With the threat of losing trade privileges in the EU drawing closer, the government is taking measures to reduce logistics and transportation costs to safeguard the Kingdom’s competitiveness.
The EU is due to decide whether or not to withdraw the Kingdom’s trade privileges under the Everything But Arms (EBA) scheme next month.
The government has been intervening to reduce the cost of services in the Kingdom’s main ports, according to a recent report from the Ministry of Public Works and Transport.
The terminal handling charge in Sihanoukville Autonomous Port and Phnom Penh Autonomous Port has been reduced by $5 per twenty-foot equivalent unit (TEU), while the container imbalance charge has been slashed by $12 for a 20-foot container and $40 for a 40-foot one.
The ocean freight charge has been halved for freight shipments to China, while the emergency bunker surcharge will be dropped in some instances.
The government has also set $3 billion aside to cope with the suspension of the Kingdom’s access to the EBA.
Moreover, this month, the government approved the draft of the Interim Master Plan on Intermodal Transport and Logistics Connectivity, which aims to reduce transportation and logistics costs.
The plan is designed to strengthen logistics, promote regional supply chain integration, and increase competitiveness.
Representatives of the Cambodia Freight Forwarders Association (Camffa) and the Garment Manufacturers Association in Cambodia (GMAC) met with officials from the General Department of Customs and Excise last week to discuss the reduction of fees in the industry.
“We are striving to cut costs, particularly in logistics and other services, to aid the manufacturing and investment sector,” Camffa president Sin Chanthy told The Post.
“In case the EBA is removed, we have a set of targets to improve the cost of doing business here and attract new investors,” he said.
Chanthy noted that if Cambodia loses its EBA status it will face a tax hike of 10 per cent when shipping to the European bloc.
The GMAC said in a recent statement that one of its main goals in 2020 concerns import-export service fees.
“Cambodia needs to maintain regional competitiveness to keep the existing investors and attract new ones,” the GMAC said.
Ministry of Commerce spokesman Seang Thay told The Post that the ministry has been implementing other initiatives to prepare for the EBA withdrawal, including the elimination of the requirement to submit certificates of origin when shipping to certain countries.
“The government is also asking exporters who want to ship to Europe to join the EU’s Registered Exporter (Rex) system,” he said.
Last year, 3.8 million tonnes of oil and gas products were transported through Phnom Penh Autonomous Port, an increase of 22 per cent. Container traffic at the port increased by 29 per cent to 275,000 TEUs, the Ministry of Public Works and Transport said in the report.
Last year, the Sihanoukville Autonomous Port handled 6.5 million tonnes of cargo, an increase of 22.6 per cent. Container traffic rose by 17 per cent to 633,099 TEUs.