The Big Picture from Cagayan de Oro Seaport – Finding Solutions Beyond Infrastructure for Present and Future

Jul 8, 2017

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“Use it up, wear it out, make it do, or do without.”

― Boyd K. Packer

 

This famous quote by Mormon leader and educator Boyd K. Packer best sums up the philosophy of Cagayan de Oro’s Macabalan Port management team when faced with the challenge of turning around the congested facility into a model of efficiency and resourcefulness.

 

National Economic Development Authority (NEDA) Region 10 Director Leon Dacanay Jr. said Metro Cagayan de Oro is envisioned to become the Philippines 4th Metropolitan Center by 2025 along with Manila, Cebu and Davao, based on the National Spatial Strategy proposed network of settlements under the 2017-2025 edition of the Philippine Development Plan.

 

As a Metropolitan Center, Cagayan de Oro would serve as a center of commercial, financial, and administrative activities and a primary international gateway.

 

Port Manager Bong Butaslac presides over a meeting with the QMS-VEC External Audit with TUV Rheinland last 02 May 2017.

Port Manager Bong Butaslac presides over a meeting with the QMS-VEC External Audit with TUV Rheinland last 02 May 2017.

When Port Manager Isidro V. Butaslac, Jr. assumed office in November 2014, the port was so congested with infrastructure and operational constraints it didn’t seem possible it could be a factor in helping attain the NEDA vision.

 

Ship calls were dropping 6 percent, gross registered tonnage (GRT) had zero growth, waiting time had ballooned to 74 percent and passenger traffic on a downtrend with the steady growth of container volume the only positive note.

 

Worse, there was congestion all over: at the quay, at the gates,at the container yards where containers were piling up, and at the Macajalar Bay where incoming vessels were queuing while waiting their turn to berth. Not surprisingly, truckers, shippers and ship operators began looking elsewhere for more efficient and less costly options.

 

Yet, ship calls rose 10 percent by 2015, and further to 20 percent last year. GRT spiked to 22% before settling to 9 percent, waiting time increased to 159%, passenger traffic was up 5%, cargo volume by 13% for two straight years, and container traffic continued its double digit ascent with 15 and 20 percent growth.

 

CDO Port Performance at a glance.

CDO Port Performance at a glance.

When Butaslac reported the port’s performance during the Philippine Port Authority’s annual managers conference in 2016, he was asked how Cagayan de Oro PMO attained its unprecedented revenues and operational performance despite all the constraints.

 

“We attained revenues of P308,720,318 in 2016, a 16.25%  increase over the previous year, handled total cargo throughput of 8,618,701 metric tons (MT), total ship calls of 16,558 (an 8% increase) and 2.84 million passengers, (a 15% increase over the previous year),” Butaslac reported.

 

Holistic Solutions

 

The Macabalan Port management team strategized three solutions to address its urgent and long term problems.

 

Panoramic Aerial View of Cagayan de Oro Macabalan Port

Panoramic Aerial View of Cagayan de Oro Macabalan Port

First, the team proposed “people solutions” by getting all stakeholders to buy into a long term vision for the port the way they liked it to be. Butaslac met with the Philippine Liners Shipping Association (PLSA) to discuss their problems and crafted a long-term infrastructure development plan dubbed “7 Pillars of Development”. The Port Management Advisory Council was expanded and strengthened as the Port and Maritime Advisory Council (PMMAC)  to endorse the programs for the entire jurisdiction from Laguindingan to Balingoan, Misamis Oriental.

 

“We also asked our people to adopt a new mind set and understand this was the best way forward,” Butaslac said. “For instance, we are ISO 900:2008  certified for vessel entrance and clearance. Unless we issue the clearance in 3 minutes, we lose our accreditation. We are also certified for Port Safety, Health and Environmental Management System (PSHEMS) which is equivalent to Environment Management Systems ISO 14001:2004 and Occupational Safety & Health Assessment Series (OHSAS 18001:2007, and ISO 9001:2008. These accreditations set standards for performance by our people.”

 

Next, the team instituted Systems and Procedures and Processes for vessel and cargo processing.

 

For instance, Butaslac instituted Daily Berthing meetings and Daily Vessel Pre-planning. A PPA unit meets daily with vessel agents, representatives, and owners daily to discuss the Estimated Time of Arrival, Availability of Berths, Departing and Arriving vessels.

