case study about logistics in the philippines

The Logistics Industry in the Philippines: Its Challenges and Solution

The transportation and storage segment has always been a significant component in the Philippine economy, summing up to USD 13 billion in 2019. It has accounted for around 4% of GDP over the last five years. With a lot of room for growth, digitalization is crucial to bring this industry forward, as highlighted in the latest white paper by YCP Solidiance titled “Digitalization in the Philippine Logistics Industry”.

Common Challenges in Philippine Logistics Industry

Various businesses in the Philippines need to face some issues or challenges when trying to deliver goods around the islands, despite the countries’ development of transportation infrastructure. These problems are.

Traffic Congestion in Metro Manila

Manual processes.

Various businesses in this country still employ manual processes to deliver goods that take longer lead times and cause an inefficient flow of goods. Through this traditional practice, companies will not provide order transparency for the customers that will result in unhappy customers.

Inefficient Custom Clearance Processes

Why digitalization is key to bring the industry forward.

Source: https://ycpsolidiance.com/white-paper/digitalization-in-the-philippine-logistics-industry

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Breaking Down Barriers in the Logistics Industry in the Philippines

The Philippines needs to improve on infrastructure, logistics competence, timeliness, and customs. Photo credit: Bureau of Customs.

The coronavirus disease (COVID-19) pandemic has directly affected the logistics industry in the Philippines. Travel restrictions and border closures disrupted the flow of goods, including essential medical supplies, and increased the cost of moving cargo. The slowdown in economic activity also meant lower demand.

Logistics companies in many other countries also face the same situation. In the Philippines, however, they also have to contend with challenges that beset the industry even before the current crisis.

A new report from the Organisation for Economic Co-operation and Development (OECD) conducted a competition review and found that the cost of logistics to sales remains high in the Philippines at 27% compared with other Southeast Asian countries, specifically Indonesia (21%), Viet Nam (16%), and Thailand (11%).

The report is part of a series of competition assessment reviews by OECD for the Association of Southeast Nations (ASEAN) to identify rules and regulations that may hinder the efficiency of the logistics market. Supported by the UK Prosperity Fund, the project will publish country and regional reports of its findings.

Logistics performance

The study on the Philippines noted that the country ranked 60th among 160 countries in the World Bank’s Logistics Performance Index in 2018 and 6th among the 10 ASEAN member states. Though it scored relatively well for international shipments, ranking 4th in ASEAN and 37th globally, the index indicated that the Philippines needs to improve on infrastructure, logistics competence, timeliness, and customs.

Citing the Philippine Department of Trade and Industry, OECD said delays in customs processes, congestion, and delays in cargo delivery as the three biggest issues in logistics. It also notes that the government has launched various projects to improve logistics infrastructure under its Build! Build! Build! Program.

A strong logistics sector is vital to sustained economic growth and critical to recovery from the COVID-19 crisis by keeping the supply chain moving. For one, it plays a major role in the efficient transport, storage, distribution, and handling of the temperature-sensitive COVID-19 vaccines.

According to the report, the market for logistics transport services in the Philippines is estimated at $11 billion. The industry accounts for 4% of the gross domestic product, with road transport contributing 40% and maritime transport, 35% of freight transport revenue. Road transport is used mainly for moving goods to and from ports within the country’s many islands. Maritime transport is used both for domestic and international cargo.

The industry also includes freight forwarding and warehouses, where 75% of operators are micro- and small enterprises, and small package delivery services, where demand is being driven by a booming e-commerce estimated at $970 million in 2019.

Policy recommendations

Based on its assessment of relevant Philippine laws and regulations, the OECD report recommended policy reforms and measures to reduce barriers to competition and market entry for road and maritime freight transport, freight forwarding, and value-added services.

“These policy recommendations contribute to reforms that can help the Philippine economy resume sustainable growth and job creation by enhancing competitiveness, encouraging investment and stimulating productivity in the logistics service sector, with knock-on economy-wide effects and benefits for its consumers,” said Greg Medcraft, financial and enterprise affairs director at OECD, in the report.

For freight transport, the study gave the following key recommendations:

• Clarify through legislation that freight transportation is not a public utility and does not require a 40% cap on foreign equity.
• Use a single application process for all licenses and permits for trucks for hire.
• Ensure the independence of port regulators by separating the operational and commercial functions of port authorities from their regulatory powers.
• Allow operators to carry out dry-docking requirements in standards-compliant shipyards overseas.
• Remove any overlapping requirements (e.g., safety certificates).

For freight forwarders, the recommendations include

• a single regulator for the logistics sector regardless of whether air or sea-based transport is used,
• removing indicative rates for freight-forwarding services to discourage price collusion, and
• accreditation of freight forwarders on a national level.

For small package delivery services, OECD suggests the following:

• Allow foreign players in the express-delivery services market.
• Remove minimum rates for postal services or increase transparency in calculating rates.
• Grant a license to every eligible applicant for courier services.

In addition, the study also called for the creation of an online database of all laws and regulations, lifting the capital requirements for logistics providers or imposing the same requirements for both domestic and foreign providers, and digitalization of application procedures.

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OECD, PCC launch reviews to steer growth, competitive neutrality in logistics sector

PRESS RELEASE 2021-003 29 January 2021

The Organisation for Economic Co-operation and Development (OECD) and the Philippine Competition Commission (PCC) launched 2 reports today, culminating an in-depth competition assessment of the logistics sector in the Philippines.

