How Is the Philippines Logistics and Warehousing Market Positioned?
Overview: Philippine is an Import oriented country that comprises of 7000 Islands and is dominated by sea freight due to archipelago geography. The operations of the whole country are highly cantered in Luzon Island with major congestion at Manila Ports, working with almost 90% capacity in comparison to the ideal capacity of 75%.
Due to high growth in the manufacturing and industrial sector, players have begun turning to 3PL (Third Party Logistics) for warehousing and distribution to focus on their core business activities. The government is improving its Cold chain facilities and heavily investing in road infrastructure and new ports using Public-private partnerships to reduce congestion.
Market: The logistics market has seen significant growth in the last few years, recording a CAGR of ~% during 2014-2019 primarily due to increasing infrastructure investment, e-commerce, and cold chain facilities in the Philippines. The Logistic sector performance is still not very good in comparison to other South Asian countries such as Indonesia and Thailand but has improved in the past 5 years, currently holding 60th rank in 2018 according to the World Bank.
The freight forwarding sector is the leading segment towards the revenues of the logistics industry, followed by warehousing and courier & parcel activities. The other sectors include value-added services, e-commerce deliveries and 3PL market.
Philippines Logistics and Warehousing Market
By Service Mix: The freight forwarding segment has dominated the logistics industry of the Philippines and has grown at a five-year CAGR of ~% during the period 2014-2019P. This is primarily due to infrastructural investments, increasing foreign trade, increasing export and imports by sea. The demand for cold storages is increasing in Manila and Other islands due to rising demand for meat, seafood, and other perishable products. Warehousing and CEP sector is even expected to boost by e-commerce companies opening their fulfilment centres across the Philippines. VAS is being popular with all companies providing VAS as part of their service portfolio to give all possible services to their clients under one roof.
Philippines Road Freight Market Size
Road freight market is expected to reach PHP ~ million in 2019 from PHP ~ Million in 2014 with a CAGR of ~% during the period 2014-2019P. This has been due to the Improvements in the Road connectivity between the Islands of Luzon, Visayas and Mindanao, Improving trade relations with many countries such as Europe, China, and more. Very high Road freight movements can be seen near the port of manila as it’s a major trading port and other parts of Luzon which are highly populated regions in comparison to regions in other Islands.
By Mode of Service: Philippines freight forwarding market was dominated by sea freight in terms of revenue and volume due to its archipelago geography and it is an import driven economy. It is followed by road freight which is facing a lot of challenges due to Congestion and bad road infrastructure.
By Road Freight:
The road freight is only done domestically due to its geography. The movement is done by RORO between Inter-Island and Intra Island by road. The number of trucks is increasing at ~ rate between 2014-2019P. The average freight rate is one of the highest among South East Asian Countries.
By FTL/LTL: Majority of the Volume transported by road is done on LTL basis by Revenue and Volume with Average prices charged in case of LTL is ~% higher than FTL basis.
Cost Component analysis:
Out of the total operating cost, ~ % is held by Fuel, ~% is held by salary and ~% by Toll earning ~% margin by trucking companies.
Competitive Scenario In Philippines Road Freight Market
The Road Freight Market in the Philippines is highly fragmented in nature. Companies are focusing on providing value-added services along with tracking. Trucking is dominated by Domestic companies which are local transporters having huge fleets for Inter and Intra Island transportation. The major players in the market are Royal Cargo, AAI logistics, F2 logistics, LF Logistics, 2GO Logistics, Kerry Logistics, and many more.
The parameters at which the companies are competing are Pricing, Location, fleet size, and Warehousing space, Additional services such as kitting, assembling, labeling, etc and technological advancements. Many Online demand digital platforms such as Ezyhaul, Transportify, Blackarrow, and others are extensively being used by transporters to resolve the problem of empty returns.
Philippines Road Freight Future Outlook and Projections
Philippines Road Freight Market is expected to rise at a CAGR of ~% during 2019-2024F. The logistics and warehousing are expected to rise from ~ PHP Million in 2019 to ~ PHP Million in 2024. The Road freight market is expected to increase due to an Extensive infrastructural budget in improving Road Congestion especially in metropolitan cities of Manila and Cebu, Government efforts such as Green freight policies to reduce Carbon Emissions and increasing deliveries through e-commerce platforms. The government is promoting electric vehicles in passenger transportation through benefits in kind which will become new normal in the next 5-10 years. COVID will have an impact on Road transportation due to transportation of only essential commodities in the lockdown period but will revive by 2021. Technologies such as Real-time tracking, Electric cars, and Fleet Management Software will become popular in the next few years.
Philippines Logistics and Warehousing Future Outlook and Projections
Philippines Logistics and Warehousing Market is expected to rise at a CAGR of ~% during 2019-2024F. The logistics and warehousing are expected to rise from ~ PHP Million in 2019 to ~ PHP Million in 2024. Logistics is expected to increase in the future with the rising e-commerce market due to online payment options. The government is even investing in building bridges using PPP projects aimed at reducing congestion in metropolitan cities. The cold storages are expected to increase due to the high consumption of meat and seafood products in Philippines. COVID-19 will have a significant impact on the logistics sector but is expected to revive back by 2021. Trucking Aggregators, innovations such as AI, Electric cars, ASRS and more will soon revolutionize the logistics space in the future.
Key Segments Covered: –
Freight Forwarding Market
By Mode of Transportation
Road Freight (Fleets, Volume, FTK, Price/ton/km and Revenue)
Sea Freight (Fleets, Volume, Average Distance, Price/ton/km and Revenue)
Air Freight (Volume, Average Distance, Price/ton/km and Revenue)
By Road transportation
Less than Truck load (Revenue and Volume)
Full truck load (Revenue and Volume)
By Type of Fleets (Number of Fleets)
Non reefer trucks
Fast cargo Logistics
Key Target Audience
Freight Forwarding Companies
E Commerce Logistics Companies
Real Estate Companies/ Industrial Developers
Time Period Captured in the Report: –
Historical Period – 2014-2019P
Forecast Period – 2020-2024F
Key Topics Covered in the Report: –
Philippines FTL Freight Market Rates
Philippines Sea Freight Market
Philippines Air Freight Market
Philippines Rail Freight Market
Philippines Temperature controlled Trucks
Philippines trucking cost
COVID-19 Impact on Trucking Industry Philippines
Philippines F2 logistics Market Outlook
Philippines LF logistics Market Future
Philippines Kerry logistics Market Growth
Philippines Inland logistics Industry Share
Philippines A3 logistics Market Analysis
Philippines Fast cargo Logistics Market Size
For More Information on the research report, refer to below link: –
Related Reports by Ken Research: –
Philippines Logistics And Warehousing Market Outlook To 2024 – By Freight Forwarding (Air, Sea, Land), Domestic And International Freight Flow Corridor; By Warehousing (Industrial/Retail Freight, Container Freight, Cold Storage, Agriculture And Others), Express And E-Commerce Logistics, Balikbayan Box, Third Party Logistics
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Ankur Gupta, Head Marketing & Communications