TRANSPORTATION AND LOGISTICS INDUSTRY IN THE PHILIPPINES
“Hiring a freight forwarder will save you from hiring different people in different locations for different tasks.”
Transport is a key sector in the Philippine economy, linking population and economic centers across the islands. Being an archipelago, the Philippines’ logistics and transport system anchors to the maritime transport system. There are about 1,300 ports, of which about 1,000 are government- owned and the rest are privately owned and managed. The marine transport system is supported by a road network, linking ports to production areas, markets and logistics terminals, and an air transport system with strategic regional and local airports.
In the bigger picture, the logistics and transportation industry has been contributing to the country’s economic growth due to the influx of outsourcing, e-commerce, and globalization.
Despite its recent hype brought about by e-commerce, the country’s logistics and transportation are lagging compared to its neighboring Asian countries. In a 2016 report by the Department of Trade and Industry, the Philippines is reported, has the highest cost for logistics in the ASEAN region.
The high logistics cost in the country, according to the Maritime Industry Authority as cited in Philippine Institute for Development Studies (2018), is due to the following: limited cargo base, inadequate port infrastructure, lack of competition in the coastal shipping market due to sabotage, inadequate road transport networks and regulations that lead to excessive road congestion, high cost of port operations, and inadequate investments from the private sector. The country has seen modest improvement in the overall freight transport service, but a large part of the road network remains in poor condition and intermodal integration is low.
Considering all these, handling the transportation and logistics aspect of a business is a pain in the neck. Hiring a freight forwarder can save you from the mess. Freight forwarders take care of cargo documentation and deliver freight following legal procedures. Freight forwarders have a vast network spreading across the archipelago thus hiring a freight forwarder will save you from hiring different people in different locations for different tasks.
On a more positive note, the government is accelerating multiple infrastructure projects under the “Build, Build, Build Program” and among those projects are three (3) bus rapid transits, four (4) seaports, six (6) airports, nine (9) railways, and 32 roads and bridges. Such a program is collectively welcomed by the cargo industry since any improvement of road transport infrastructure has been seen as critical for strengthening the logistics service sector of the country. More roads equal less traffic, thus faster delivery and lower cost. (Technical Education and Skills Development Authority, 2019).