Abstract

The fiber of PPA-PMO CDO’s port in public service is all about the clients - where
they can get a smooth, productive, and hassle-free enterprise from their cargoes. In
essence it is all about time, cost and quality of service - how quickly the clients can do
their business with a port, what it will cost, how well-informed they are about each step
in the process, how accurate is the information associated with their billing and how
safe and secure are their products and their transactions. All of this revolves around
ABCO, which clearly is getting most of the demands in cargo transactions and serving
the public.

The paper first cites PPA’s early computerization phases, how its implementation
began, and the regressive impact it made, forcing the GOCC to create initiatives in
attempting to alleviate complications. The result is a contract with UNISYS to continue
the project. From this, it is expressed how officers in ABCO usually operate in sync with
the harbour department and with each other using the implemented UNISYS computer
program.

The roles of stakeholders are also defined. They have varying objectives and
interests within the office, which sometimes at some point, overlap and create
conflicting mechanisms.

The foremost intention of this study is coming up with positive recommendations

to improve the operational mechanisms of ABCO. My study concludes with some
initiatives to guide ABCO’s efforts in coping with its new role in a more modernized
environment. I envision four possible approaches to having a resolution to the
problems: (a) a web-based, streamlined terminal operations policy; (b) improving or
upgrading the available internet services; (c) shipping companies’ initiatives for re-
structuring their systems mechanism; (d) PPA-PMO CDO mass hiring by outsourcing or
otherwise; (e) personnel schedule adjustments and; (f) capacity-building.
Introduction

Ports are the link between maritime and land-based trade. Traditionally ports were
located where the geography was favourable. In some cases this meant that the coastline at that
point provided a sheltered anchorage, Sydney and Freetown in Sierra Leone are examples. Other
ports were located near the mouths of rivers, enabling river and sea traffic to meet. The one in
Cagayan de Oro is an example. Others are to be found on straits between landmasses like
Istanbul or where major trade routes pass such as Singapore. These advantages resulted in many
ports becoming major cities. The convergence of land and sea trade encouraged the growth of
industrial and commercial activities in the area, so that many ports became major economic and
industrial centers.

During the last few decades, however, ports have changed. As trade and industry grew, so
did the traditional city-center ports became too small and congested to cope with demand. The
Cagayan de Oro port in Macajalar Bay eventually became alive and busy, becoming the largest
in terms of revenue, facilities and serviced clients in Northern Mindanao. This supports and
encourages commercial activities in the region and the surrounding areas. Ships and their
corresponding cargoes grew in size and number. Services should meet this increasing demand. In
this regard, a 150-meter wharf is currently being constructed. When completed, the total berth
length would be 1,068.00 meters. It is an obvious sign for things to come. And in preparation,
PPA-PMO CDO is gearing to handle a wide variety of cargoes from a broad spectrum of
business owners and port users. This is the trend slowly happening in the Port of Cagayan. But
experience showed that in addition to physical changes, we need to reconsider our approach to
the regulations and paperwork involved in trade. For there is little doubt that in some cases trade
is being held back by practices that are no longer suited for modern conditions. Most regulations
are essential - but sometimes they come to be not only unnecessary but as a positive burden on
the activities we are supposed to control. As the main forum for business transaction in Port of
Cagayan, the ABCO (Assessment, Billing and Collection Office) must be significantly
strengthened soon to not to get overrun by the upcoming developments.

History

Prior to the creation of PPA, port administration in the Philippines was merged with the
traditional function of revenue collection of the Bureau of Customs (BOC). Port and harbor
maintenance was the responsibility of the Bureau of Public Works (BPW). In the early 1970's,
there were already 591 national and municipal ports plus 200 private ports scattered all over the
country necessitating the need for long-range planning and rationalization of port development.

There was an identified need to integrate and coordinate port planning, development,
operations and regulation at the national level. Around this time, the Bureau of Customs had
proposed to the Reorganization Committee and to Congress the creation of a separate
government agency to integrate the functions of port operations, cargo handling and port
development and maintenance to enable the Bureau to concentrate on tax and customs duties
collection. Moreover, the World Bank, as a condition for the grant of a port development loan in
1973, stipulated the creation of a port authority to oversee the implementation of projects under
that loan.

