The Philippine freight forwarding industry is witnessing rapid and stable growth since a few years. We see the emergence of exciting technological developments such as digital freight forwarding, e-commerce logistics, and blockchain-based solutions. Especially after the pandemic, freight forwarders have realized the benefits of adopting such technologies. Many freight forwarding companies today are investing in SaaS-based All-in-One freight forwarding & logistics management software technology to modernize their operations and services, streamline the supply chain process, and improve efficiency.
This digital disruption, coupled with the Philippine government’s successful initiative to improve the nation’s infrastructure via the Build, Build, Build program, is expected to enable faster and more efficient movement of goods across the country, fueling the logistics industry’s growth.
Opening up portals for logistics and freight forwarding
The Build, Build, Build program has especially caught the attention of supply chain professionals the world over. Given the country’s challenging geography which includes thousands of islands, rugged terrain, and poor road infrastructure, the Philippine government, through the 3B program, has tried to usher in, with suitable success, the golden era of infrastructural capability in the Philippines. This has spurred economic growth – the Department of Public Works and Highways records the creation of 6.5 million jobs for Filipinos between 2016 and 2020 – incredible numbers indeed.
As demand for international goods witnesses rapid and sustained growth in the country, thousands of connecting bridges have been built, and priority has been given to farm-to-market roads. Over 6,000 bridges and more than 2,700 kilometers of FMRs have been constructed under the initiative. This will certainly give a massive push to last-mile deliveries, once the goods reach the ports. Speaking on the more macro level, more than 550 kilometers of access roads have been built to augment the transport, logistics and economic activities across key transport hubs. This enhancement in the linkages towards airports, seaports, and railway stations is delightful news for shippers and forwarders in the Philippines.
The connectivity infrastructure is further solidified by a traffic decongestion plan where high-grade expressways, highways, flyovers, diversion roads, interchanges, and underpasses are built. Focus has been given to the widening of national bridges and roads.
Initiation and successful implementation of such robust infrastructure guarantee a promising opportunity for businesses and investors in the Philippine freight forwarding industry. As mentioned at the very start, digital freight forwarding is on the rise as well. The combination of the trio of improved infrastructure, growing demand for goods and services, and the rise of digital services indicated extremely positive signs for the growth of the logistics market in the Philippines. The major challenges faced in terms of infrastructure have been improved.
Logistics business owners can expect longer delivery times to be shortened, and higher transportation costs to be lowered. Bottom lines will reflect the progress that the surrounding environment brings. This is about the outside in; from the inside perspective of businesses, their objective should be to take advantage of this scenario to capture the maximum market share.
Capitalizing On opportunity through digitalization
We recommend that every forwarder equip himself to capitalize on this opportunity by making arrangements to digitize and digitalize their daily business operations. All activities such as transportation, warehousing, inventory management, and other aspects of forwarding and supply chain management must be automated and streamlined using tech-based solutions. Many logistics companies have already adopted new technologies such as GPS tracking, route optimization, and automated warehouse management systems to boost efficiency and minimize costs, and forwarders who match pace with this technological revolution and provide the latest solutions to shippers stand to gain the most.
The logistics industry in the Philippines remains, and will remain, a critical sector of the economy. As the country continues to grow and develop, there will be increasing demand for logistics services. With strong government support, the industry is poised for continued growth, and so are those businesses that leverage technology to optimize operations and deliver refined customer experiences.
Originally Published in Portcalls Asia Magazine