Challenges in logistics need to be addressed, says expert

A huge challenge in investing in Mindanao is the logistical support, top executives said over the weekend.

Because of this, big companies have been stepping their games to help their firms overcome this hurdle, said Norman Adriano, executive director of Supply Chain Management of the Philippines (SCMAP), in an interview during the 3rd Mindanao Shipping Conference at Waterfront Insular Hotel.

Adriano said the current trend is big companies in the countries “are going into logistics because it is the next frontier.”

He said at present, one of the biggest companies that have heavily been investing in logistics is Davao City-based tycoon Dennis Uy, chair of the multimodal 2GO after buying a major stake in the company.

Uy also owns Chelsea, a shipping company that complements his other big firm, Phoenix Petroleum Philippines.
Other business conglomerates, like those being run by Manuel V. Pangilinan and the Ayala group, have their respective logistics companies to support their main businesses.

However, Adriano said a major industry problem shipping cost.

“It (still) is the shipping cost. There are more issues mostly in logistics, (but the topmost) is the cost. In the supply chain, you want to have a lower cost but any cost in the supply chain will just be passed on to the consumer,” Adriano said, adding that there is a need for collaboration to bring down the cost.

“We want (shipping cost) it to be minimized but we can at least maintain it, no increase,” he added.

He said because of the high shipping cost, local products can hardly compete in the international market.

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