Realizing that the establishment and operation of port authorities in other countries led to
improved port operations, it was felt that the same benefits could be derived with a national port
authority to administer and manage the country's ports. Hence, the Philippine Ports Authority
was created under Presidential Decree No. 505 which was subsequently amended by P.D. No.
857 in December 1975. The latter decree broadened the scope and functions of the PPA to
facilitate the implementation of an integrated program for the planning, development, financing,
operation and maintenance of ports or port districts for the entire country. In 1978, the charter
was further amended by Executive Order No. 513 the salient features of which were the granting
of police authority to the PPA, the creation of a National Ports Advisory Council (NPAC) to
strengthen cooperation between the government and the private sector, and the empowering of
the Authority to exact reasonable administrative fines for specific violations of its rules and
regulations. By virtue of its charter, the PPA was attached to what was then the Ministry of
Public Works and Highways (MPWH) which also served as the executing agency for all port
construction projects. Under this set-up, PPA prepared the general plans, programs and project
priorites while the MPWH was responsible for detailed engineering, actual construction and/or
supervision of port construction projects.

The PPA was subsequently removed from under the jurisdiction of the MPWH (DPWH)
and attached to what is now the Department of Transportation and Communications (DOTC) for
policy and program coordination. Subsequently, by virtue of Executive Order No. 159, which
was issued in 1987, the PPA is now vested with the function of undertaking all port construction
projects under its port system, relieving DPWH of this responsibility. The executive order also
granted PPA financial autonomy.

PPA-PMO CDO

The development of the port of Cagayan de Oro came in two packages. In 1977, the
construction of Phase I commenced and was completed in 1980. The port construction was
worth P52.31 million. Operations experience the easing of both berthing and storage congestion
suffered in the preceding years.

The new port is a major takeoff from the old wooden port. The combined spaces of th
whole wharf (Phase I and Phase II yield a total area of 18.66 hectares. The infrastructure has
completely changed the features of the port from a very limited operational site into a wide,
modern and advance port complex.
The ABCO Synergy

ABCO is where you have your cargoes transacted, assessed and billed1. Located inside
the PPA-PMO building, it is open twenty-four hours, three hundred and sixty five days a year.
More often than not the transaction process is smooth. Although during peak hours, about 10:00
a.m. to 4:00 p.m., things could really get crowded2. Transactions are generally processed through
the PPA online computerized system (Appendix). However in cases wherein the internet provider
or the UNISYS systems program is unavailable, a breakdown of the computers’ hardware or
software, or an event of a blackout, then the ABCO assessment and billing processes can be
managed manually (Appendix).

Harbor Factor

Although not technically part of ABCO, the Harbor Department sort of determines the
start of the assessment of cargoes in the PPA. Each docking vessel submits a final manifest
report3 and a filled-up Notice of Arrival and Application for Berth/Anchorage form to the Harbor
Department supposedly two days prior its actual dockage (at berth or anchorage). The latter
carries with it the vessel’s relevant information (Appendix), which the Harbor Master then
1
Comprised of one to three TOO’s (Windows 1 to 3), one to two Cashiers/Collectors (Windows 4 to 5), and one
Gatepass Collector in Window 6.
2
The schedule and number of arriving/departing vessels correlates with the peak hours.
3
This shows the needed data on all the ship’s cargoes: BL no., Shipper, Consignee, Description, measurements,
voyage no., date of arrival, port of origin/destination, and the shipping company.
encodes into the Port Operations Management System (POMS). This generates the Ship Call
Number (SCN) and serves as the base information used in assessing the cargoes for further
assessment and billing in ABCO.

The Hardy Terminal Operations Officers

The actual assessment is done by the Terminal Operations Officers (TOO’s). They use
appropriate rates and computations for varying transactions (Appendix). From millions of pesos
worth of 40-footer foreign containers to just the current minimum charge of Php22.85, they are
able to adjust instantly and constantly. The multi-tasking nature of their function requires them to
be flexible, inquisitive, alert, responsible, spontaneous and assertive.

