Growth, opportunities and challenges in the logistics industry


AS a thriving market, the country’s logistics industry will continue to be a growth driver in the property sector in the next year or so, according to property management and consulting firm KMC Solutions.

Karen Golez, KMC Solutions  industrial and logistics services senior director, told the BusinessMirror that old and new players are both bullish with the new ones opening while the older ones embarking on an expansion mode. “This has been evident as well in the high demand for industrial properties from the logistics companies in the past year,” Golez said.

Rosemary Rafael, president of Airspeed Philippines

As a developing country, Golez said the Philippine logistics landscape offers a lot of growth opportunities as it is still a young industry. This is complemented by the growth of e-commerce as more goods need more facilities for the storage of goods. 

 As the logistics sector continues to boom in the Philippines, the need for better infrastructure is needed. “To have seamless and efficient supply chains, there is a need to continuously improve the quality of air and seaport infrastructure and better transportation road network systems as this contributes to a better logistics performance which also leads to higher trade and significant economic impact,” Golez said.

She said that Cavite and Laguna in Southern Luzon and Bulacan and Pampanga from the North are growth spots. Location and accessibility are the main considerations to attract the locators. Moreover, they have to be in close proximity to the airport, seaport as well as their clients and they need to be accessible as well to major highways that can help maximize travel time and logistics cost.

What needs to be done

Although the Philippines has the potential to be a major logistics hub in Southeast Asia, Kerry Logistiskus Inc. President Jay Capino told the BusinessMirror in an e-mail interview the country first needs to tackle some challenges hounding the industry.  “If we are to take full advantage of this to enhance our position as a regional transport hub, we need to address some critical concerns, not least of which is an effective Covid-19 response by the government that will stimulate the economy and cushion the impact of repeated lockdowns,” Capino said. 

Capino also pointed out the country needs to bring down the logistics costs by modernizing its airports, seaports, and logistics infrastructure. Moreover, he said it is also quite important to fix its disorderly regulatory framework to lessen bureaucratic red tape with efficient customs. 

Another problem that needs to be solved is traffic because it adds to the operational cost of the companies. “The decongestion of our roads to and from our major ports—Manila, Batangas and Subic, most especially—needs a rationalized and integrated master plan that identifies the chokepoints in the links so that we can optimize delivery time.” 

Karen Golez, KMC Solutions industrial and logistics services senior director (third from left) poses with her team.

In another e-mail interview, Airspeed President  Rosemary Rafael lamented the  Philippines is not on the same level as Thailand or Vietnam in expansion. She said the country needs an overall infrastructure developed to maximize its potential as a major logistics hub in the region. “If we want to achieve to become a major hub in Southeast Asia we need to develop our infrastructure [physical and digital] the soonest possible,” Rafael said.  

The success of Ninja Van

Golez said companies such as Fast Group, Flash Express, Hellmann Logistics and Toll Group are some of the companies creating waves in the Philippine logistics market. Last December 20,  Fast Group, an end-to-end logistics company formed a partnership  with an equity firm that will infuse P6 billion to expand its logistics operations. Among its clients  Procter and Gamble, Nestle, Johnson  and Johnson and NutriAsia.

Golez added other companies such as Flash Express, Hellmann Logistics and Toll Group  have entered the market and are trying to take a piece of the logistics pie.

Ninja Van, one of the leading courier and logistics companies in the Philippines and Southeast Asia recently celebrated its fifth anniversary highlighted by the introduction of its new services and their role in empowering MSMEs (micro, small and medium enterprise), especially amid the pandemic.

“As we celebrate our fifth anniversary, we want to highlight our initiatives to support MSMEs through the years, even before the pandemic hit our country. We invest heavily in providing them services and tools such as COD Advance and Ninja Direct, and our Ninja Blog and Ninja Masterclass to make the e-commerce process easier for them,” said Sabina Lopez-Vergara, chief commercial officer of Ninja Van Philippines.

Martin Cu, country head of Ninja Van Philippines, said the company has gone a long way recalling the beginnings of their journey that started out in their first office-slash-warehouse in Taguig, which is actually a condominium unit. Now, they have over 300 hubs, stores and stations warehouses to their name, with the biggest one having a total area equivalent to 17 Olympic-sized swimming pools.

Cu described the growth over the last five years as fast-paced, reaching 1 million total deliveries in 2018 and launching Ninja Direct, their dropshipping service, the following year.  Even when the pandemic struck the country in 2020, Ninja Van Philippines remained steadfast in providing the best service to its customers.

Ninja Van Philippines has seen a 150-percent growth in parcel volumes in the past 12 months, and is processing billions of pesos of Cash-On-Delivery (COD) payments monthly.

Image courtesy of ECX

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