The OECD reports, “Competition Assessment Reviews: Logistics Sector in the Philippines” and “Competitive Neutrality Reviews: Small-Package Delivery Services in the Philippines,” studied 96 relevant laws and regulations and presented 99 specific pro-competition recommendations to support efforts in boosting the country’s logistics sector and leveling the playing field between private and state-owned firms.

“The PCC supports the pro-competition initiatives of government to modernize and simplify its processes and eliminate red tape. A competitive logistics industry is vital to recovery and key to increasing consumer welfare in the new normal, especially with the rise of digital commerce in bridging supply and demand in our markets,” said PCC Chairperson Arsenio M. Balisacan.

The first report reviewed regulatory constraints on competition in the logistics sector for road and maritime freight transports, freight forwarding, and value-added services. The second study focused on small-package delivery services to demonstrate how competitive neutrality is applied in the logistics sector, in this case between private firms and the state-owned Philippine Postal Corporation (PHLPost).

The review recognized the logistics sector’s crucial role in the Philippine economic development with a market size of USD 11 billion, which accounts for approximately 4% of the country’s gross domestic product (GDP).

OECD found that the cost of logistics to sales remains high in the Philippines, approximately 27% higher compared to other ASEAN countries. The study cited that the country ranks 60 in the World Bank’s Logistics Performance Index (LPI) in 2018, with timeliness and customs considered as the two most challenging areas and low scores for infrastructure and logistics competence. The Build! Build! Build! (BBB) program, however, is expected to improve the country’s infrastructure and logistics performance.

The reports flagged competition issues in the logistics sector as 1) rules that may limit market entry , 2) exemptions from competition law , and 3) rules granting preferential treatment only to certain companies resulting in uneven competition in the market .

Recommendations from the OECD review follow pro-competition views and international best practices to benefit the logistics sector and the country as a whole, including:

• Clear separation between the regulatory and operational functions within the Philippine regulatory environment. Regulatory bodies should avoid being operators themselves that compete with private firms in a sector they regulate.
• Concentrating in a single ministry the responsibilities for the regulation of freight forwarders, regardless of their mode of transport, to decrease business costs.
• Amending the Public Services Act to clarify that freight transportation and logistics are not public utilities to remove barriers to entry and encourage more firms in the market.
• Ensuring adequate compensation to PHLPost for the execution of its public service obligations, including delivering letters to all parts of the country.

( See summary of main recommendations below )

“Ultimately, the policy recommendations in the reviews are about investment, jobs and growth. There is a need to reduce unnecessary legal and regulatory restrictions to competition, thus bringing prices down, and improving the quality of goods and services and increasing innovation,” said Antonio Gomes, OECD Deputy Director for Financial and Enterprise Affairs.

The reports are part of a region-wide project to foster competition under the ASEAN Competition Action Plan 2016-2025. The assessments were conducted in partnership with ASEAN and the UK Government.

“The UK government fully supports the goals and initiatives under the ASEAN Competition Action Plan 2016-2025 to help member countries build a fair and competitive environment where innovation, entrepreneurship, investments, and trade and industry could thrive,” said Daniel Pruce, UK Ambassador to the Philippines.

The OECD reviews covered 96 pieces of legislation and cited 76 specific legal or regulatory pro-competition recommendations to improve the logistics sector in the Philippines. The study also offered 23 competitive neutrality action points to support efforts in leveling the playing field between private firms and government-owned enterprises in this sector.

Here is the summary of the main recommendations:

Competition Assessment Reviews: Logistics Sector in the Philippines  (pp. 9-11)

Road freight transport

• Clear guidelines should be issued on application requirements for road freight transport licenses. Certain evidentiary requirements should be revised, such as the provision of a haulage contract and proof of garage.
• Implement the online database or system established so the Land Transport Office (LTO) can undertake the CPC confirmation process directly without having to consult other authorities.
• Make all licenses and permits required for trucks for hire available through a single application to a single agency. Port-related activity permits should be removed.
• Introduce roadworthiness standards for trucks with a transition period for current market operators, rather than implementing the ban on vehicles, which are more than 15 years old.
• A national authority, such as the Department of Transportation (DOTr) should supervise fees charged by local government units (LGU) and publish an annual report detailing all authorized fees. Alternatively, national legislation that explicitly prohibits LGUs from raising additional pass-through fees should be introduced.

Maritime freight transport

• Structural separation between the regulatory, operational and commercial functions of the Philippines Port Authority (PPA) and of regional port authorities such as the Cebu Ports Authority (CPA), should be ensured.
• Maritime authorities should work together to remove any overlapping requirements, for example, safety-certificate requirements.
• The framework for the regulation of port charges by the port authorities, notably PPA, should be revised in order to separate its revenue gathering functions from its regulatory activities.
• Maritime Industry Authority’s (MARINA) power to intervene in domestic shipping rates should be removed.
• Authorities should make it easier for pilots to obtain multiple licenses and so work across pilotage districts. Foreign equity limits should be relaxed for the provision of port services and the awarding of contracts.
• MARINA’s ability to establish and proscribe domestic shipping routes or to require the provision of shipping services should be based only on safety considerations or apply in times of national emergency.
• Visa requirements for foreign crews should be clarified and the duration of the required visa extended. Nationality requirements for crew should also be revised.
• Operators should be allowed to carry out repairs, alterations and fulfil any dry-docking requirements in overseas shipyards that impose equivalent standards to those required in the Philippines. There should be no compulsory association requirement for shipyards.