 

“Every stakeholder is furnished the berthing minutes by email so everyone remains informed wherever he is in the world provided he has an internet connection,” Butaslac said.“The minutes form the basis for vessels’ berthing guide and berthing permit so you know when and where your vessel will be accommodated in the dockside berths.”

 

In a controversial move to optimize space for cargo processing, the PMO let lapse all leased areas within the port proper used by shipping firms as container yards effective January 2016, resulting in a gain of 18,224 sq.m. without constructing a new back up area.

 

“Thus, while the wharf extension and reclamation was ongoing, we instantly had a surplus area that we developed as a back-up area for container handling. By dedicating Berths 8,9 and 10  exclusively for container handling, we increased containerized cargo throughput resulting in revenues which more than made up for the foregone revenues from leases of shipping companies. From a 50/50 ratio of container  vs. conventional cargo packaging ratio, the port is now looking at a 70/30 ratio that is still increasing,” Butaslac said.

 

Ongoing pile driving works at Cagayan de Oro wharf extension and expansion of back up area

Ongoing pile driving works at Cagayan de Oro wharf extension and expansion of back up area

 

The port has also upgraded its capacity to move containers as well as expanded the area to accommodate containers.

 

“As of June 15, 2017, with the arrival of another Rail-Mounted Gantry Crane paired with 3 Rubber-Tired Gantries (RTGs) deployed by Oroport, Cagayan de Oro Port has a total of four (4) RMGs and nine (9) RTGs,” Butaslac said.

 

The termination of the leases also addressed the proliferation of empty containers which still plagues most major seaports. The team aims to gain an additional 5,040 sq.m. for containerized cargo by moving an existing open transit shed to the reclamation area once it’s completed by year end.

 

But the changes did not come easy. Butaslac said to effectively institute the people measures and the systems, procedures and processes, the PPA employees had to buy into the necessary cultural and organizational changes.

 

“Motivating, patience, mentoring should always be there.  After instituting the measures, I had no doubts revenues would increase even after leases were allowed to lapse.”

 

“Plug the gates, change the guards to effectively implement the innovations inside, it would serve as a filter. From 72 permits in 2013, there are now almost 300 meaning more business permits are being registered, so our increased revenues came from efficiency. Last year we sustained our revenue gains with another 16% on top of 36% from 2015.”

 

MOC 2016 Revenue Curve

MOC 2016 Revenue Curve

An important factor in the gains of the past two years was the PMO’s pursuit of the PPA’s overall strategy of “Ease of Doing Business.”

 

As the pilot area in Mindanao for the Electronic Payments System (e-payment), registered clients can now enter transactions online offsite and pay vessel, cargo charges through the Land Bank of the Philippines. The e-payment Management System makes it very easy to register, that clients now only need 2 documents (from 13 previously, to 6 at the OneStopShop).

 

Engineering solutions

 

For the long term, the PMO team has programmed its 7 Pillars of Development infrastructure program which would not only address but help sustain the region’s growth over the following decades.

 

Exterior Perspective of Cagayan de Oro Passenger Terminal Building

Exterior Perspective of Cagayan de Oro Passenger Terminal Building

To address passenger congestion, a modern P277-million passenger terminal building is now under construction. It is a two (2) story building with amenities like a pre-departure waiting area, shops (catering to passenger needs), screening area (x-rays), comfort rooms (male, female & PWD), boarding gates, escalators and moving sidewalks, and others. It will be the most modern passenger terminal facility in the country when completed early 2018.

 

 

Putting Things in the Right Places

 

To address berthing congestion which was already over 100% as far back as eight years ago, the PMO has segregated berths according to the type of cargo of the berthing vessel:  Berths 1 to 6 for break bulk; 8,9, and 10 for containerized; and bulk liquids, solids at the end 12 & 13 for deep draft vessels.

 

“By putting things in the right places we aim to optimize cargo handling and vessel turnaround,” Butaslac explained.”To make the port even more attractive to users, we are undertaking dredging to a uniform depth of 13 meters that meets international standards.”

 

Perspective of Break Bulk Cargo Receiving Facility in Area A 1

Perspective of Break Bulk Cargo Receiving Facility in Area A 1

As a complement to the berthing classification, the PMO is constructing a break bulk receiving facility at area “A” to enhance palletizing operations, ensure and improve safe and healthy working conditions, and preserve break bulk, perishable cargoes from hazards and extreme weather. 

 

“This will handle lanzones, tomatoes, and vegetables mainly shipped to and from Cebu and Boholby Cokaliong and Trans Asia Shipping Lines,” Butaslac noted.

