Transforming logistics

Local press is abuzz with the Manny Pangilinan-led Metro Pacific Investments Corporation’s planned investment in Air21 to cement its serious play in the highly fragmented but lucrative logistics industry.

It made its foray in 2016 through MetroPac Movers Inc’s P2.2 billion investment in Basic Logistics Inc., a local mid-sized firm.

Of late, Ayala Corporation through Ayala Land, Inc. is strengthening its position in the real estate logistics through Prime Orion Philippines’ investments in real estate warehouse operations in 14-hectare Lepanto property in Calamba, Laguna, and planned transformation of Tutuban into an integrated mixed-use development with retail, logistics, offices and other support services.

Last year, SM Investments Corporation acquired a substantial stake in the Philippines’ largest logistics provider 2GO Group Incorporated to address the emergence of e-commerce, which is a brewing threat to the mall’s foot traffic and a real opportunity to diversify channel at the same time.

Early this year, 2GO Group has invested in the online delivery service Mober Technology PTE to service SM’s various businesses, such as SM Appliance, Our Home, SM Department Stores, and other SM affiliates, by providing them with same-day delivery capabilities.

In July this year, Gokongwei-led Cebu Pacific Air announced the conversion of two of its planes to venture into cargo transport. And last year, JG Summit Holdings invested in Singapore-based Sea Ltd., a regional e-commerce internet platform company to potentially deepen its presence in the Philippines.

All these point to the burgeoning ecommerce in the Philippines and in the region, and its attendant enabler, the
deregulated and lucrative logistics industry, which is becoming the next competitive arena for local conglomerates.

But to reap the benefits of an efficient supply chain, all of these should come together into an integrated system to ensure seamless customer experience. Technology is an obvious enabler where advances in big data, artificial intelligence (AI), and blockchain technology promise immense opportunities for logistics players to become more responsive and efficient.

One area is how the use of data can transform the logistics industry. According to a recent report commissioned by DHL Trend Research, “One of the most underutilized assets in the industry is the high volume of data that supply chains generate on a daily basis. This data is both structured and unstructured, and AI will enable logistics companies to exploit it.”

One use case is how AI can significantly advance the performance of logistics operations. According to the report, “DHL has developed a machine learning-based tool to predict air freight transit time delays in order to enable proactive mitigation. By analysing 58 different parameters of internal data, the machine learning model can predict if the average daily transit time for a given lane is expected to rise or fall up to a week in advance.”

In the area of route optimization, it’s critical for logistics operators to efficiently transport, pick up, and deliver shipments amid changing customer demands. “Deutsche Post DHL Group pioneered the SmartTruck routing initiative in the early 2000s to develop proprietary real-time routing algorithms for its fleet operators and drivers.

Recently new soft infrastructure of cities such as digital and satellite maps, traffic patterns, and social media check-in locations are creating a wealth of information that can augment systems like SmartTruck and improve the overall routing of truck drivers on delivery runs”.

In the food industry supply chain, Forbes cites how “Walmart uses blockchain to keep track of its pork it sources from China and the blockchain records where each piece of meat came from, processed, stored and its sell-by-date. Unilever, Nestle, Tyson and Dole also use blockchain for similar purposes.”

Here at home, logistics and remittance LBC Express, Inc. partnered with Chennai-based Ramco Systems “to unify and automate its logistics and supply chain operations across its 1,300 global branches and 121 warehouses.”

According to Ramco website, “mobile-friendly platform includes modules for freight-forwarding, courier planning, rating and billing, as well as end-to-end warehouse, fleet and supply chain management. It comes equipped with chatbots and advanced analytics capabilities to improve company-wide visibility and hub management”.

Technological advances in logistics are truly on its way to digitally transform the industry. The opportunities are massive for the industry players who will take advantage of this shift.

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Hungry Workhorse and Ramco Systems are excited to invite logistics executives and professionals for a breakfast forum on “Digital Transformation in the Era of Uberization of Logistics” happening on Aug. 14th at the Marriott, Manila, with a powerful roster of speakers and panellists from the industry. To register, email The author is President & CEO of Hungry Workhorse Consultancy Inc, a digital and culture transformation firm, and Co-Founder of Caucus Inc, a data privacy advisory firm. He teaches strategic management in the MBA Program of De La Salle University. He can be reached at