Freight forwarding

• Responsibilities should be concentrated so that a single ministry regulates all freight forwarders regardless of their mode of transport.
• Shipping lines should be explicitly allowed to establish freight-forwarding businesses.
• Memorandum Circular (MC) No.01 Series of 2005, which prescribes indicative rates and charges for freight-forwarding services, should be repealed.
• The requirement for minimum share capital specific to each type of freight forwarding activity should be removed and the general regime for commercial companies applied.
• Annual reporting for freight forwarders should be considered, instead of quarterly or bi-annual reporting.
• Accreditation of freight forwarding on a national level should be allowed and removal of the requirement for branch offices should be considered. The authorization procedure for individual branches of freight forwarders should be removed or all physical offices should be permitted to be accredited in one application.

Small-package delivery services

• Foreign participation in the market for express-delivery services should be allowed.
• Minimum prices for postal services including small packages and letters should be removed. If not, DICT should at least increase transparency around the mechanism used to calculate minimum rates.
• Every applicant for courier services that fulfils stated conditions should be granted a new license.

Horizontal and others

• Freight transportation and logistics should no longer be classified as public utilities. As a consequence, this will remove the 40% foreign equity limitation on these sectors.
• Freight transportation and logistics should be removed from those sectors included in the definition of “public services” in the Public Service Act and the requirement to obtain a certificate of public convenience (CPC) should be removed. If freight transport and logistics were to continue to be classified as public services, remove the economic-needs test from the requirements to obtain a CPC.
• Each logistics authority should publish the complete list of legislation it administers on its website. Authorities should revise legislation to include new amendments or alternatively, list the main legislation and then provide links to any amendments. Every piece of legislation should include subsequent amendments so that all legislation has a consolidated, updated version. Ensure that regulations are published on the Philippine Business Regulations Information System (PBRIS), which will soon be launched by the Anti Red Tape Authority (ARTA).
• The digitalization of all application procedures for logistics-related authorizations should continue and online applications should be allowed.
• The requirement for 100% Filipino executive and managing officers in public utilities should be eased to allow a higher percentage of foreigners in high managerial positions, in order to attract foreign investment. Restrictions based upon citizenship should be replaced by residency requirements.
• Where foreigners are allowed to participate in procurement processes, national preferences should be eliminated to ensure that the most competitive bid is chosen. If necessary, a transition period could be implemented.
• All minimum capital requirements should be removed. Alternatively, the minimum capital requirements for foreign investors should be amended to align them with domestic requirements

International agreements

• TradeNet, the Philippines’ National Single Window, should be activated and made operational as soon as possible. Competitive Neutrality Reviews: Small-Package Delivery Services in the Philippines (pp. 11-12)
• Adequately compensate Philippine Postal Corporation (PHLPOST) for the fulfilment of its PSO; based on other countries’ experience, the PSO can be funded in various forms including: a) direct or indirect transfer payments from the government; b) granting access to PSO through public procurement; or c) contributions of other service providers or their users into a universal PSO fund.
• Adequately compensate franking privilege services; this can take various forms (such as foregone dividends by the state), as long as they are identified and properly accounted. Compensation should be detailed in legal provisions or through contractual mechanisms, rather than ex post negotiations. The contractual mechanism should take into account, for instance, the quality of franking privilege services using objective criteria. Moreover, compensation may be periodically adjusted taking into account any quality improvements in PHLPOST’s franking privilege services.
• Ensure that PHLPOST keeps separate accounts for the provision of franking privilege services.
• Limit the cases where PHLPOST’s ownership entity needs to obtain the Philippine president’s ex ante approval for significant transactions, such as high-risk transactions or transactions exceeding a certain value.
• Subject PHLPOST’s financial statements to independent external audit.
• Amend the Postal Service Act to clarify that PHLPOST does not exercise any regulatory powers on the industry.
• Ensure that the DICT Act and the Implementing Rules and Regulations of the DICT Act explicitly state that Department of Information and Communications Technology (DICT) executes the regulatory role in the relevant sector.
• Ensure that the DICT Act and the Implementing Rules and Regulations of the DICT Act explicitly state that Postal Regulation Division of DICT (DICT-PRD) regulation applies equally to PHLPOST and its SPDS competitors.
• Amend Section 12 of the Postal Service Act to reflect that the state will not grant any preferential (financial) treatment to PHLPOST.
• Consider mechanisms (such as guarantee fees) that impose compensatory payments to the Bureau of the Treasury from GOCCs that benefit from lower borrowing costs thanks to state guarantees, compared to private companies in comparable circumstances.
• Ensure that PHLPOST’s relations with state-owned financial institutions are on commercial terms and minimize the risk of conflicts of interests, such as PHLPOST’s directors also sitting on the boards of state-owned banks.

No. of screened pieces of legislation, restrictions and recommendations  

Notes: No freight transportation by rail currently occurs in the Philippines. There is no legal framework for the warehouse sector. Relevant legislation includes those classed as “Horizontal/others”. Source: OECD assessment-project team.

REFERENCE: Penelope P. Endozo [email protected] Public Affairs Division Philippine Competition Commission

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Key Steps in Digitalizing the Philippines' Logistics Industry

The future of the Philippines’ logistics industry lies in creating efficient and effective solutions through digital technology.

