Home » Exclusives, Features » At 25, Asialink Cargo looks to bluer skies after 2012 turbulence

AS airfreight forwarder Asialink Cargo Phils. Inc. marked its 25th anniversary on April 15, the Filipino logistics company could only look back with relief to the past year, which its top executives describe as “an unusual year”.

The company is still trying to shake off the impact of the rough ride that the logistics players in general witnessed in 2012, when an industry upsurge early in the year gave everyone hope that it was to be the start of a sustained rally, a turnaround from the sluggish business a year earlier.

Yet it turned out to be a dead-cat bounce. The market optimism that the United States budget crisis and the eurozone financial chaos were about to end, and that Japan was starting to rebound from the economic wallop it took from the earthquake-triggered tsunami and nuclear plant meltdown in March 2011, fizzled out when the troubles in those three major markets persisted.

Today, Chris Coching, president of Asialink, has small businesses with CIF freehand accounts to thank for the company surviving a roller-coaster year.

“2012 was very unusual for ALC and I assume for the airfreight industry in general,” Coching said, reminiscing the air forwarding industry’s ups and downs last year.

“Business made a spike early in the year which we assumed as the take-off for the industry, only for it to slide down last quarter to almost a halt.”

Amid what Coching called a crisis, Asialink, the airfreight arm of the Mercury Freight group that offers global airfreight forwarding and complete logistics services, relied on its leaders’ business acumen to ward off what would have turned out to be another slow year as in 2011.

Asialink Cargo offers worldwide airfreight service through its international network that arranges door-to-door cargo conveyance from and to all corners of the world. It has a comprehensive range of rate and schedules that ensure on-time arrivals and handling reliability.

The company handles an array of shipments such as bathroom fixtures, decors, handicraft, electronics products, apparels, foodstuff, medical products and perfumes exported by Philippine-based producers to their overseas markets.

The products shipped out from Manila are primarily destined for Canada, Europe, the United States, South America, Australia, the Middle East, and Southeast Asia.

Asialink’s higher-value cargoes are made up of electronics products that local assemblers ship to their principals in Europe, a fact that dealt a blow to the Philippines’ semiconductor/electronics industry, and consequently almost dried up export cargo shipments. Demand for such products in the continent tanked last year as many Europeans lost their jobs and reined in their spending in the wake of the financial crisis.

At about the same time, the US was struggling with poor retail sales as American consumer confidence sank along with jobs losses from business cost-cutting or shutdowns.

The setback in the West and its business repercussions in the Philippine logistics industry took their toll on Asialink’s business, prompting its executives to take precaution – a tack that has paid off.

“Coming from a slow 2011, our target for 2012 was very conservative, which was realized and surpassed by the first half of the year,” Coching said.

“It served as a blessing when air business slowed down again, (as) the positive variance (from the gains in the first half) gave us the cushion to still end up positive against our targets in both volume and revenue,” he said.

The company would not dwell on the volume and revenue details of the past year, with Asialink only saying that “2012 was a good year averaging above budget compared with 2011. The first quarter of 2013 was basically the same, around 70- 80% performance against budget.”

Amid the turbulence in the West, “it seems that we have benefited from the freehand airfreight selling amidst this crisis,” Coching said.

“The airfreight industry being majority FOB, we have left out on our past CIF freehand accounts. During this stage where the convenience of nominated business from our network is scarce, we needed to go back to these CIF accounts,” Coching said.

Like the rest of the airfreight players, most of Asialink’s major trade partners are in economies that are in a downturn – the US, Europe and Japan.

“This has affected our major trade commodities. China’s aggressive approach on manufacturing have also given us a big black eye with investors moving their business out of the Philippines” and shifting to the Chinese mainland, said Coching.

The Asialink president is hoping that the Philippine economy’s strong growth last year that has been forecast to continue this year would translate to foreign investments and, consequently, business for the country’s airfreight forwarders.

“We are still waiting for this growth forecast to be converted to foreign investments and eventually business in need of logistics service,” Coching said, pointing to those once-shelved CIF accounts as the company’s watershed in times of a business drought.

“Our main strategy for the meantime is to have a good pool of controlled business working with SMEs (small and medium enterprises), investing on CIF accounts,” he said.

“Really, the latter (CIF) accounts have higher forms of risk, but while nominated business is low, we need to get cargoes moving to survive,” Coching said.

For now, the Asialink executive yearns for more foreign investments into the country, especially now that the Philippines has gained an investment grade rating from Fitch Ratings Service.

“Foreign investments will dictate our growth. As most of businesses entail logistics service, realistic improvement in our economy should pull all industries out of this crisis level,” Coching said.

Coching expressed relief that the world factory that is China is slowing down, and welcomed reports that some foreign companies are moving their mainland operations elsewhere.

“We hope and pray that they choose to move their business to the Philippines,” he said.

One other concern for the company is the soaring cost of fuel. “Fuel cost affects everything. It will definitely have an impact our operations cost,” Coching said.

Asialink was set up in April 15, 1998 as foreign demand for Philippine products grew following the 1986 EDSA revolution. A few years since its founding, the company registered unparalleled growth in its cargo traffic between the Philippines and foreign countries.

Today, the company boasts an 800-square meter warehouse strategically located at the gateway airport and provided with the most modern facilities and 24-hour security service. The company covers all functions from simple storage and release of cargo to inventory control, order fulfillment, pick and pack, and distribution via all modes of transport.

Asialink has full control of land operations at all times with own fleet of vehicles, open trucks and closed vans.

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