The Philippines’ largest logistics company, 2GO Group Inc., is aiming to adjust the revenue mix of its shipping and supply chain businesses from 70% and 30%, respectively, to equal shares by 2015.
2GO president and CEO Sulficio Tagud Jr. said 2GO has improved its operations not only in expanding its client base but also in efficiency in doing business.
2GO Group comprises 2GO Travel, 2GO Freight, 2GO Logistics, 2GO Express and 2GO Distribution.
“We have also realigned our services and we are not just a shipping company but the largest supply logistics company with a significant shipping component which is very important in an island country,” he said.
2GO has increased its revenue base in terms of logistics, land transport, warehousing, and even the courier service, 2GO Express.
“We are now a company which carries even the smallest envelope and the heaviest cargo that we can move within the country. We’re the primary mover of heavy mining equipment to mountainsides. We are the carrier for the National Grid Corporation’s transformers which weigh 300 tons each. We do carry the cell site equipment of Globe Telecom to everywhere in the Philippines,” he added.
With the very robust supply chain business and passenger and freight businesses on track, 2GO targets P600-700 million net income for 2013. It expects consolidated revenues of P18 billion.
“Shipping is a profitable business. The logistics, land transport, warehousing distribution and courier service are fast expanding. We see a revenue makeup from 70 percent shipping and 30 percent logistics and supply chain to 50% shipping and 50% supply chain business in 2015,” he said.
For the passage business, 2GO Travel competes with airlines and other domestic inter-island ferries that are principally waging a price war. All budget airlines, including Zest Air and Cebu Pacific, cut prices deeply to regain market share, thus eating more of the shipping market share.
The airlines compete in geographic areas including Bacolod, Iloilo, Cebu, Tagbilaran, Dumaguete, Cagayan de Oro, Iligan, Dipolog, Ozamis, Cotabato, Davao, General Santos, Surigao, Zamboanga and Butuan.
Tagud explained 2GO Travel addresses a different segment of the market. He said those who want to travel fast take the airlines, but the “lower-end” market whom they cater to finds air travel a little expensive.
Even though the difference is only P500, that’s still a lot of money and when they travel, he said, they bring a lot of things. If they go by air, they will be charged extra, and that makes the trip more expensive.
“If you have more time, the best way to travel is by sea. You see a lot of places and islands which you cannot see when you travel by air. Say, when you pass by Mindoro or Romblon, and Tablas Island, somebody will explain to you their history and culture,” Tagud said.
Image from www.2go.com.ph
