Port system integration to optimize supply chain

CEBU, Philippines - Apart from managing the country’s domestic shipping costs and making it more competitive, the integration of ports, inland terminals and logistic networks is seen to improve the supply chain performance among cargo handlers and shipping lines.

This is according to the Philippine International Seafreight Forwarders Association, Inc. (PISFA) - Cebu chapter president Miguel Angel Larrauri who called for the cooperation of industry stakeholders such as suppliers, manufacturers, local shipping lines, the truckers, transport groups, port authorities, brokers, and forwarders to fully realize such integration.

He said that since the Philippines is an archipelago wherein distribution of goods can be done by land, air and sea, the integration of ports and inland terminals will come in handy.

In his presentation, he made mention that the supply chain management is a crucial process for many companies as they strive to have the most optimized supply chain because it usually translates to lower costs for them.

He also defined logistics network as the linked set of resources used in moving and storing material at the required location and time.

Aside from ensuring that the different ports in the country have to be accessible to each other, Larrauri said that they should also be able to work out and maintain competitive costs.

He noted that in Asia, Philippines has one of the highest domestic shipping costs which has affected the country’s competitiveness among other countries.

“It can cost only $300-350 to send a 20-footer container to Japan but to send a 20-footer container from Cebu to Manila can cost more than double that cost. How can we be competitive with other countries if we can’t manage our own domestic cost,” he stated.

Primary exports of the country include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits.

Philippines also has partnered with major trading countries such as  the United States, Japan, China, Singapore, South Korea, Netherlands, Hong Kong, Germany, Taiwan, and Thailand.

Larrauri further cited that transport groups and truckers have to improve on their efficiency and costing in order to help improve the supply chain performance.

The forwarders or logistic networks, on the other hand, should find warehouses that are conveniently located and who do not charge too much to distribute the goods to the customers.

“That means they have to negotiate with the transport team in order to provide a reliable service at an affordable cost,” he explained.

He also urged port authorities to be cooperative enough and provide the quality of service expected from them.

He further admitted that such action plans and strategies may entail a substantial amount of investment particularly for infrastructure and equipment that could take millions of pesos among stakeholders but reminded them that the industry shall enjoy the fruit of their toil after everything will be realized.

According to 2012 International Monetary Fund Statistics, the Philippine economy is the 40th largest in the world and is also one of the emerging markets globally.

Although the vibrant and robust economy of the Philippines has been lauded globally, Larrauri said that the country still needs to make every effort to be on top. 

 â€œHowever, its growth has been behind that of many of its Asian neighbors, the so-called Asian Tigers, nor is it a part of the Group of 20 nations. Instead, the Philippines is often grouped in a second tier of emerging markets or of newly industrialized countries,” he said.

Larrauri was one of the speakers during the 2nd Visayas Cargo – Handling Operations Excellence Forum that was held last July 26 at the Cebu Parklane Hotel.

This was organized by the AGF Consulting Group-Philippines in collaboration with the Philippine Chamber of Arrastre and Stevedoring Operators Inc., Philippine Port Authority (PPA) and Cebu Port Authority (CPA). /JOB (FREEMAN)