After the twelve-digit SCN is generated into the system by the Harbor Master, the TOO
on duty can then encode the given data from the port user’s Bill of Lading into the POMS. This
records the computed cargo assessment into the system and allows for the issuance of a Cash
Invoice to the said cargo. This, along with the Bill of Lading, Arrastre Cash Invoice, and
Withdrawal Slip (for withdrawing cargoes), is passed on to the Cashier/Collector.

Collection

Using the recorded data in the system and the issued Port Operations Cash Invoice by the
TOO, the Collector can then determine the amount to be paid by the port user for his/her cargo.
After the payment is done, the Collector hands over to the customer his/her copy of the PPA
Official Receipt and Port Operations Cash Invoice. These papers, along with his/her copy of the
Withdrawal Slip (if withdrawing cargoes), Bill of Lading, and Arrastre Cash Invoice are checked
by the security guards and Gatekeepers for the Entry or Exit of cargoes, whichever is applicable.

To those who do not have gatepass stickers on their vehicles and need to access the port
by means of a vehicle, they would have to buy their Vehicle Passes from the Gatepass Collector
at Window 7. Without it, they cannot enter the gate. Each type of entering vehicle has its own
corresponding rate and charge (Appendix).

Aside from cargoes, they also collect charges from PPA’s services to the shipping vessel
itself (Appendix). Dues from violations, access to the photocopying machine, dangerous cargoes,
excess storage use, and the like are also collected.
The Computerization Project

The PROMPT

In 2002, the PPA started its program called PROMPT (Providing Reliable Operations and
Management of Ports Thru Technology) that covers the automation of the PPA’s business
processes across functions. These processes and functions include the Port District offices to Port
Management offices, and the head office operations in Manila. One of its components is the
accounting and financial management system, which deals with the accounting and financial
management processes.

Contract with UNISYS

PPA planned in gearing to fully realize its modernization project by 2006. It ventured
beyond PROMPT to look for better, more sustainable options. The technology firm, UNISYS
Philippines, was contracted to modernize the state ports’ operations and collect more money. The
PPA has earmarked about P141 million in 2006 to establish its project in all over more than a
hundred ports in the country that it owns and operates.

UNISYS is not perfect

A report by the Commission on Audit (COA), however, showed that some reports using
the computerized system in 2006 from North Harbor and PPA’s port management office in Davao
were “inaccurate” and caused an unrecorded PPA income of P5.35 million.“Management [PPA]
explained that the facility for the ageing schedule of accounts receivable is available in the
computerized system. However, the completeness and correctness of the reports generated in the
system cannot be ensured with several problems encountered in the modules on Port Operations
Management System [POMS] and the Accounting and Financial Management System
[AFMS].”4 COA advised PPA management should require the Unisys, the contractor for PPA’s
computerization project, to enhance the POMS and AFMS modules in order that the Statements
of Accounts of clients are reconciled with the balances of debtor’s accounts appearing in the
Ageing Schedule of Receivables.5

Developing Alternatives
Web-Based and Streamlined Terminal Operations Policy

Quoting Process

4
COA PPA Financial Report, 2006
5
VG Cabuag, BusinessMirror, 2007
 After reservations are made through the PPA-PMO CDO’s website traffic center, the
quoting process can give customers or port users an estimate of costs long before they enter the
port. An entry in the reservation request turns it into an estimate where more detailed needed
calculations can be applied. Each ship call is treated like a project in itself. Based on the services
needed and/or requested and accurate information on the vessel, cargo and activity involved,
ABCO can generate the proper issuance procedure and send by email, fax, or just leave on line
instant messages the estimated amount that the client may expect to pay.

Billing Process
When a vessel arrives in a port, a single click by the port operations manager turns their
estimate (or their reservation request if they did not request an estimate) into a Sales Order.
Every item of billable service can be recorded using the tariff schedule built into the database
manager, and customized calculations for discounts, mark-ups, and rates based on all types of
units of measure this port uses to do business. As items in the sales order are complete, invoices
can be issued on the completed items long before the vessel departs the port. Harbour fees,
berthage, and utilities services may be billed in advance of completing the processing of
wharfage of manifests billing.

Collections Process

The invoices may be delivered as email, PDF-attached files, faxes, or traditional mail
invoices. Customers can pay by credit card on-line, wire transfer, ACH or check. The Collections
Officers handle all of these transactions.