The logistics industry is one of the Philippines’ most essential: with 7,107 islands in the archipelago, transporting goods and services is an important part of daily life. The industry makes up 4% of the country’s total GDP, and was valued at a whopping USD 13 billion in 2019. Increasing commercial activity and flourishing international trade make this sector very attractive for investments and development, especially in the digital space. 

According to the white paper Digitalization in the Philippine Logistics Industry by YCP Solidiance and the Supply Chain and Management Association of the Philippines (SCMAP), investing in digital technology is crucial for the logistics sector’s growth. The rise of e-commerce—as well as new consumer requirements for transparency and speed—demands for more efficient and connected logistics that the Philippines’ traditional players currently do not offer.  

Why embrace digitalization?  Traditional logistics players are still dominant within the sector, but the shift to a “new normal” because of COVID-19 and Filipinos’ growing acceptance of digital technology has put e-commerce at the forefront. In 2018, e-commerce revenue in the Philippines amounted to USD 840 million and is expected to grow even more in the coming years. The country’s biggest e-commerce players, Lazada and Shopee, receive an combined 39 million visits each month as more Filipinos see the need for digital-based goods and services. 

Although e-commerce has changed the landscape of shopping, it also brings with it new and complex logistical challenges. For example, consumers now expect full transparency and efficiency in almost every step of the logistical journey (such as order tracking), which is only possible through digitally powered means. In fact, 70% of the country’s retailers cite delivery speed as their primary logistics challenge. 

While newer players like Lalamove and Ninja Van are aiming to fill in the gaps in the traditional logistics process—there is a need for the entire sector, even for the more traditional players, to embrace digitalization. 

Mapping out a digital strategy  Digitalization presents tremendous opportunities for different players and organizations to resolve long-standing operations issues and improve efficiency through three key steps: 

• Procure: Hire digital experts and avail of the necessary software and hardware for your specific needs. This path is ideal for both government agencies with funding and private companies who want to maintain their independence in overall management and operations.  
• Partner: Companies may also acquire logistics capabilities through investments and partnerships with other players that have the means to swiftly digitalize processes. 
• Participate: For players without the capability to procure or acquire their own digital services, utilizing already existing third-party digital platforms and integrating their native processes and services may be the best solution.  

Long-term growth  With the shift to a “new normal” and the swift growth of industrial and commercial ventures, the digitalization of the logistics industry needs to materialize quickly. Digital solutions present the most economical and effective answer to bottlenecks and long-standing manual inefficiencies. 

They key approach to ensuring proper assimilation to digital technology is to map out the logistics company’s specific objectives and find the right path to becoming digitally-powered. To learn more about these key strategies in-depth and to get a deeper overview into the Philippine logistics industry, download our full report here . 

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REI Co-op and DHL Global Forwarding Partner for a More Sustainable Future

The milestones of a sustainable logistics story

REI Co-op is a specialty outdoor retailer and the largest consumer cooperative in the United States. The outdoor industry leader has put the planet first for 85 years and firmly believes in the power of cooperative action.

Staving off the worst impacts of climate change requires not just governmental policies, but collaboration between like-minded business leaders. In DHL Global Forwarding, REI found a like-minded logistics provider and partner who supports its ambitious climate agenda.

About REI Co-op

Specialty Outdoor Retail

REI Co-op’s industry

23 million members

Lifetime membership

81 U.S. locations

In 41 states and the District of Columbia

A Company With a Strong Sustainability Track Record and Goals

Start of REI’s active strategy to reduce greenhouse gas emissions

 REI stores and distribution centers ran on 100% renewable energy

Operations are climate-neutral

Ambitious goal to reduce emissions by 55% from a 2019 baseline

A Long-Standing Partnership Focused on Sustainable Logistics

2011: pioneering sustainable cargo transportation.

REI chose DHL Global Forwarding because of our uniquely comprehensive expertise in sustainable logistics. The two companies partnered during the early development of DHL’s carbon reporting tools, including the first GoGreen dashboard. 

2018: Celebrating REI’s sustainability journey

REI’s sustainability journey was featured in Unlock the True Value of Your Supply Chain – a DHL whitepaper on how businesses can add value through sustainable supply chain management. The paper highlighted REI’s embrace of circular business models, which reduce waste, save customers money, and create new revenue streams. 

2022 and beyond: the next sustainability frontier

Since 2022, REI is also working with DHL Global Forwarding to leverage new sustainable fuels in pursuit of its climate targets. The co-op has used DHL GoGreen Plus since early 2022 to inset their full container load (FCL) ocean freight shipments through a switch to sustainable fuels.

What REI Co-op Has to Say

Ready to Start Your Sustainable Logistics Journey?

Embark on a journey to decarbonize your transport today with DHL Global Forwarding. Let us know more about your business to get started.

