By Benjamin Cuaresma
The Philippines must address a range of cost drivers—from customs clearance and delivery charges to infrastructure and fuel expenses—to make its logistics sector more competitive, executives of global shipping giant UPS said.
Albert Sapaen Jr., UPS Philippines head of air operations and project manager for its Clark hub, said air transport is only one component of the total cost of moving goods across borders.
Other expenses include pickup and delivery services, customs clearance and domestic toll fees, requiring a broader assessment of the supply chain to identify opportunities for cost reduction.
“The logistics cost is composed of several factors. It’s not just one,” Sapaen said, noting that the company’s expanded Clark facility handles goods moving between airports worldwide but represents only one part of the overall logistics process.
He said UPS helps customers avoid unnecessary shipping expenses by providing technical guidance on documentation and international transportation requirements, where errors can cause delays and additional costs.
Daryl Tay, UPS head of Asia-Pacific operations and strategy, said infrastructure, economic conditions, labor and technology are among the factors the company considers when managing operating expenses.
He said technology deployment is also critical to improving efficiency and controlling costs.
Sapaen added that UPS’ ownership of its aircraft and delivery fleet gives the company greater control over routing and operational planning, helping it respond to elevated fuel prices and improve transport efficiency.
The company also uses sensing systems and driver-route technology in various markets to help delivery personnel select efficient routes and reduce unnecessary mileage.
Customers using these services can benefit from the company’s existing systems to manage their shipping operations, he said.
The executives made the remarks on the sidelines of the opening of UPS’ expanded hub at Clark International Airport in Pampanga.
The 30,000-square-meter facility can process up to 15,000 packages per hour and supports the company’s operations across 1,100 trade lanes worldwide.
High logistics expenses, alongside elevated electricity costs, have been identified as challenges affecting the Philippines’ ability to compete with other economies.
The UPS executives’ assessment highlights the multiple components of logistics costs and the potential role of infrastructure improvements, streamlined documentation, efficient routing and technology in reducing operating expenses.
ia/xf
