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Cambodia looks to cut logistics costs to keep trade privileges with EU

CAMBODIA is implementing measures to lower logistics and transportation costs, while the European Union's reviews whether or not to withdraw the Kingdom's trade privileges under the Everything But Arms (EBA) scheme next month

30 January 2020 - 19:00

CAMBODIA is implementing measures to lower logistics and transportation costs, while the European Union's reviews whether or not to withdraw the Kingdom's trade privileges under the Everything But Arms (EBA) scheme next month.

In a bid to safeguard Cambodia's competitiveness, the government has been intervening to reduce the cost of services in the Kingdom's main ports, according to a report from the Ministry of Public Works and Transport.



The terminal handling charge in Sihanoukville and Phnom Penh autonomous ports has been reduced by US$5 per TEU, while the container imbalance charge has been slashed by $12 for a 20-foot container and $40 per FEU, reported the Phnom Penh Post.



The ocean freight charge has been halved for freight shipments to China, while the emergency bunker surcharge will be scrapped in some instances.



The government has also set $3 billion aside to cope with the suspension of the Cambodia's access to the EBA.



Earlier 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 boost 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 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.



Mr 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.



Ministry of Commerce spokesman Seang Thay said 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 rose by 29 per cent to 275,000 TEU, the Ministry of Public Works and Transport said.



Last year, the Sihanoukville autonomous port handled 6.5 million tonnes of cargo, up 22.6 per cent. Container traffic grew by 17 per cent to 633,099 TEU.


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