The logistics market and logistics company Philippines are expected to reach more than 1 trillion Philippine Peso by 2024. This market is going to be affected by the pandemic that attacked the country. That market is also expected to revive back with a growth rate that is much faster.
The Board of Investments in the Philippines has provided some incentives that include income tax holidays for 3 to 6 years and also 0% VAT for the cold chain companies in order to locate them in the 30 poorer provinces and areas that are less developing.
Transportation and E-Commerce Development
Logistics are always related to transportation and e-commerce. DOTr and DPWH has been allocated PhP 55.5 billion and PhP 458.6 bn respectively in order to improve the road transport in the major urban cities including Metro Cebu and Metro Manila, and also in the other areas like Mindanao.
The demands of many products through e-commerce have increased. This is going to increase the demand for warehousing and last mile deliveries in the Philippines. The pandemic is affecting the Philippines logistics, imports from other countries like Hong Kong and China will fall.
It will affect the volumes of the sea and road freight that are transported from the other countries to the port of Manila as well as the other Philippines’ areas.
Logistics Company Philippines Segmentation
First segmentation of the logistics market in the Philippines is freight transportation. It is the biggest part of the logistics sector in the Philippines. The sea freight is dominating both volume and revenue of this logistics sector since this country depends on imports from the other countries.
The Philippines have been importing from China, Japan, Taiwan, and the United States. Road freight is the second part of the sector. It is responsible for the domestic transportation from in the country since the Philippines is an archipelago location but is suffering from assorted challenges.
Some challenges faced by the road freight include congestion on the road and the bad infrastructure. But the Philippines’ government is trying to fix this problem by the “Build, Build, Build” program.
Warehousing Sector in the Philippines’ Logistics
The warehousing market in the Philippines has shown a steady growth in the last few years. It is proved by many developers of real estate that enter the logistics market, by the help of Mergers and Acquisitions. To earn the adequate IRR, developers move out of Metro Manila.
They move out because of the less growth especially in the warehousing rent compared to the prices of the land. Most warehouses are filled with beverages and food and this is giving the highest revenue amount.
Cold Chain Sector in the Philippine Logistics Industry
In 2019, the Philippines’ cold chain market has shown a significant hike, primarily because almost every company is investing in the pallet positions in the Philippines. The cold storage is contributing to the bigger revenues shared with much more captive warehouses in this country.
The cold storage sector in the logistics company Philippines is dominated by the chiller or freezer convertible pallets compared to the ambient ones. Main users of the cold chain services include the seafood, meat, and frozen food industries.