Financial Control Center

Clients of the seaport experience a real ROI since they can now manage 24/7 their own vessels
reservations, monitor the movement and activity while in the port. For instance if the port has web-cams
they can click on the berth where loading and unloading is in progress and view the activity. Clients can
also view estimates of expense before they enter the port and pay their deposits and fees due on-line to the
port.

Your Seaport ROI is greatly increased with no hardware or software to install or maintain and
happy satisfied, informed customers. The seaports real-time reporting system keeps them totally
on top of their financial condition and audit ready at all times. Setting up the chart of accounts,
fiscal year, tariff schedule, bank reconciliation interface, and reporting services essential to a
clean internal and external auditing process are easy in i-Seaports.
Real IT ROI
Satisfied Clients Online 24/7
The competition among ports for business is all about the clients - where they can get the best
ROI. ROI is all about time, cost and quality of service—how quickly the client can do their
business with a port, what it will cost, how well-informed they are about each step in the process,
how accurate is the information associated with their billing and how safe and secure are their
products and their transactions. i-Seaports provides this ROI to your clients 24/7 in its Software
Oriented Architecture.
Seaport Reduced IT Costs and Worry
Building your annual Seaport IT budget just became simple - just leave off upgrade costs, web-
servers, backup service, and website hosting. These are all integral to i-Seaports. One budget line
gets them all. You only have to determine the number of "employee" users. Furthermore, i-
Seaports charges your customers nothing so if you have 1000 clients you want to charge for
using this service you can recover your own costs or even profit from this IT investment.
Strong Support & IT Security
i-Seaports is an Oracle database engine hosted by Level 3 Communications (L3) behind a secure
fire-wall with an unprecedented performance record.
Streamlined Billing & Collections Processes
The Quoting Process
After reservations are made through the traffic center, the quoting process can give a customer an
estimate of costs long before they enter the port. A single click of the reservation request turns it
into an estimate where more detailed calculations can be applied. Each vessel call is treated like
a project in itself. Based on the services requested and accurate information on the vessel, cargo
and activity involved, i-Seaports can generate and send by email, fax, or just leave available on
line an estimate of costs that the client may expect
The Billing Process
When a vessel arrives in a port, a single click by the port operations manager turns their estimate
(or their reservation request if they did not request an estimate) into a Sales Order. Every item of
billable service can be recorded using the tariff schedule built into the inventory manager, and
customized calculations for discounts, mark-ups, and rates based on all types of units of measure
this port uses to do business. As items in the sales order are complete, invoices can be issued on
the completed items long before the vessel departs the port. Harbour fees, berthage, and utilities
services may be billed in advance of completing the processing of wharfage of manifests billing.
The Collections Process
The invoices may be delivered as email, PDF attached files, faxes (using built in telephony), or
traditional mail invoices. Customers can pay by credit card on-line, wire transfer, ACH or check
and i-Seaports handles all of these transactions.
Ecommerce Marketing Center
i-Seaports offers extensive marketing advantages for building your port’s business. In addition to
a complete Customer Relations Management (CRM) integration, built-in Ecommerce, web-store
and web-marketing with their reporting and statistical analysis capabilities give you a
competitive edge over other IT solutions.
-Seaports begins and ends with winning, and retaining customer loyalty. Over time your seaport
builds an incredible source of knowledge about every aspect of its business activity and
international trade relations collected in one centrally integrated database. This centralized data
store is a goldmine for internal analysis for planning the future of your business, and external
marketing campaigns and presentations of performance and capabilities in marketing your port’s
services.
Market Driven Environment
Internal Market Focused Processes Empower
Everyone in the enterprise has some relationship with every customer - traffic, communications,
security and finance - and i-Seaports enables you to see and manage that effectively. i-Seaports
enables you to move from an environment of running processes in compartmented vacuums to
treating them as inter-related flows. It enables you to interact with people, processes and
technologies across the entire organization to get your job done, help them do theirs and maintain
high levels of customer satisfaction.
External Market Development Strategy
i-Seaports real-time data from all areas of the port enterprise are centralized in one database —
all transactions, entities, and reports. These can be customized into snapshots and graphs on key
performance indicators and provided through a secure, role based user access. This allows the
seaport enterprise to spend more time growing your business and less time analyzing and
gathering data from desperate sources. The net result is:

