More flights, more air cargo

• Source: http://www.sunstar.com.ph/cebu/business/2016/08/24/more-flights-more-air-cargo-493275
• Thursday, August 25, 2016

By Katlene O. Cacho

THE Aircargo Fowarders of the Philippines Inc. (AFPI)-Cebu Chapter sees growth in air freight businesses with the addition of international direct flights servicing Cebu.

Marivic Esmero, president of AFPI-Cebu Chapter, said having international flights to Cebu helps air logistics become more seamless and efficient.

“It would be tasking if we use all flights out of Manila,” said Esmero, adding that a stopover in Manila translates to higher handling fees and other charges.

“The direction of the organization this year is to align (our programs) with that of the different local government units and government offices and be active in the logistics mapping,” said Esmero during the organization’s recent general membership meeting.

She noted that infrastructure remains the key challenge faced by local air cargo players. Inter-island transport in the country remains expensive due to the country’s archipelagic nature.

Esmero pointed out that it is more expensive to ship from Cebu to Manila than from Cebu to Hong Kong.

“The integration between international and domestic movements is a challenge and, as a result, created a somewhat silo approach and eliminated opportunities for reducing cost through end to end optimization,” said Alberto Lina, former chief of the Bureau of Customs, in his keynote message.

Lina added that the absence of defined regulations and clear cut policy on domestic multi-model transportation hinders the growth in this sector and the opportunity to drive down cost across the island.

“I encourage you to study how your respective workforce integrates the international and domestic (movements) and look how collectively you can improve on it and drive down the cost of moving goods, for example, to and from Visayas region to the rest of the world,” said Lina.

While efforts are in place to improve infrastructure, the former Customs official advised Cebu not to copy Manila.

“Don’t think about truck ban and number coding. Think about long-term solutions like mass transport system, truck dispatch system, cargo hubs and distribution centers, cargo and delivery consolidations,” Lina said.

The country’s first National Logistics Master Plan (NLMP) is scheduled for public presentation next month and is slated for implementation in the fourth quarter of this year, according to the Department of Tourism and Industry (DTI).

A roadshow of the NLMP for Central Visayas is slated for October in Cebu.

The logistics master plan is being crafted by the DTI in partnership with the United States Agency for International Development Advancing Philippine Competitiveness (USAId-Compete). It is seen to address issues and concerns that affect the competitiveness of the Philippine logistics industry, including the lack of infrastructure and difficulties arising from regulatory bottlenecks.

Another challenge faced by the air cargo players is the declining cargo volume due to the softening of the global demand.

AFPI-Cebu Chapter director David Tieng said they are seeing flat growth this year as global demand continues to weaken, particularly in traditional markets like United States, China and Japan.

Asia-Pacific airlines reported a 3.5 increase in demand for air cargo in June compared to last year, according to the latest data from the International Air Transport Association (IATA).

The IATA report noted that “the Asia-Pacific airfreight market has been improving in recent months, most notably the large ‘within Asia’ market. Nonetheless freight volumes from ‘emerging Asia’ continue to face headwinds from weak trade in the region and globally.”

“On top of attracting international airlines to come Cebu, there is also a need to develop our trade. Bigger demand both in passage and cargo would mean more business activities,” said Tieng.

Exporters are the main clients of air cargo forwarders.

Exports in the first half of this year declined by 7.5 percent from $29.002 billion in 2015 to $26.832 billion in the same period of 2016.