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Case Study on the role of Philippine Logistics in E-commerce and Cross border trade

• Eurice Marie Pua

Description

Abstract: The Philippines has the potential to expand its influence in the regional and global digital markets. Economic development driven by consumption improved telecommunications infrastructure, and an increasing percentage of the population with internet connection are just some of the primary reasons for positioning the Philippines as a prominent player in Southeast Asia's e-commerce market. By January 2020, over half of the 105 million Filipinos were already shopping online. This figure is predicted to increase to 54.7 million by 2024. In addition, consumers and companies are being compelled to go digital by the current COVID-19 outbreak. To effectively capitalize on the current economic conditions, Filipino SMEs need access to more affordable and dependable methods of importing raw materials and distributing their goods. As more SMEs become aware of the potential benefits of e-commerce, there may be an increase in demand for small package deliveries to support the SMEs' smaller scale of operations. Generally, significant firms may import raw materials and export finished goods at a low cost by using high-volume shipments.

On the other hand, local SMEs operate on a considerably smaller scale and often face costly shipping and delivery costs when importing smaller raw materials, limiting their manufacturing options. Thus, more dependable and affordable logistics and transportation for small packages may enable local SMEs to save expenses, increase productivity, and perhaps invest more in innovation. The Philippines is archipelagic, making it a challenge for logistics. The government's initiative in connecting the three main islands: Luzon, Visayas, and Mindanao, can help flourish cross-border trade and help SMEs expand their business locally and internationally. Recommendations in achieving policy and regulatory clarity around the logistics sector will help attract private investments and improve innovation. A review of regulatory requirements for small parcel delivery providers is necessary to support e-commerce. Legal and regulatory frameworks should address enhancing trade flows, safety and security, and the control of physical goods by providing advanced data across various business models.

Keywords: Philippines, Logistics, E-commerce, Cross border trade.

Title: Case Study on the role of Philippine Logistics in E-commerce and Cross border trade

Author: Eurice Marie Pua

International Journal of Novel Research in Marketing Management and Economics

ISSN 2394-7322

Vol. 10, Issue 1, January 2023 - April 2023

Page No: 32-42

Novelty Journals

Website: www.noveltyjournals.com

Published Date: 18- February-2023

DOI: https://doi.org/10.5281/zenodo.7654495

Paper Download Link (Source)

https://www.noveltyjournals.com/upload/paper/Case%20Study%20on%20the%20role%20of%20Philippine-19022023-3.pdf

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Publication: Philippines : Study on Agribusiness, Infrastructure, and Logistics for Growth in Mindanao

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Voldega3 Philippines

Flexible infrastructure and easy-to-maintain hardware, the Mobile Pallet Racks solution is Voldega3 Philippines' first step into automation that will handle ambient to controlled temperature goods storage for their clientele across the food and consumer goods spectrum.

Optimal warehouse performance in limited space

First step into automation: universal voldega3 logistics corporation introduced a semi-automated warehouse facility in cebu – philippines.

Metro CEBU is the home to 80% of Philippines shipping companies, it is also the second largest metropolitan area in the country (surrounded by 167 islands and islets). Due to its narrow coastlines and deep mountain terrain, shippers and logistics service providers on this tropical island often had to deal with high land prices in commercial districts and port areas. To innovate and design warehouses that would defy the fundamental of land expansion – horizontally, Universal Voldega3 Logistics Corporation (Voldega3) took their first step into warehouse automation with SSI SCHAEFER.

With clientele across the food and consumer goods spectrum, Voldega3 invested in SSI SCHAEFER Mobile Pallet Rack , a semi-automated storage system that could handle ambient to controlled temperature goods storage. The infrastructure is flexible, and the hardware is easy to maintain, for such a setup to be implemented in the province, it almost promises a 0% downtime, and with such a stable warehouse operation, Voldega3 customers are more confident in their logistics and warehousing services.

Optimise up to 85% of storage capacity

Maintain high efficiency and throughput

Direct access to pallets slots

Safe and accident-free operations

Earthquake-proof design

Space utilisation and cost-effectiveness – all from one system

In 2020, when the world went into isolation, Voldega3 set up their newest facility. Using the Mobile Pallet Racks to store six levels of pallets, the 3,000 m² facility houses a total of 8,093 pallet locations. Through electrically driven carriages on floor tracks, the solution eliminates the need for multiple aisle spaces. Additionally, by tapping into the vertical volumetric space, it reduces the warehouse footprint by 45%. Due to the excellent space utilisation of the system, Voldega3 saved 1,400 m² of floor space which will be used for other logistics activities such as receiving, dispatch and staging.  Reliable and responsive support through crisis

Since Voldega3’s facility was built during the nation’s lockdown, strict quarantine rules and Covid19 safety protocols are necessary and implemented throughout the development period and till today. The materials supplied and spare parts required were critical to the project’s timeline, thanks to SSI SCHAEFER’s factory located in Simpang Renggam – Malaysia and the excellent logistics and coordination between Philippines and Malaysia offices, the construction of the facility was liberated from the temporary supply chain meltdown faced by the world.   

Designing a semi-automated warehouse for tomorrow’s growth

Implementing warehouse automation assures operational efficiencies , the inherent benefit of introducing technology also supports the organization in preparation for a younger workforce and ageing employees since labour-intensive tasks are eliminated. Aligned with Voldega3’s mission to provide the industry with world-class technology-driven warehousing services, their first step into automation would set the foundation to a modernized warehouse whenever they are ready.

“Voldega3 is the first dry store logistics facility in the Philippines using semi-automated storage system. With SSI SCHAEFER’s Mobile Pallet Racks, we are able to put 8,093 pallet positions into our 3,000 m² storage area; which would otherwise require 5,500 m² for the same storage capacity. Despite Covid-19 lockdown restrictions, we’ve got the full support from the team at SSI SCHAEFER through video conferences, online tutorials and local support in the Philippines to ensure that our system is installed in just three months.”

