Home » 3PL/4PL » Freight forwarders brim with optimism

FREIGHT forwarders moved into 2004 with much optimism, seeing only recovery on the horizon. Angelito Colona, chairman of the ASEAN Freight Forwarders Association (AFFA) and president of the Federation of Forwarders Associations in the Philippines (FEDFAP), said the sector is more confident of a bounce this year, especially with more support from the government. “2004 looks very promising with increased attention and support we have been getting from the government,” Colona said.</p>

<p>Erich Lingad, president of the Philippine International Seafreight Forwarders Association (PISFA), agrees. “I am optimistic volumes will get better. In 2004, we see an improvement in the freight forwarding business, especially now that we have Ateneo as our partner. We at least can professionalize the business through training.” The association, together with other industry groups, recently put up the Institute for Transportation and Logistics Management with the Ateneo Center for Continuing Education.</p>

<p>Last year, volume was low, Lingad noted. “We don’t have exact figures yet. But the decline was brought about by the war in Iraq, SARS in Asia and less foreign investors coming into the country.” Profitability also suffered because of stiff competition, he said. “A lot of businesses went to China,” Lingad added. “For us to compete, we need to produce items with more value-added because if we manufacture the same products as China and they have lower costs, it follows that we cannot compete.” For the airfreight sector, Colona said businesses are expected to soar with improvements in the aviation industry. “Airlines are more cooperative especially in terms of rates, allowing forwarders to be more flexible.</p>
<p>Furthermore, there have been additional flights and value-added services from pick-and-pack to door-to-door services, which have made transport a lot simpler than before,” he pointed out. The seafreight sector also holds promise. Colona said cargo volume is expected to increase. “This may not be double-digit but by a percentage better than in recent years.” Security will be a key concern for both the air and sea freight sectors this year. Lingad said the 24-hour automated manifest system initiated by the US may yet become a global procedure. As it is, some countries have already followed the US lead, requiring the electronic submission of manifests 24 hours before cargo arrival at the final port of destination.</p>
<p>In the area of freight rates, Lingad said carriers may not be as aggressive in filing rates this year because of tight space due to increases in volume. “Why bring down rates if you lack space?” he asked. As for the general rate increase (GRI) for 2004, Lingad said there are no indications of how much this will be, “but last year’s GRI was substantial.” Local charges, including the terminal handling charge, will continue to be a major point of contention in 2004. Lingad predicts that some charges may be eliminated or at least cut, such as the cleaning charges and container deposit.</p>
<p>This year, seafreight forwarders will also have to wrestle with the issue of whether the sector would like to be regulated by the Philippine Shippers Bureau (PSB) under the Department of Trade and Industry (DTI), as is the present setup, or transfer to the Department of Transportation and Communications. “We want PSB to regulate but this goes against their agenda. DTI’s mandate is to promote small- and medium-size businesses. In our case, we want to be regulated to professionalize the business.</p>
<p>Those are contradicting goals,” the PISFA president said.

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