• Better informed and more timely decision-making capabilities

• Greater flexibility to deal with your dynamic, competitive landscape
• Real-time notifications that improves workflow efficiency

Web-presence Publishing and Campaign Advantage

i-Seaports integrated standard and ad-hoc reporting tools let you tap the wealth of information your port
already has. Custom tables for berth, cargo, and trade partner analysis provide the basis for targeting new
clients and planning your seaport’s development. Not only can your users get the reports they need but
you can publish to the integrated Ecommerce Web-site reports, tariff information, property and leasing
opportunities for the public.

Customer Relations Focus

Customer Relations Management (CRM)

i-Seaports provides Sales, Marketing, Service and Extended Enterprise management in one complete
solution. By going from multiple disparate systems to one complete solution, you will experience the
results of increased visibility into your entire business, more timely decision-making, streamlined
workflow, and reduced costs.

Lead Generation to Satisfied Customer

i-Seaports allows you to run all processes, from lead generation to the sales, to booking, and to ongoing
customer service in one solution. It further allows all employees in sales, accounting, marketing, and
management to be working in and viewing one set of data regarding any customer.

The Customer as 24/7 Partner

From the customer point of view, they experience themselves as a partner, not just a billable client. i-
Seaports provides low cost, high touch e-commerce and customer interaction. Service is 24/7 with this
web-based solution. Every phone-call, fax, email, meeting and event involving this customer is at their
fingertips for continuous interaction in the business process.

Global Trade
Seaport Trade Partnerships are Global
Every enterprise today must think globally to survive. Every enterprise is looking for that trading
partner advantage in other countries that will let them succeed. Capturing and retaining their
business for your seaport depends in large part on how well you can present the assets you
already have, and how well you plan and project your future development to retain their loyalty.
ERP and CRM are Key to Market Share
Global competition is driving enterprises to achieve new levels of efficiency and economies of
scale to gain market share. Enterprise Resource Planning (ERP) and management are
requirements to be in the game. i-Seaports Accounting platform with its Ecommerce focus is
built from this clear understanding. It serves everyone from the dockworker in their own
language, to central governments who require global currencies and removes those barriers to
global trade.
24/7 Operation is Mandatory
Morning here is evening and midnight is noon in your customer's location. The need for a trade
management environment that is available and visible to all 24/7 is no longer optional -- it is
mandatory. i-Seaports communications, instant notifications, remote management and online
24/7 user access meets the requirement. Remote surveillance by port personnel from wherever
they are and collaboration with security and intelligence, is implicit. Client ability to monitor
their own activity interactively with your seaport is the answer.
 Acronyms

ABCU - Assessment, Billing, and Collection Office

BL - Bill of Lading
CI - Cash Invoice
CBM - Cubic Meter
ETA - Expected Time Arrival
ETD - Expected Time Departure
GOCC - Government Owned and Controlled Corporation
MC - Minimum Charge
MIS - Management Information Systems
NOA - Notice of Arrival
OR - Official Receipt
PM - Port Manager
PMO - Port Management Office
PCCS - Port Charges Computation Sheet
POMS - Port Operations Management System
PPA - Philippine Ports Authority
PROMPT -
PSD - Port Services Division
ROI - Return of Investment
RT - Revenue Ton
RRTS - Roll-on Roll-off Transport System
STOO - Supervising Terminal Operations Officer
TOO - Terminal Operations Officer

