The year brings both new opportunities and new challenges to the logistics industry. The transportation and logistics industry has evolved rapidly in recent years. Among those changes is a shift in industry demands, new service standards, and instabilities in the smooth flow of operations.
However, despite the challenges, the industrial and logistics real-estate sector is still projected to grow in 2022, as warehouses continue to be in high demand, fueled by a booming e-commerce market.
The Philippines climbed three spots to 18th place, according to Transport Intelligence (Ti) and supply chain service provider and investor Agility.
The publication ranks the world's top 50 emerging markets in key areas for logistics market development, including domestic logistics opportunities, international logistics opportunities, business fundamentals, and digital readiness, which is new for 2022.
If you are a business owner, you will be interested in knowing the logistics industry outlook for 2022. What is there for you to look forward to?
1. The logistics sector will help create jobs
The government's "Build, Build, Build" initiative aims to stimulate the economy. Aside from that, multiple infrastructure projects funded by this program will impact the logistics industry, bridging the gap between weaker links in supply and demand.
According to Gov.ph, the Philippine logistics sector may contribute to creating 7.5 million jobs and achieve 5% employment this year.
2. The Philippines express delivery market will continue to grow
The Philippines' e-commerce industry is a thriving industry in the country. The pandemic has highlighted the importance of efficiency in goods delivery, paving the way for the express delivery market to thrive alongside the e-commerce boom.
Some of the factors that will contribute to this growth include:
Retailers moving their operations online to stay in business.
Shorter delivery time across markets in various regions.
Advanced shipment technologies such as delivery tracking services.
3. Logistics will continue to be a highly competitive industry
With rising demand comes increased competition among freight and logistics companies in the Philippines. Local and international logistics services are expected to coexist to support the country's trade activities.
4. Logistics services will be high in demand
Logistics services will continue to be in demand as pandemic restrictions are relaxed. The logistics and warehousing industry will continue to play an essential role in the "new normal" in a variety of sectors, including:
Automotive
Electronics
Clothing and accessories
Chemicals
Pharmaceuticals
5. Digital readiness of the Philippines’ logistic sector
The Philippines performed best in the category of digital readiness, which assesses an emerging market's potential and progress toward becoming a digitally-led, skills-rich, innovation-oriented, and sustainable economy in the future.
However, the Philippines' digital economy remains underdeveloped and lags behind other emerging markets in value terms based on the report. The Philippines fails to realize its full potential, as the digital infrastructure remains weak and internet speeds are among the slowest and most expensive in the world.
Surprisingly, despite the considerable challenges that follow the country’s infrastructure and logistics industry's growth, this still gives us an overview of a more positive outlook for the year ahead. Technology adoption may be the most critical factor in emerging market growth. However, cost or access to services remains as the main setback to operating more sustainably in the Philippines.
If you need help in meeting the challenges of your business by keeping costs in line with your project goals, JCVA recognizes and commits to finding the perfect synergy between quality and cost to your business expansion. Partner with us today! Email us at info@jcvassociates.ph and visit www.jcvassociates.ph to know more about our consultancy offerings.
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