A-i45 Webinar: Manual to Semi-Automated Warehouse Solutions from SSI SCHAEFER

The First Semi-Automated Facility Voldega3 Philippines & SSI SCHAEFER

Project Goals:

Optimise warehouse footprint of 3,000 m² for the storage of 8,093 pallet locations

Efficient operation through handheld remote control and PLC operated bases

Maximise storage density while maintaining direct access to pallet slots

Reduce operation cost with excellent space utilisation

Download our Best Practice Guides here!

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A Best Practice Guide to getting started with automation

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Embracing Digital Transformations to Optimize Last-Mile Deliveries in the Philippines

One of the most critical components of the supply chain is the last mile. A key factor in impacting customer satisfaction and loyalty to your brand or service, last-mile delivery execution is not only an important but an extremely nuanced undertaking for LSPs.

Philippine industry is experiencing rapid growth. This has been driven by factors such as increased demand for food, beverages, and manufacturing products; the rise in internet users — 73.9 million recorded in the Philippines in 2021; and investors like China, Japan, Taiwan, and Holland being attracted to the market.

A Ken Research report estimated that the Philippine Logistics Market will grow at a CAGR of 8.2% between 2022 and 2027.

In such a scenario, freight forwarders and other LSPs must realize the massive market potential and find ways to optimize last-mile delivery processes. Digitalization will play a key role in navigating the challenges posed by regional conditions, and help businesses that adopt it stay ahead of the game.

Let’s explore some of the challenges faced by logistics providers that obstruct efficient last-mile delivery:

Complex Geography

The Philippines is an archipelago, comprising a group of more than 7,000 islands. Oftentimes, waterways have to be used to reach last-mile destinations. Such archipelagos also mean that there are a lot of remote areas, where delivering goods at the doorstep is a massive task.

Incorrect Addresses

Delivery addresses not being specified correctly lead to failed deliveries. Re-deliveries also raise the cost per delivery. The situation is further complicated when, as is the case with e-commerce deliveries around the world, customers opt for a return/exchange of the product.  Although there seems to be no official data for the Philippines, the issue of incorrect addresses is not just limited to the Philippines. A Logistics Middle East article stated that incorrect addresses affect 7 billion of e-com revenue in the Middle East.

Poor Road & Traffic Conditions

While the national highways and expressways have been developed under government initiatives, last-mile deliveries mean that vehicles have to take ‘the road less traveled’. Some areas may not have the desired road quality to facilitate smooth deliveries. Additionally, traffic congestion in major cities hamper the speed of deliveries. A 2022 report by TomTom Traffic Index ranked Manila 2nd in the list of cities with the worst traffic congestion.

Much like a mathematics question containing some ‘given’ information that cannot be changed, so, too, does the Philippine landscape hold some unalterable challenges. Given these circumstances, adopting digitalization in resolving these last-mile challenges is all the more important if companies want to thrive and earn the satisfaction of the Filipino consumer.

Let’s explore the benefits that digital transformation brings to businesses and consumers with respect to last-mile deliveries:

IoT devices such as GPS trackers can be used by companies to obtain much-needed visibility on the precise location of their goods, in real-time. With customers also able to track shipments from their end, they can make suitable arrangements to ensure successful deliveries from their end. An increased sense of satisfaction is a natural by-product.

In addition to goods, IoT also helps maintain vehicle safety – known as Asset Tracking Solution. ‘Condition Monitoring’, which observes the health levels of sensitive and perishable goods, is another advantage that is possible through IoT.

AI & ML

Many logistics management software have provisions to delve into route optimization techniques via AI and ML. With these in place, on-the-fly adjustments according to factors like traffic, weather, or any such event are undertaken, improving speed-to-door and delivery costs.

Utilizing Artificial Intelligence and Machine Learning algorithms also analyze delivery volumes according to location, and filtering through multiple parameters such as seasonal patterns, customer preferences, etc. This allows companies to accurately forecast demand for a region and thus allocate delivery resources accordingly, improving the demand-supply match and optimizing resource utilization

Data Analytics and Predictive Insights

Subsets of AI, data analytics and predictive insights give companies a deeper look into important last-mile delivery aspects, such as assessing the risk associated with specific delivery locations or customers. Apart from physical safety measures, online security can be maximized by identifying data anomalies and detecting fraudulent activities.

Blockchain Technology

Blockchain creates a decentralized information recording and tracking system where every step of the delivery process, from package pickup to delivery, is recorded. Blockchain allows for secure recipient authenticity verification and keeps digitized records of all transactions, improving the security, transparency, and documentation of last-mile deliveries. An example of a blockhain technology is TradeChain, which facilitates seamless data connectivity as well as integrations with payment portals, e-invoices, GST Filing, Customs, Freight Forwarding Shipments, Bank Invoices, etc.

Last-mile delivery is a key differentiator for your customers. It can even be argued that the entire perceived value of the brand resides in the effectiveness, or lack thereof, of the last-mile delivery. From the macro outlook, the Philippine logistics market is set to grow rapidly. From the zoomed-in perspective, capturing market shares may well boil down to things like last-mile deliveries, and it is imperative that businesses take the assistance of technology to optimize it, especially considering some of the unchangeable dynamics of the Philippines.