Definition of Terms

Anchorage - a place with sufficient depth of water where vessels anchor or may ride at anchor
within the harbor.
Berth - part of the pier/wharf that occupied by a vessel, or a place where a vessel may tie up.
Bill of Lading - the written contract of carriage of goods whereby the common carrier for a
consideration agrees to deliver on behalf of the consignor of goods to the consignee at a specified
time.
Container - means any structure so designed to hold and keep articles, materials and products
together inside a hold in a form of boxes, tanks, or the like for singular or unit handling and
transport.
Containerized Cargoes - cargoes packed in containers for easy handling or transportation of same
as a unit.
Domestic Cargoes - cargoes brought to a pier, wharf or bulkhead to and from a port within the
Philippine waters.
Export Cargoes - cargoes brought to a pier, wharf or bulkhead intended for shipment to a foreign
port.
Computerization - to control, perform, process, or store (a system, operation, or information) by
means of or in an electronic computer or computers.
Goods - includes animals, carcasses, baggage, and any movable property of any kind.
Harbor - protected part of a sea, lake, or other body of water used by vessels as a place of safety.
Rates - means any rates or charges including any toll or rent under existing law or imposed by
the PPA for facilities used or services rendered.
Revenue Tonnage - means 1,000 kg’s. or 1.1326 cubic meters (40 cu. ft.) whichever yields the
greater amount of revenue.
Port District - It is a territorial jurisdiction under the control, supervision or ownership of the PPA
over an area (land or sea).
Cargo Manifest - a list of the cargo carried by a ship, made for the use of various agents and port
officials.
Minimum Charge - it is the least amount of payment due from port users based on prescribed
rate.
Outstanding Invoice - remaining unsettled or unpaid itemized bill for goods sold or services
provided, containing individual prices, the total charge, and the terms.
Port - a place where ships may anchor or tie up for the purpose of shelter, repair, loading or
discharge of cargo, or for other such activities connected with water-related commerce, and
including all the land and water areas and the structures, equipment and facilities related to these
functions.
Port User - a paying customer engaging with any of the products and services offered by PPA
and its constituents.
Vehicle Pass - a piece of ticket which allows rolling vehicles to enter the port premises.
Voyage - a course of travel or passage by a ship from one port to another.
Wharfage - is a charge on all cargoes on the basis of the total metric or revenue tonnage,
whichever is applicable.
Stevedoring - a firm or individual engaged in the loading or unloading of a vessel.
Stripping - means unloading goods from a container.
Stuffing - means loading goods into a container.

Appendices

Schedule of Passenger Vessels

Port of Cagayan de Oro
As of January 17-31, 2008
DAYS NAME OF VESSEL ETA ETD LASTPORT NEXT PORT

Monday Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Princess of Paradise 0500H 1000H Manila Cebu-Manila

Dona Rita Sr. 0530H 2000H Jagna Cebu

Super Ferry 12 1700H 2145H Manila-Cebu Cebu-Manila

 Tuesday Princess of the South 0600H 1930H Cebu Cebu

Asia Hongkong 0600H 1900H Tagbilaran Tagbilaran

Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Our Lady of the Rule 0630H 2000H Cebu Cebu

Wednesday Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Dona Rita Sr. 0600H 2000H Cebu Cebu

St. Joseph The Worker 0400H 1400H Mla-Bac-Ilo Ili-Bac-Ilo-Mis

Super Ferry 02 1000H 1445H Manila-Ilo BXU-Cbu-Mla

Super Ferry 09 1000H 1445H Manila-Ilo BXU-Cbu-Mla

Thursday Princess of the South 0600H 1930H Cebu Cebu

Asia Hongkong 0600H 1900H Tagbilaran Tagbilaran

Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Our Lady of the Rule 0630H 0830H Cebu Jagna

Our Lady of Rule 2130H 2359H Jagna Dumaguete

Friday Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Dona Rita Sr. 0600H 2000H Cebu Cebu

Princess of Paradise 0500H 1000H Manila Manila

Our Lady of the Rule 1800H 2230H Dumaguete Cebu

Super Ferry 12 0600H 1045H Mla-Cbu-Sug Cebu-Manila

Saturday Princess of thlo-Manilae South 0600H 1000H Cebu Jagna

Asia Hongkong 0600H 1900H Tagbilaran Tagbilaran

Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Super Ferry 02 1600H 2045H Mla-Cbu-Bxu Iloilo-Manila

Super Ferry 09 1600H 2045H Mla-Cbu-Bxu Iloilo-Manila

Sunday Princess of the South 0300H 1930H Jagna Cebu

Dona Rita Sr. 0600H 1200H Cebu Jagna

Trans Asia 1 or Asia China 0600H 2000H Cebu Cebu

Our Lady of the Rule 0630H 2000H Cebu Cebu

Appendix
Vehicle Pass Rates

Wheels Amount with VAT

Four Php5.60

Six Php11.20

Eight, Ten, and Php16.80

above

Appendix