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Logistics

The Philippine Logistic Industry to Meet Growing Net Import of Goods

The Philippines’ net import of goods has grown from USD 7.3 billion in 2010 to USD 63.9 billion in 2019.

In other words, it recorded average growth at the rate of 27% y-o-y; however, long custom clearance processes and manual processes still exist.

Those two issues can be addressed effectively through digitalization so that the logistics industry can meet net import goods’ growth.

Gross Value Philiipines

In 2019, the country imported USD112.9 billion worth of goods worldwide with electrical equipment, mineral fuels, and machinery, including computers, which are the top three products.

About 78.8% of the total imported products come from Asia, and the rest comes from other parts of the world.

Importers need to get through long custom clearance processes, which take between 10 and 25 business days before they can release their cargos from the port.

At times, they cannot remove their load immediately due to port congestion.

Those inefficiencies are worsened by manual processes applied by the logistics industry.

According to research done by YCP Solidiance on Digitalization in the Philippine Logistic Industry, those currently using digital strategies are mostly technology-driven logistics service and e-commerce companies.

Both are forced to go digital in delivering goods to meet customers’ demand for transparency and provide efficient and quick delivery.

How Digitalization Help Logistics Industry Meeting the Rise of Net Import of Goods

Seeing that some e-commerce and modern logistic companies have successfully applied digital processes in their business, it is time for other companies to follow their steps and go digital.

Digitalization in custom clearance processes will prevent incorrect forms used, incorrectly filled out forms, misplaced paperwork, and other myriad issues.

Transportation Philippines

Digitalization in the Bureau of Customs will result in efficient custom clearance processes.

YCP Solidiance estimated that this modern practice would cut down to 80% so that they only take five days or less.

Meanwhile, replacing manual processes with digital processes enables logistics companies to shorten lead times and provide order status transparency.

Digitalization will also help the companies to adapt to the changing business environment, such as the rise of net import goods.

As a result, they will promote an efficient flow of goods no matter what the condition is, seize the opportunities present in the business environment, and maintain their growth.

Different companies need different strategies to go digital. Small companies with small capital can join digital platforms and integrate the big platforms’ digitized processes into their operations.

Meanwhile, companies with large capital can hire experts and buy software or hardware to create customized digitalization practices to meet their unique conditions.

Making an investment or joint venture establishment in companies that can perform digital processes is another perfect strategy for large capital companies.