Thursday, July 9th, 2020

Philippines Logistics Market Overview and Size

INVC NEWS       

New Delhi, 

The report titled “Philippines Road Freight Market Outlook to 2024 – Driven by Government Spending on Road Infrastructure and Technological Advancements” provides a comprehensive analysis of the status of the logistics sector in the Philippines. The report covers various aspects including the current logistics scenario in the Philippines, its components viz, freight transportation, warehousing, CEP, and VAS. The report especially focuses on Road freight market highlighting its issues and challenges, major growth drivers, investment in infrastructure, tech disruptions and innovations, and competitive benchmarking. The report concludes with market projections for the future of the Road freight market including forecasted industry size by revenue and Volume.

Philippines Logistics Market Overview and Size:

Philippines Logistics Sector has witnessed a robust CAGR with highest share to freight forwarding Market followed by Warehousing, Courier parcel and Express market and VAS Market. Sea and Road are dominant modes of transportation with road transportation only possible domestically due to its Archipelago location. Many real estate developers such as Metro pacific, Ayalaland, Filinvest, and SM Corporation are entering in the warehousing market through Mergers & Acquisitions. With the help of infrastructural developments, the LPI index of the Philippines reached 60 in 2018. Competence and quality of logistics services also saw an increase from the 77th position (2016) to the 69th position (2018).

Philippines Road Freight Market Overview and Size:

Philippines Road Freight Market has witnessed an average CAGR during 2014-19 due to favorable laws from CTAP, continued investment on building bridges, road congestion in metropolitan cities, and development of ports both by the government and with Public Private Partnerships. The influx of foreign players in the market in recent years, increasing consolidation, and investing in innovative technologies has stimulated growth in the market.

Philippines road freight market has been dominated by Medium Fleet Owners with around 45-50% of Fleets. Freight rates usually remain high during the festive season in September, October, November, and December with WAFC being PHP 7.5 /tonnes/km, 2019. The business flow and corridors are shifting in road freight market of Philippines. Shift towards the Ro-Ro facilities from containerized transportation of goods; helps in reducing freight time with cost reduction by 30%.

Philippines Road Freight Market Segmentation

Road Freight Market Segmentation by LTL and FTL

The Road freight market is dominated by LTL by revenues and by Volume. The average freight cost charged for LTL is higher than FTL due to additional risk in carrying multiple loads, higher insurance costs, and more. Transportation rates are high which enables small companies to charge less and win projects even via substandard services. Generally, the LTL freight prices are 15-20% higher than FTL rates due to less volume and more risk involved. Emerging technologies such as GPS tracking on LTL freight is transforming the segment to ensure more reliability and efficiency.

Road Freight Market Segmentation by type of trucks

The Country is dominated by Non-reefer trucks in comparison to reefer trucks. The ratio of reefer and non-reefer trucks is around 2:5. The reefer trucks are expected to increase in future due to more companies providing these facilities.

Competitive Landscape of Major Players Operating in the Philippines Road Market

The Trucking industry in Philippines is extremely fragmented in nature. The trucking industry is dominated by local domestic players who has large number of fleets and warehousing space providing competitive prices. The Road freight players are providing Value added services such as Kitting, Assembling, packing and other which are very important in road freight market. Online platforms such as Lalamove, Ezyhaul, Transpotify and many more are disrupting the logistics space. The major players in the Philippines Road freight market include Royal Cargo, AAI logistics, F2 logistics, LF logistics, 2GO Logistics, Kerry Logistics and many more.

Philippines Road Freight Market Future Outlook & Projections:

The Trucking Industry in Philippines will be impacted by COVID in the country and is expected to revive back in 2021 with faster growth rate. The Road freight market will experience increase in government projects for road infrastructure, increasing industrial output, and booming of e-commerce. The growing demand of perishable products such as meat and seafood industries & agricultural output will increase the cold transportation facilities in Philippines. The companies will shift focus from price wars to better quality of services with technical innovations such as E vehicles, Fleet Management Software and more disrupting the competition space.

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