PREVIOUS COLUMN: Going Digital: What it Means for the Philippine Freight Forwarding Industry

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Watch: Romark Logistics and Gather AI: A Case Study

A case study about the application of drones employing artificial intelligence to the warehouse operations of Romark Logistics .

Romark Logistics is a third-party logistics provider with a focus on serving the consumer goods, pharmaceutical and retail sectors. It places a heavy emphasis on technology, with significant investment in automation and robotics, according to chief information officer Joe Warakomski.

Even with its reliance on technology, Romark was facing labor shortages, Warakomski says. At the same time, it needed a system that would maintain high levels of inventory accuracy. Romark turned for help to Gather AI , a specialist in warehouse drones for inventory management, because of the latter’s similarly intensive focus on automation, he adds.

Sean Mitchell, vice president of customer success with Gather AI, noted that the company’s drones perform autonomous inventory data gathering. The units take images of product at every location, using artificial intelligence to read barcodes, then compare the information directly with the facility’s warehouse management software (WMS) system.

Introduction of the Gather AI drones into Romark’s warehouse happened in phases. “We started small but were thinking big,” Warakomski says. Following a successful pilot program, the provider was able to rapidly expand the drones’ coverage to some 64,000 pallet positions.

It’s always a challenge to bring new systems into an ongoing operation, which can’t afford to slow for an instant. “Gather worked around our schedule,” Warakomski says. “And the amount of technology needed was fairly low.”

Mitchell says Gather AI was able to get the drones up and running, and complete worker training on the units, in just three weeks.

Romark was skeptical at the outset about Gather AI’s ability to get the drones into place in such a short time. In the end, though, the company experienced “a 5x improvement in our inventory process” with 99.9% accuracy, Warakomski says.

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Teleperformance hailed among prestigious Philippines Best Workplaces in 2024

Taguig, Philippines, March 2024 — Teleperformance (TP) in the Philippines, a leading global digital business services company, has once again achieved the remarkable feat of being named one of the Philippines Best Workplaces™ . Ranking fifth on the prestigious list, the organization received the award at the Grand Hyatt Manila on March 19.  "Being named one of the Philippines Best Workplaces™ is a huge honor for our entire team at Teleperformance Philippines. Our leadership team is committed to making our mantra a reality for our team members across the Philippines. I’ve said this once and I’ll say it again: our people are our greatest asset ,” said Chief Executive Officer Rahul Jolly. 

The Top 10 list is determined by Great Place To Work® , a global leader in workplace culture,  which annually surveys over 20 million employees worldwide to determine positive workplace experiences and help organizations build the trust of their employees. 

In 2023, TP made it into the top five of the Philippines Best Workplaces™ in IT-BPM . The organization also celebrated a significant milestone by receiving its sixth Great Place to Work recertification in the same year, the only organization in the Philippines to achieve this accomplishment.

"We are especially proud to receive the recognition of being named one of the Philippines Best Workplaces™ 2024 this Women’s Month. Gaining another spot on the prestigious list by the Great Place to Work® organization is a reflection of our ongoing efforts to empower people and provide rewarding opportunities to diverse individuals and communities alike. We celebrate this achievement with our entire Teleperformance Philippines team,” Chief People Officer Jeffrey Johnson stated. 

Adding to its list of accolades, Teleperformance Philippines was awarded Best in Remote Work Technology at the Contact Center World Award in late 2023.  In the same year, its LGBTQ+ employee resource group, TP Pride, was also named Pride Network of the Year by Philippine Financial and Inter-Industry Pride (PFIP).

The organization continues to distinguish itself through various programs and initiatives, such as the newly launched Skills Training to Employment Program (STEP) in partnership with the Pasig City local government, which equips impact groups with essential contact center skills; and the TP Cloud Campus , a groundbreaking work-at-home solution, which allows employees nationwide to work anywhere, securely and efficiently.

To learn more about Teleperformance Philippines and what makes the organization a certified Great Place to Work® company, visit their website at www.teleperformance.com .

ABOUT TELEPERFORMANCE IN PHILIPPINES

Teleperformance in the Philippines is part of the Teleperformance Group , Teleperformance began operations in the Philippines in 1996 and has grown to become a preferred offshore contact center outsourcing option. The company employs 63,000 people in the country and operates 45,000 workstations in twenty-six business sites located across Metro Manila, Antipolo, Cavite, Baguio, Metro Laoag, Clark, Bacolod, Cebu, Cagayan de Oro, Davao, and General Santos City. 

In 2018, Teleperformance in the Philippines was certified Great Place to Work® and became the first organization to receive the recognition. It also holds the distinction of being the largest employer and the first Business Process Outsourcing (BPO) company in the country to receive certification consistently up to the present from the Great Place to Work® institute.

 The organization has garnered recognition from various entities, including the Philippines Best Workplaces™, Philippine Economic Zone Authority (PEZA), Public Relations Society of the Philippines, International Association of Business Communicators, the National Economic Development Authority (NEDA), SGS, and International Organization for Standardization. 

 Teleperformance remains dedicated to delivering the best employment experience for Filipinos, supporting the nation's IT-BPM sector, and engaging in meaningful socio-civic initiatives to positively impact the Philippine community through the Citizen of the World (COTW) Foundation, the company’s official corporate social responsibility arm. 

For further information about Teleperformance in the Philippines, visit teleperformance.ph    

Visit the Group at  www.teleperformance.com.

