Rules for Domestic Freight Forwarders Registration

Policy and purpose

The State policy is to promote and professionalize the domestic freight forwarding industry through a system of registration and accreditation.
The system must establish an environment conducive to the growth of the industry.

Definitions and key terms

Memorandum of Understanding (MOU) refers to the agreement entered into by the Philippine Ports Authority (PPA), MARINA, CAB, Philippine Shippers’ Bureau (PSB), and Philippine Domestic Freight Forwarders Association, Inc. (PHIDOFFA).
Registration and Accreditation is the process showing that an applicant/entity complied with basic requirements imposed by the government’s implementing agency, and by the PSB.
A Certificate of Registration and Accreditation is the document issued by the PSB certifying registration and accreditation for transacting business as a domestic freight forwarder.
A Domestic Freight Forwarder is a cargo intermediary enterprise that facilitates transport of goods on behalf of its customer and performs any or a combination of domestic freight forwarding services.
Domestic Freight Forwarding Services include, among others: acceptance of cargo for delivery to domestic destination; documentation and processing; booking cargo space; negotiating freight rates; advancing freight payments; providing trucking and warehousing; packing/crating; and other related undertakings.
Shipper is the person named in the Airwaybill, Bill of Lading, or other transport documents as contracting with the carrier for carriage of goods.
Consignee is the person named in the Airwaybill, Bill of Lading, or other transport documents to whom the goods are to be delivered by the carrier.
Registration and Monitoring Committee (RMC) consists of permanent government members from PPA, MARINA, CAB, and PSB; private representatives from PHIDOFFA; and two (2) industry experts plus members appointed by the PSB Director via its Secretariat.

Scope and who is covered

The rules cover all persons or entities engaged in domestic freight forwarding services as defined in these Rules.
Registration and accreditation of persons/entities engaged in domestic air freight forwarding services remain vested with the Civil Aeronautics Board (CAB).
The PSB is the lead agency in implementing the MOU.
The monitoring and disciplinary procedures apply to PSB-accredited domestic freight forwarders, non-vessel operating common carriers, cargo consolidators, and breakbulk agents found to have violated the Rules.

Requirements and application filing

Registration/accreditation requires submission of: (1) articles of incorporation/partnership or business name registration; (2) biodata of the applicant’s operations manager or chief operating officer with 2 passport size pictures, with at least two (2) years experience in shipping, freight forwarding, or related specialization; (3) the latest audited financial statements; (4) SEC-issued certificate of paid-up capital showing total of at least PHP 250,000.00; for single proprietorships, bank certification as to cash balance or certificate of ownership of other tangible properties; (5) specimen of Bill of Lading, Waybill, or any equivalent transport document; (6) inventory of transport equipment or a contract with a trucking company; (7) insurance with minimum coverage of at least PHP 100,000.00 or an amount determined by the RMC based on the nature of usual cargo handled; and (8) authority to inspect offices/warehouse.
When applicable, a registration package also requires a Permit to Operate (PTO) issued by the PPA.

Processing, inspections, and issuance

An application is considered filed only upon submission of all documentary requirements and payment of filing and processing fee of PHP 3,000.00 per application.
Within fifteen (15) working days from receipt, the PSB Registration and Accreditation Division must evaluate documents and inspect the applicant’s offices and equipment.
Inspections must be conducted by a team of at least two (2) members of the PSB Registration and Accreditation Division staff (or duly authorized representative) upon written instruction of the PSB Director.
Inspections must be conducted in the presence of the manager or any officer of the company-applicant.
An inspection report must be submitted to the PSB Director within twenty-four (24) hours after the inspection.
All applications are submitted to the RMC for approval.
The RMC, through the PSB Director, issues the certificate and RMC ID after satisfactory compliance with the Rules’ requirements.