 

The project is situated about 200 meters from where Mediterranean type vessels carrying cargoes to be palletized are berthed. Trucks will not enter port area so not congest port area.Security, congestion, personnel, and safety concerns minimized since trucks will not have to enter the port proper, only forklifts to handle pallets.

 

On top of segregating the berths, the quay which has never been extended during the last six years until 2015 was extended by an initial 45 meters and is now undergoing an additional 85 meters extension to be completed by year end 2017. As presented in the RDC/NEDA 10 Infrastructure Committee, the port’s berthing facility will be lengthened up to 700 meters over the next 20 years.

 

To address space congestion within the port an additional 130m x 110m back-up area is now 51.312% project accomplishment as of February 25, 2017 for the three hectare area.

 

To attain an efficient flow of vehicular traffic, the PMO will undertake the construction of a 6-lane electronic multi-gate system by Oct 2017 through Gate 5 leading to Arcadia Valenzuela Avenue in  Lapasan.

 

Perspective of 6-lane electronic multi-gate system

Perspective of 6-lane electronic multi-gate system

The 6-lane, ISPS compliant, Electronic Gate Complex aims to provide 6 lane controlled access to port users and eliminate long queues at the entry point.  This facility will be fully equipped with CCTV cameras, weigh bridges for cargoes, electronic gates, payment booths. The EPS will be embedded as part of system (RFID) and will be the first of its kind in the country.

 

Not the least, the PMO has undertaken to replace its lighting system using solar powered LED lighting help reduce power costs and pilferage of power cable wires.The project is 100% completed last 11 December 2016.

 


Beyond the horizon

 

Beyond the confines of the immediate port area, the PMO has also sought to alleviate road congestion in its entry/exit points by undertaking three key projects situated outside the city.

 

First, the Opol port zone delineation and port development project will address congestion in the West coast highways by handling all incoming cargo from the Western Misamis Oriental and Iligan City.

 

Map of Opol Delineation and Port Development Project

Map of Opol Delineation and Port Development Project

The development and construction of Opol Port will decongest Cagayan de Oro Port by handling tramping vessels at Luyong Bonbon, Opol, Misamis Oriental, thereby relieving the arterial roads to the port of the truck traffic and the port itself of these types of vessels. Initial site assessment was conducted by DENR-EMB last February 28, 2017 and it is targeted for completion by 2018.

 

Further down the road, the PMO is already starting the delineation and development of a new port in Laguindingan, Misamis Oriental with the conduct of Topographic, Hydrographic and Port Zone Delineation Survey.

 

These are the initial steps in conceptualizing a port facility that would be best suitable for the Port of Laguindingan envisioned to eventually accommodate a cruise ship terminal in addition to a fast ferry terminal.

 

Map showing Laguindingan Port Delineation Project in relation to Laguindingan International Airport

Map showing Laguindingan Port Delineation Project in relation to Laguindingan International Airport

To decongest trucks hauling cargo for the port originating from Eastern Misamis Oriental, the PMO will construct a new portal at Gate 6 directly connected to the CDO Coastal Road via an access road through the DPWH’s “Roads Leading to Ports Program.”The two lane access road just completed will originate from the 3-ha. reclamation area now under construction and Gate 6 will eventually be upgraded to an Electronic 6-gate with embedded EPS similar to Gate 5.

 

In addition, the PMO has undertaken the Phase 1 development of the port development of Balingoan Port with the construction of an alternative access road and security fence along the port zone delineation area, expansion of the existing passenger terminal building and additional ground slots for rolling cargo.

 

Also slotted for further development is the Phase 2 of the Benoni Port in Camiguin (Phase 2) provide additional back-up areas, additional berthing facilities and provide additional port facilities for passengers and port users in support of the growing tourism and economy of the area.

 

“While all these infrastructure projects are pending completion, the Port of Cagayan de Oro is continually innovating and seeking temporary alternative processes to address the impact on vessel traffic congestion by delineating berth spaces for priority vessels, infusion of additional modern port machineries and equipment, implemented the observance of load cut-off time, and installation of AIS technology for safety, security and advance planning on berth allocation,” Butaslac said.

 

“The port’s marketing viability has grown as existing shipping lines considered plying new routes and deployment of additional vessels; Cokaliong and Fiesta Shipping are increasing ship calls to daily; Meridian Shipping now ships its containers here, as have Lorenzo and National Maritime Corp (NMC).”

 

Seems Cagayan de Oro PMO will just have to raise the bar further in the name of progress.

 

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