How can PH address its logistics issues? UPS officials weigh in

MANILA — Aside from high power costs, expensive logistics have also been cited as a major factor keeping the Philippines from effectively competing with other countries.

But how can the Philippines address the high logistics costs?

Albert Sapaen Jr., head of UPS air operations and Clark hub project manager in the Philippines, said airfare is but one of the costs of sending goods to the Philippines.

“The logistics cost is composed of several factors. It’s not just one. This air hub that we are expanding in Clark is responsible for carrying goods from one airport to another around the world. That’s just one component of logistics cost,” he said.

“You have the delivery cost, the pickup cost, customs clearance cost. Toll fees in the Philippines. So many, many things that I think will have to be studied if there were an effort to bring down logistics costs,” he said.

Sapaen noted, however, that the global logistics giant has systems in place to help customers avoid unnecessary shipping costs.

“We are able to support them…avoid errors in their documentation. For example, we provide expert consultancy with our customers to enable them to shift more seamlessly when there are several terms related to related to international transportation,” he explained.

Daryl Tay, head of Asia Pacific operations and strategy at UPS, also said they are investing in technology to bring down shipping costs.

“We look at where we know: expansions, the economic environment…the infrastructure. Those are critical areas, and also labor. At the same time, deployment of technology is also critical. We look at areas that we can do that in order to manage our costs,” he said.

Sapaen also said that UPS’ own fleet of aircraft will help the company manage costs amid elevated fuel prices.

“I would say one of our key strengths is that we operate our own fleet of aircraft. We operate our own delivery fleet. We also source from partners, of course. But this ability to control our aircraft, our routing, gives us an edge when it comes to planning our routes to make it as efficient as possible,” he said.

“In many other places, we do have sensing technology. We have driver route technology, which will enable them to reach and complete their deliveries by traveling the least amount of mileage,” he explained.

“If a UPS customer uses our resources, then they will be able to take advantage of those technologies which are already in place,” he said.

Sapaen and Tay spoke at the sidelines of the opening of UPS’ expanded hub at the Clark International Airport in Pampanga.

The logistics hub, which spans 30,000 square meters, can process at most 15,000 packages per hour. This allows the global logistics giant to boost services across 1,100 trade lanes worldwide.