nautical mile (sea) seamless transport infrastructure network connects the huge consumer markets of Luzon to the agricultural production centers of Mindanao. It reduces the cost of travel by 37 percent to 43 percent for passengers and 24 percent to 34 percent for cargo, and the time of travel by 10 to 12 hours when compared by conventional air and sea travel.

Because of this, Sevilla said, passenger traffic in and around the islands have grown from 2.6-million in 2001 to 4.9-million in 2009.

The infrastructure project has enabled tourist arrivals to breach the three million mark, while total domestic cargo and passenger traffic in 2007 by sea reached 72.8 and 44.5 million (MT), respectively.

The ro-ro (roll on roll off) shipping facilitates much of the traffic.

Traffic between Batangas City port to other SRNH destinations has substantially increased, to 85 sea vessel trips everyday.

Also, the ro-ro network has resulted in the reduction of  port charges, with freight rates now based on the lane meter, which is the actual space occupied by the cargo on the ship, rather than on the tedious commodity classification system. It has also eliminated cargo handling and wharfage.

Because of competition, players in the domestic shipping industry, have improved their operations to improve profitability.

For instance, Aboitiz Transport Service (ATS), in partnership with Maersk Line, has introduced bigger ships to realize economies of scale. As a result, ATS net income grew by 130 percent, with ro-ro contributing much of the profit.

Based on a recent study done by the Center for Research and Communication (CRC), transporting goods via the western nautical highway is cheaper compared to conventional shipping.

For example, transporting fresh fish from Capiz, Iloilo, and Estancia to Manila has become economical.

Fish traders claim they are better off with the multi-trip schedules of ro-ro service compared with the limited daily schedules of big liners. Instead of shipping at the same time, fish traders now time their shipments properly.

The reduction in cost has changed the way shippers transport their goods throughout the country.

For instance, Nestle Phils, a multinational food conglomerate, has closed down 33 of its 36 distribution centers nationwide. It now makes small, frequent and direct deliveries to its clients, thus minimizing the need for inventories.

Universal Robina, which transports its products from its plant in Ugong, Pasig to the rest of the country, now makes 12 trips a day instead of once a week. .  With the expansion of market coverage, the trucking industry is undergoing major transformation as well.

From a highly dependent shipper-client type of operation, the trucking business is expected to evolve into an entrepreneur/ marketing-based type of economic activity, where the truckers actively look for the products to move within and among islands.