Validity, renewal, and automatic approval

A Certificate of Registration/Accreditation is valid for two (2) years from the date of issue, unless sooner canceled or suspended by the Committee upon recommendation by the PSB for violation or non-compliance.
Renewal applications must be filed forty-five (45) calendar days before expiry with the PSB Registration and Accreditation Division, supported by a minimum requirement to be determined by the RMC.
Renewal fee schedule: renewal applications filed not later than fifteen (15) working days before expiry are charged PHP 4,500.00; applications filed after fifteen (15) days before expiry, and applications of entities previously delisted, are charged PHP 6,000.00 instead of the usual PHP 3,000.00.
Processing period: original and renewal applications must be processed within twenty-one (21) working days reckoned from the filing date.
Automatic approval: if the twenty-one (21) working days lapse without action or without completion of processing, the application is deemed approved and the applicant is entitled to the issuance of the certificate.

Certificates: transfer limits and operational changes

A certificate may be canceled, revoked, or suspended for violation of the Rules under the monitoring procedures in Rule VIII.
A transfer or change of ownership of a single proprietorship registered under the Rules causes automatic revocation of the certificate; the new owner must apply for registration under the Rules.
A material interruption of business or actual dissolution of a partnership due to a change in partners’ relationship registered under the Rules causes automatic revocation.
Certificates are non-transferable: no certificate may be transferred, conveyed, or assigned to any person, partnership, or corporation; it may not be used by any other person or entity than the one in whose favor it was issued.
RMC Identification Cards must be issued to official representatives of accredited entities authorized to transact business on their behalf; accredited freight forwarders must submit names and passport-size ID photos of authorized representatives.
RMC Identification Cards are valid for two (2) years and require a PHP 100.00 processing fee charged by the PSB.
Board and key officer change reporting: changes in the composition of the Board of Directors must be registered with the PSB Registration and Accreditation Division within thirty (30) days from the date the change was decided or approved.
Resignation/termination reporting: resignation or termination of the operations manager or chief operating officer must be reported immediately to the PSB within five (5) days from the date it occurred.
Failure to renew: covered entities that fail to renew, upon expiration and after proper notification, must be immediately delisted and disallowed from conducting business as a domestic seafreight forwarder.
The Registration and Accreditation Division keeps and updates a monthly list of accredited entities and copies must be furnished to airlines, shipping lines, the MOU signatories, and other government agencies needing the list.

Monitoring, suspension/cancellation proceedings

Monitoring and disciplinary procedures apply to accredited domestic freight forwarders, non-vessel operating common carriers, cargo consolidators, and breakbulk agents for violations of the Rules.
The PSB Registration and Accreditation Division gathers compliance-related data and information, including: complaints by a shipper, freight forwarder, cargo handler, or interested person; existing data on file with the RAD; and referral letter-complaints by any government agency.
Data evaluation must determine whether a probable cause exists to proceed with investigation.
Upon probable cause, a preliminary conference is conducted forthwith and presided over by the investigating officer assigned by the PSB Director; notice of meeting is sent to all interested parties.
The investigating officer prepares minutes of proceedings/meetings and copies are furnished to the parties concerned.
Within five (5) days after the preliminary conference, the investigating officer submits a recommendation with findings to the RMC for deliberation.
The RMC decides the case by majority vote.
If matters fall outside PSB/RMC jurisdiction, they are referred to the appropriate government agency for final ruling.
If, upon referral and/or RMC deliberation, probable cause exists against the respondent entity, a formal charge is filed, titled: “In the matter of cancellation and/or suspension of Certificate of Registration/Accreditation of (name of company)”.
Notice to respondent: the case is docketed and an order with a copy of the complaint is sent to the respondent requiring an answer within ten (10) days, otherwise default judgment is issued.
Filing of answer: within the given period, the respondent files a verified answer incorporating all pertinent documents supporting its defense.
Waiver: failure to file the answer and documents within the specified period, or failure to appear during the preliminary conference, is deemed a waiver of the right to present evidence; the case is heard ex parte.
Summary judgment: if, based on the pleadings/evidence on record and after the preliminary conference, the RMC finds sufficient grounds to render judgment, it considers the case submitted for resolution.
Position papers: if summary judgment is not appropriate, the RMC refers the case to the investigating o