The continued growth of the Philippine economy as well as rising consumer spending will help sustain expansion in the logistics sector, according to LBC Express president Miguel Angel Camahort.
Camahort made the statement at a press conference after the June 10 signing of a service cooperation agreement between LBC Express and the local subsidiary of Japan-based SG Holdings Global Pte Ltd, Sagawa Express Philippines, Inc. The partnership combines LBC’s logistics and delivery capabilities with Sagawa’s strength in freight forwarding and international logistics.
According to a recent report entitled “Philippines Logistics Market Outlook to 2020—Driven by Customized Logistics, E-Commerce Activities and Changes in Freight Forwarding,” analysts from global information provider Ken Research estimate the country’s freight forwarding market will grow at a compounded annual growth rate of 6.8% from 2016 to 2020, reaching total revenues of US$41.3 billion.
Camahort said he believed “there is enough room for everybody to survive.”
He noted the newly signed Customs Modernization and Tariff Act (CMTA) will also help boost business. Under the CMTA, the amount of exemption for a balikbayan box has been increased to P150,000 from the previous P10,000.
“Hopefully that would help everybody send more boxes… When that happens they’re happy, we’re happy, everybody’s happy, and the government gets more revenue from legal taxes on the box,” said Camahort.
But aside from opportunities, the LBC chief took note of the challenges that lie ahead for the logistics business. He said there was need for more infrastructure such as bigger airports as well as more runways, ports, and railways to make operations more efficient.
He observed how congestion in the country’s main air hub, Ninoy Aquino International Airport, causes difficulties in the provision of express services. He said he would not mind if the government decides to transfer the main air hub as long as the landings and takeoffs are increased.
LBC currently uses the services of commercial airlines, but if economies of scale are present, Camahort said they might buy their own aircraft.
At the press conference, SG Holdings president and regional head Tomoki Sano said while Sagawa has been handling deliveries within the Luzon area, the partnership with LBC Express will allow it to cater to more customers across the country.
Camahort said LBC can use Sagawa’s network outside the Philippines. Sagawa is present in 24 countries worldwide.
In the future, the LBC chief said a joint venture that entails shareholder arrangements may also be created.–Roumina Pablo
