The Philippines freight and logistics market is estimated to be valued at USD 15.6 Million in 2021, and it is expected to reach USD 23.7 Million by 2027, witnessing a CAGR of 7.23% during the forecast period (2022-2027).
The pandemic augmented the e-commerce activities in the country as wary consumers are staying home to avoid exposing themselves to disease vectors. This trend will continue with the rise in new online shoppers and the proliferation of online sellers in the country.
According to the Department of Trade and Industry (DTI) in the Philippines, the number of online sellers increased from 1,700 in March 2020 to 93,318 in January 2021. Under the "Build, Build, Build" program, the government is advancing several infrastructure projects, including three bus rapid transit systems, four seaports, six airports, nine railways, and 32 roads and bridges. The country's transportation system is multimodal, including inter-island and intra-island mobility, and often combines air, sea, and road means of transportation.
Key Market Trends
Growth in E- Commerce To Drive the Market
In the Philippines, the COVID-19 outbreak has raised the demand for eCommerce. eCommerce growth is fueled by a growing middle class, increasing consumer spending, and a young, tech-savvy population. However, the country faces difficulties due to the lack of suitable network infrastructure. The Philippine government is pressuring private telecommunications firms to increase bandwidth capacity for the retail sector.
The e-commerce market in the Philippines has been expanding in recent years. The pandemic has boosted e-commerce in the country, as fearful consumers stay at home to avoid being exposed to disease vectors. With the increase in new online buyers and the proliferation of online retailers in the country, this tendency will continue. The number of online vendors in the Philippines climbed from 1,700 in March 2020 to 93,318 in January 2021, according to the Department of Trade and Industry (DTI).
In August 2021, Lazada Group announced the official rebranding of its logistics arm. The new Lazada Logistics division brings together what was previously known as Lazada eLogistics, which managed third-party providers, and Lazada Express, the company’s own parcel-delivery service, and introduces multichannel logistics services that allow for the fulfillment and delivery of orders across all eCommerce platforms. LEL oversaw fulfillment and logistics with third-party logistics (3PL) providers, while LEX oversaw consumer delivery. Lazada Logistics' new blue represents efficiency and dependability, as the company provides Southeast Asian brands and sellers with a trusted, one-stop logistics solution for all their business needs. In addition to the rebranding, Lazada Logistics is launching multichannel logistics (MCL) services, which give a single stock fulfillment solution to help eCommerce facilitators and brands fulfill across all eCommerce channels in a seamless manner.
Increasing Spending On Infrastructure To Boost the Opportunities
With the country’s ever-growing population and the rise of domestic consumption, the Philippine economy continues to expand. Moreover, with the rise of the economy also comes the rise of the logistics and transport industry. As the production and distribution of goods increase, so does the need to move these items. However, the geographic layout of the Philippines is a complex one, with thousands of islands connected through hundreds of links to form one big archipelago. The trucking sector plays a crucial role in bridging this gap.
Government programs, such as the Philippines Cold Chain Project (PCCP), which is funded by the United States, are also helping to improve the Southeast nation's cold chain logistics infrastructure. The PCCP is a four-year project funded by the US Department of Agriculture (USDA). It is attempting to organize producer groups to increase agricultural productivity and meet international food safety standards by providing improved technologies, expanding cold chain-related markets, and strengthening intermediate organizations.
In September 2021, The Export Development Council (EDC) and University of the Philippines Public Administration Foundation partnered with Royal Cargo and Iris Logistics to launch the first nonstop Philippine shipping service between the Philippines and the United States in decades, thanks to USAID's Regulatory Reform Support Program for National Development (RESPOND) project.
The Philippines’ railway network is undergoing a rebirth after decades of neglect and underspending that has left it in a decrepit state.Among the government’s top priorities is the flagship North-South Commuter Railway in Manila, its largest-ever individual infrastructure investment. NSCR is envisaged as a 163 route-km suburban railway network connecting the regional growth centers of Clark and New Clark City in the north with central Manila and Calamba City in Laguna province to the south of the capital.
The competition in the Philippines freight and logistics market is fragmented with the presence of many local and international logistics service providers. Some of the existing major players in the market include – FedEx, UPS, DHL, Kuehne + Nagel, PHL Post, Nippon Express, 2GO Express, etc.
The international players are making strategic investments to establish a regional logistics network, such as the opening of new distribution centers, smart warehouses, etc. The growth of e-commerce is an important factor spurring the development of courier services. Increasing consumption and growing internet penetration are boosting e-commerce activity in the Philippines
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1.2 Scope of the Study
2.2 Research Phases
4.2 Government Regulations and Initiatives
4.3 Technological Trends
4.4 Insights on the E-commerce Industry
4.5 Insights on Logistics Infrastructure Development in Philippines
4.6 Brief on Courier, Express, and Parcel (CEP) market in Philippines (Market Size and Forecast)
4.7 Insights on 3PL market in Philippines
4.8 Market Dynamics
4.9 Industry Attractiveness - Porter's Five Forces Analysis
4.9.1 Bargaining Power of Suppliers
4.9.2 Bargaining Power of Consumers
4.9.3 Threat of New Entrants
4.9.4 Threat of Substitutes
4.9.5 Intensity of Competitive Rivalry
4.10 Industry Value Chain/Supply Chain Analysis
5.1.1 Freight Transport
18.104.22.168 Sea & Inland Water
5.1.2 Freight Forwarding
5.1.4 Value-added Services and Others
5.2 By End User
5.2.1 Manufacturing and Automotive
5.2.2 Oil and Gas, Mining, and Quarrying
5.2.3 Agriculture, Fishing, and Forestry
5.2.5 Distributive Trade (Wholesale and Retail Segments)
5.2.6 Other End Users (Telecommunications, Healthcare and Pharmaceutical, etc.)
6.2 Company Profiles
6.2.1 Deutsche Post DHL Group
6.2.2 FedEx Corporation
6.2.3 United Parcel Service (UPS)
6.2.4 Nippon Yusen NYK (Yusen Logistics)
6.2.5 PHL Post
6.2.6 Nippon Express
6.2.7 LBC Express
6.2.8 2GO Express
6.2.9 JRS Express
6.2.10 DB Schenker
6.2.11 Kuehne + Nagel International AG
6.2.12 CJ Logistics*
6.3 Other Companies
8.2 Insights on Capital Flows
8.3 External Trade Statistics
8.4 Economic Statistics - Transport and Storage Sector Contribution to Economy
A selection of companies mentioned in this report includes:
- Deutsche Post DHL Group
- FedEx Corporation
- United Parcel Service (UPS)
- Nippon Yusen NYK (Yusen Logistics)
- PHL Post
- Nippon Express
- LBC Express
- 2GO Express
- JRS Express
- DB Schenker
- Kuehne + Nagel International AG
- CJ Logistics*