The Future of Freight Forwarding in the Philippines: Predictions and Trends in Technology Adoption

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The Future of Freight Forwarding in the Philippines: Predictions and Trends in Technology Adoption
Amit Maheshwari, Softlink Global CEO

Research by Frost & Sullivan predicts that the Philippine logistics market will grow at a compound annual growth rate (CAGR) of 10.5% from 2020 to 2025, reaching a value of $60.22 billion. But what’s driving this growth? The increasing adoption of technology and digitalization, of course!

With the adoption of new technologies and innovations, the industry expects to undergo a rapid transformation and see an evolution in how goods are transported and managed in the Philippines market. A study by the Global Alliance of Logistics and Supply Chain Management found that 67% of logistics providers in the country already use some technology, with the majority investing in warehouse management systems, freight forwarding software, transportation management systems, and enterprise resource planning software.

In light of these trends, the freight forwarding industry in the Philippines is expected to embrace new forms of automation and digitalization, such as blockchain, IoT devices, and digital platforms, to improve efficiency and reduce costs. As we look to the future, the freight forwarding industry in the Philippines is set to undergo a significant transformation.

So, what does the future of freight forwarding in the Philippines look like?

Experts predict that the Philippines’ freight forwarding industry will sustain its growth as the country continues to play a vital role in the global supply chain. By understanding how the industry is evolving, businesses can position themselves to take advantage of emerging opportunities and stay ahead of the curve. Let’s take a closer look at the predictions and trends in technology adoption that will shape the industry.

Digitalization and Automation: Digitalization and automation will play a significant role in the future of freight forwarding in the Philippines. With the adoption of technologies like blockchain, the Internet of Things (IoT), and cloud computing, the industry is likely to become more efficient, transparent, and secure. Grand View Research’s report predicts that the global market for blockchain in transportation and logistics will reach USD 3.6 billion by 2025. The driving force behind this growth is the demand for enhanced transparency and security within the supply chain. According to a report by Allied Market Research, the IoT market within the logistics industry is expected to achieve a Compound Annual Growth Rate (CAGR) of 28.3% between 2021 and 2028. IoT technologies such as RFID tags, sensors, and GPS tracking can provide real-time shipment visibility, enabling freight forwarders to optimize their operations and provide better customer service. According to a report by Allied Market Research, the IoT market within the logistics industry is expected to achieve a Compound Annual Growth Rate (CAGR) of 28.3% between 2021 and 2028.

E-commerce and Last-Mile Delivery: The growth of e-commerce in the Philippines is another significant trend that is likely to shape the future of freight forwarding in the country. According to a report by eMarketer, retail e-commerce sales in the Philippines are expected to reach USD 12.3 billion by 2025, up from USD 5.5 billion in 2020. As e-commerce businesses continue to grow, the demand for last-mile delivery services will also increase. According to Research and Markets, the global last-mile delivery market will reach USD 68.8 billion by 2026, growing at a CAGR of 16.7% from 2021 to 2026. Freight forwarders that can provide fast, reliable, and cost-effective last-mile delivery solutions will be in high demand. This could include leveraging technologies such as drones and autonomous vehicles to optimize delivery routes and reduce delivery times.

Sustainability: Sustainability is another trend becoming increasingly important in the freight forwarding industry, driven by concerns about climate change and the need to reduce carbon emissions. According to a report by the World Bank, the Philippines is among those countries in the world that are most vulnerable to climate change, making sustainability a pressing issue for the industry. Freight forwarders that adopt sustainable practices and technologies, such as electric vehicles and alternative fuels, are likely to gain a competitive advantage in the market.

Artificial Intelligence (AI) and Machine Learning (ML): AI and ML technologies are already being used in the freight forwarding industry to improve efficiency and accuracy in areas such as route planning, inventory management, and predictive maintenance. According to a report by MarketsandMarkets, the global AI in the logistics market is expected to reach USD 6.5 billion by 2023, growing at a CAGR of 42.7% from 2018 to 2023. As these technologies continue to develop, their adoption is likely to become more widespread, enabling freight forwarders to optimize their operations and reduce costs.

Data Analytics: The industry’s rising data output is becoming an essential tool for freight forwarding companies to make informed decisions. As per a report by Frost & Sullivan, the Philippine logistics market is expected to experience an 18.5% compound annual growth rate (CAGR) in data analytics adoption between 2020 and 2025, driven by the increasing use of IoT devices and sensors in logistics operations. The proliferation of IoT devices and sensors in logistics operations is the reason behind this surge, as this considerable volume of data can help enhance operational efficiency and reduce expenses. Freight forwarding companies can use this data to make informed decisions about shipping routes, delivery times, and customer preferences.

To wrap it up, the freight forwarding industry in the Philippines is poised for significant transformation in the coming years, driven by the adoption of new technologies and changing customer demands. With the rise of e-commerce and the increasing importance of supply chain visibility, freight forwarders in the Philippines will need to embrace digitalization and innovation to remain competitive. In short, the future of freight forwarding in the Philippines is all about adapting to new technologies, being customer-centric, and keeping up with the changing demands of the market. Companies that can do this will be well-positioned to thrive in the years to come.

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