Home » SCMAP Perspective » Testing Waters on the Philippines’ Logistics Resilience

Today we have a repeat guest columnist from the ranks of the Supply Chain Management Association of the Philippines (SCMAP). Arnel Gamboa is the incumbent president of SCMAP. He has been the editor-in-chief of the official newsletter of SCMAP, the Supply Chain Philippines, for the past two years. He is a seasoned practitioner and resource speaker in supply chain with focus areas in cold chain, fast-moving consumer goods distribution, retail-supply networking, demand planning and supply chain ICT. He is currently the head for supply chain at Benby Enterprises, Inc.,the leading distribution company for imported world renowned food, personal and home care products. — Ed Sanchez, Executive Director

This year has been one of the most eventful years in the history and landscape of Philippine supply chain or logistics in more ways than one, in that it has been both challenging and fruitful. For the Filipino-Chinese community, many would bear relevance to the fact that 2013 was the year of the Black Water Snake – which resembles a long and winding road but lays a treasure trove at the end!

Challenges for Last-Mile Logistics
Disasters both natural and man-made impacted the logistics sector during the last half — from the Zamboanga siege by the MNLF, the Bohol mega-earthquake, super typhoon Yolanda, the collision of 2GO vessel St. Thomas Aquinas and Sulpicio Express Siete in Cebu, and the revamp down to successive transitions at the Bureau of Customs. In all, the mettle of the Filipino logistics professionals and community was tested to the limit. Logistics connectivity and disaster preparedness were underscored once again as very important areas for development in our country especially that we live in an archipelagic nation located within the Pacific ring of fire!

It is also noteworthy that this year, we felt more short-term government solutions in addressing the logistical woes of the nation – from the Modified Day Time Truck ban, Port of Manila congestion, NAIA Terminal traffic, among others. The World Bank logistics performance index (LPI) comparison in 2010 and 2012 shows that the Philippines dropped from 44th to 52nd place among 155 countries. The reason for the decline is anchored in customs, international shipments and timeliness.

Government Roadmap and Collaboration
All the cited reasons for the drop in the LPI point to low investments in technology and infrastructure by the government needed to both develop and support economic activities that normally go with growth. The Customs Modernization and Tariff Act (CMTA), for instance, has been pending for years; at the same time we are cramming for the creation and implementation of a National Single Window (NSW) system in preparation for ASEAN integration in 2015.

There is also still a lot to be desired for alignment in policies in terms of maritime laws and air regulation. At the heels of the sea tragedy in Cebu last August 17 involving the collision of a 2GO and Sulpicio (now known as Philippine Span Asia Carriers) vessel, the Maritime Industry Authority or MARINA invited various stakeholders, including SCMAP, to enjoin in a maritime safety forum co-sponsored by the International Maritime Organization.

The series of incidents of near misses as well as misses on the runway at NAIA Terminal 3, Davao International Airport and Caticlan Airport has seriously put in question the training of pilots plying domestic routes and the Philippine air safety policy in general. This did not help the Civil Aviation Authority of the Philippines improve the rating and image of Philippine aviation with global regulators.

In the last three years, the rate of government investment in transport facilities (sea ports, airports, mass rails systems, etc), infrastructure (roads, bridges, fly overs, etc) and systems (MIS, EDI, global system) has been observed to be lower than in previous years. More glaring is the fact that our rate of investment is lower than other ASEAN countries such as Thailand, Vietnam, Cambodia and Indonesia.

Climate Change is an Inconvenient Truth
With the coping mechanisms observed to be inadequate when recent calamities struck the Philippines, the government will need to transform the function of the primary response unit for disasters (in this case the National Disaster Risk Reduction and Management Council), from just management of disasters to preparedness (if not prevention).

Compared to the Philippines, Japan was able to provide the fastest and most efficient response strategy to a high-intensity earthquake, followed by a massive tsunami and finally a potential nuclear reactor meltdown in Fukushima Daiichi. Supertyphoon Yolanda was not a walk in the park either considering it was the strongest ever cyclone in world history to ever make landfall, but it is in the end the effective and collective effort in saving lives and properties that must be considered.

Given the worsening calamities every year, drastic measures have to be taken to prepare for such. Logistics is the life blood whenever calamities strike – food, shelter, medicine and even people need to be transported whatever the obstructions are.

SCMAP has participated this year in a summit that gathered 20 member countries of the APEC in Bali, Indonesia discussing supply chain resilience and disaster preparedness. The summit could not have been timed better as a few months later we faced the worst earthquake and typhoon to hit the Visayas region. This is an eye opener as we now realize how short we are in terms of equipment and qualified personnel for such emergencies.

Opportunities for 2014
With all the aforementioned gaps and calamities, the Philippines is still forecast to end 2013 with a 6-7% growth. This is really not bad considering we are being termed as an emerging tiger in Asia. Sustainability of this success will depend on the sound policies and priorities of government for next year, especially in logistics since logistics represents the lifeblood of the economy.

The priorities should include the following areas: talent development & management, policy alignment and infrastructure investments. We need to start thinking global as we arrive at the final year of preparation for the AEC full integration. In order to remain competitive, the Philippines has to think out of the box and differently.

This year also compelled us to focus our efforts next year on reconstruction and recovery of the Eastern Visayas region and better preparedness and response mechanisms for calamities.

2014 is the year of the Fire Horse, a year perceived to be a continuity of the fruits and success of 2013. SCMAP will continue to lead the industry in advocacies and policy making in 2014 as it embraces a banner year by virtue of its 25th year anniversary!

Merry Christmas and a prosperous new year to all!

For more information, please go the SCMAP website www.scmap.org. Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email secretariat@scmap.org.

No comments yet... Be the first to leave a reply!

Leave a Reply

Your email address will not be published. Required fields are marked *

8 + 17 =