Home » 3PL/4PL » 2GO banks on supply chain business to boost profit

2GO Group, Inc, a publicly listed company in the Philippines, is looking at getting more mileage from its supply chain business to improve its 2012 revenues.

The Philippines’ biggest shipping company said recent consolidation in its business model has allowed it to pursue higher revenue targets.

“Freight will continue to be the brand’s bread and butter,” 2GO Travel vice president Stephen Rey Tagud told PortCalls during a recent media familiarization tour organized by the company.

2GO Group Inc is the new name of ATS Consolidated Inc, formerly Aboitiz Transport System Corp. Another Philippine shipping line, Negros Navigation, bought majority shares of ATS in 2010.

2GO Travel is one of three brands under 2Go Group, the two others being 2GO Supply Chain and 2GO Distribution.

“There has been tremendous growth in the freight and supply chain business and the company is expected to continue to benefit from that,” Tagud explained.

“Our passage business will always be there but 70% of the capacity will still go to freight while the remaining 30% will be for passage.”

Tagud said synergies between business units pursued in 2011 are starting to bear fruit and are expected to provide a healthier bottom line in 2012.

The group’s sales and business development teams are currently wrapping up deals for new accounts which will help grow the logistics business.

The move is in line with the vision of senior management to transform 2GO, together with parent company Negros Navigation, from a shipping company to a total logistics provider.

In 2011, revenues from 2GO’s cargo/freight business went up 7% year-on-year to P5.7 billion, thanks to a 5% rise in rates and 1% increase in volume and despite a 13% reduction in the number of trips made.

The logistics business is also seeing growth with warehouse capacity of about 56,000 pallet positions, an increase of 39,000 pallets following completion of a third warehouse, which is now being sub-leased.

Last year, 2GO Group posted a net loss of P626 million, narrower than the previous year’s net loss of P755 million.

Total revenues increased 11.7% to P12.97 billion from P11.61 billion.

The passage sector posted a 9% increase to P2.38 billion from P2.18 billion.

Photo from http://supplychain.2go.com.ph/SupplyChain/scs.asp

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