The State of Warehousing in the Philippines
July 5, 2019
What should you know about warehousing in the Philippines?
- What is warehousing?
- The Philippine Market
- Overall warehousing situation
Logistics and warehousing are two of the most important industries in the Philippines. Warehousing, in particular, experienced huge growth thanks to a high increase in trade activities in and around the country.
The Philippines is in an incredibly strategic location. The archipelago is right on the edge of the Pacific Ocean, making it the most convenient docking location for supply routes. The Philippines essentially connects many export and import markets of different countries across the world.
The booming industrial sector of the country is expected to drive demand for more logistics services. This means that these logistical factors have nowhere to go but up.
The Philippine market for warehousing has been in a great place in recent years. Thanks to the Philippine government’s Build Build Build infrastructure program, numerous projects started construction in 2018 and has demanded more services from many logistics and warehousing companies.
What is warehousing?
Warehousing is an important part of the supply chain. Though not as complex and process-improving as the other parts of the logistical process, it’s still something that should never be forgotten.
Basically, warehousing is the act of storing merchandise in a facility before they’re sold. These products are then safely and securely stored in an organized fashion in large structures known as warehouses. The items are sorted and assigned tracking numbers so that the warehouse employees know where to find them. These tracking numbers show the time the item arrived at the warehouse, how long it’s been there, and the quantity of that item on hand.
In most cases, warehousing is frequently attributed to e-commerce and SMBs. Most of the time, products are stored until an order is placed online. The order is then shipped directly from the facility to the consumer. For other businesses, their inventory is usually temporarily stored in a warehouse before it’s shipped to a physical store.
The importance of warehousing is further emphasized by the fact that it is essential in every logistics system. With warehouses, you don’t have to worry about where you should place excess merchandise. It also enables you to improve your inventory management procedures. The space that it provides also allows you to focus more on customer-centric concepts such as store ambiance and customer service.
The Philippine Market
When it comes to warehousing, the Philippines is known as one of the most strategic locations in the Indo-Pacific Ocean. As mentioned above, it opens routes that connect multiple countries. This makes the Philippines a major player when it comes to logistics services. Aside from that, many companies fight for spots in this area as it also increases their reach.
The biggest contributors to the warehousing sector in the Philippines are the industrial and retail sector. Other notable contributors include container freight, cold storage, and agriculture based on revenues in 2017.
Nowadays, it’s very important to take note of the e-commerce industry. The increasing prominence of online shopping makes it an interesting factor to warehousing in the Philippines.
In recent years, certain companies that operate in the retail sector, Fast-Moving Consumer Goods (FMCG) sector, pharmaceutical sector, apparel, and other accessories are forecast to experience strong growth. The most prominent of them is the e-commerce industry. It’s expected that these companies will require more warehousing facilities to store the products which will trigger increased demand for warehousing space in the future.
The Overall Situation
The Philippines is experiencing an increase in manufacturing activities. This rising domestic consumption and international trade activities are primary factors that contribute to the growth of warehousing in the Philippines.
This has led to warehousing companies competing against each other more rigorously. They contest through the size and location of their warehouse. In particular, the location is very important as it needs to be in an appropriate area for the customer’s needs which reduces costs of the warehouse.
In recent years, the Philippines has witnessed an increase in trade flow which has positively affected the demand for transportation and storage facilities. There has also been a yearly increase in cumulative cargo throughput in the country that has led to a positive influence on the overall Philippine warehousing industry.
The warehousing industry in the Philippines is relatively unknown to many. Most of the time, only logistics and e-commerce companies know of their presence. However, that doesn’t mean that warehousing is not important. In fact, the logistics and warehousing industry is a big contributor to the Philippine economy.
That being said, warehousing is paramount in the Philippines. The country is a major strategic location for all kinds of logistical services. And that means it’s also an opportunity for the country’s growth.
The state of warehousing and logistics in the Philippines is not something that one should ignore. On the contrary, it’s one of the sectors that everyone should keep an eye on.