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Andromeda Robotics trials AI-powered aged care companion robot

Australian-based robotics and AI startup Andromeda Robotics is undertaking initial trials with aged care provider Allity – part of the Bolton Clarke Group.

The trials involve Andromeda’s protype humanoid companion robot designed to interact with residents in a relaxed and conversational manner.

Powered by the Chat GPT-4 Artificial Intelligence platform, the robot – named Abi – can recognise residents, answer questions and tailor conversations based on previous interactions.

Thena Johnstone, National Pathways Manager, Allity, said Abi has been success with residents who enjoy interacting with it through voice.

“We have been fortunate enough to be involved with Abi from the very early stages and have watched it grow in both capability and physical stature,” she said.

“Abi now stands some 120cm tall and can gesture and move its head and eyes when interacting with residents.”

Johnstone said ongoing staff shortages across the aged care sector meant it was sometimes difficult to find times for conversations with residents. This is where a robot such as Abi can add significant value.

Andromeda founder Grace Brown said the initial trial at Allity was a significant step in the ongoing evolution of Abi – providing invaluable data for the company’s development team.

“Abi uses a mix of machine vision, Artificial Intelligence and Chat GPT to power its interactions with residents,” she said.

“Abi also relies on non-verbal cues and we have worked with advisors from animation studios Pixar and DreamWorks to make Abi’s body language as empathetic and engaging as possible.”

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Panasonic Connect Intros New and Enhanced Video Production Solutions at NAB 2024

New KAIROS mainframe, enhanced compact live switcher and software functionality to improve the efficiency and quality of video production.

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Wiesbaden, DE. 8th April 2024 –  Panasonic Connect Europe today announced a series of new products and enhancements designed to improve the efficiency and quality of video production. The latest KAIROS mainframe, compact live switcher and enhanced software functionality will be on show at Panasonic Booth C3310 at the 2024 National Associations of Broadcasters (NAB) Show in Las Vegas from April 14 to 17.

New KAIROS mainframe and functionality

Panasonic is introducing the new mainframe KAIROS Core 200 AT-KC200L1 and the latest software update (version 1.7), including smart routing functionality. The AT-KC200L1, which supports SDI I/O as standard, and the new smart routing functionality [1] , provide improved video quality and productivity when using KAIROS for broadcasting, events, sports and in the corporate and education markets.

The AT-KC200L1 mainframe is equipped with similar functionality as the second-generation KAIROS Core 200 (AT-KC200) announced in June 2023. It supports 24 inputs / 12 outputs (FHD) as standard [2] but offers more flexible video production to customers using SDI-based video production systems. In addition, up to 32 inputs/16 outputs (FHD) can be supported by installing the optional product AT-KC20M1 SDI I/O Board, released in February 2024.

The 1.7 version software update is compatible with all KAIROS Mainframes (AT-KC2000/2000S1, AT-KC200/200L1 and AT-KC1000/KC100) and enables a new function called Smart Routing. It automatically imports video from the network switch [3] into KAIROS to enable the virtual handling of a larger number of input sources. As a result, video bandwidth limitations are removed when using a large number of inputs on KAIROS for video production.

[1] Optional equipment is required for IP in/out of the AT-KC200L1, future support. [2] IP input/output will be supported in the future. [3] For devices that have been confirmed to work with KAIROS Alliance Partners, please refer to the KAIROS Alliance Partner's webpage.

Live switcher enhancements

Panasonic has also announced the May 2024 release of exciting enhancements to its AV-HSW10 compact live switcher to improve the efficiency and quality of video production for webinars and other live events. The new AV-HSW10 will combine the stability of Panasonic's broadcast and professional hardware switchers with the scalability of a software solution. Updates include firmware version 2.00 for streamlined setup and the free AV-SF10 software control panel for efficient one-person operation and remote operation.

The updates will further enhance seamless video-production environments connected to Panasonic PTZ cameras, including support for various IP transmission standards designed for today's video-production needs. Also, integration with RP Link and tally control via IP connections will facilitate high-quality online communication.

Following the high-end AV-UHS500, the updated AV-HSW10 will also generate a moving colour-bar to expedite setup time at live events, especially those with LED walls and large displays. Colour bars available in moving and still picture mode will enable checks for missing dots in LEDs and displays and video output for IP connections, eliminating the need for an external test signal generator.

The new software control panel will allow switcher functions to be conveniently controlled from a PC or tablet (Windows 10/11 or MacOS Monterey/ Ventura/Sonoma). Detailed settings and confirmation of input/output sources, conventionally performed with buttons and knobs, can be easily executed with a PC keyboard or touch screen. Functions exclusive to a software control panel, such as sequencing of shot memory, direct write/replace of still memory will be possible for more efficient pre-shoot preparation and on-shoot review. The GUI will integrate the control screen, live video monitoring and multiviewer, similar to Panasonic’s popular large switchers, for easy switching between multiple video inputs/outputs. The intuitive GUI can be easily used by a single person, including operators with minimal experience. 

New PTZ Camera and Teams certification

In addition, the NAB Show will be the first chance to see the latest AW-UE30 PTZ camera in operation. The UE30 is small, quiet, affordable and ideal for education and business meetings as it features built-in auto tracking The AW-UE4 PTZ camera will also be available for demonstration following its recent certification for use with Microsoft Teams.

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