Top 5 Products Exported by The Philippines

Top 5 Products Exported by The Philippines

The Philippines is a country in Southeast Asia that is rich in natural resources. Several of these resources are quite rare in some areas of the world, which gives the Filipinos an opportunity to earn a living by converting it into products that we export today.

If you’re one of those business folks who are either looking for an ideal line of products to sell in an international scale or in the verge of expanding your business internationally, this article is for you. In addition to looking for a suitable freight forwarding company to keep your supply chain up and going, you must also familiarize yourself in five of the top-selling products exported by the Philippines:

  1. Gems, and other precious metals

As recent as last year, the Philippines was able to accumulate an amount of $1.5 billion in exporting precious metals and gems on international markets. According to records, the leading and most expensive precious metal in the country is gold. The amount of gold exported from the Philippines is ten times greater than the amount spent by importers who bring gold into the archipelago.

Additionally, there is also a growing demand in pearls found in various seas of the Philippines. Those that were produced by the largest immobile bivalve mollusk in the world, Tridacna Gigas can weigh over 34kg and can be a couple of feet long. Filipino pearl exporters earned an amount of $15.3 million by selling pearls globally. As for gems, organic gemstones are also on the rise, with exporters making a million dollars per year.

  1. Fruits, nuts

Examples of fruits and nuts that are widely exported in the Philippines are coconut, banana, pineapple, soursop (guyabano), papaya, guava, calamansi, tamarind, peanuts, among others. Filipino cultivators of these fruits earn a total amount of $2.1 billion, which comprises 3.3% of overall exports from the country. The Philippines is the second-largest coconut user on the world, next only to Indonesia.

  1. Optical, technical, and medical apparatus

Aside from natural resources like fruits nuts, gems, and other precious metals, the Philippines is also a competitive exporter of tools and equipment used in the medical field. Filipino manufacturers of these products gained a whopping $2.2 billion from international buyers around the globe.  Examples of this equipment are:

  • Optical Fibres, Optical Fibre Bundles, and Cables
  • Photographic Cameras; Photographic Flashlight Apparatus
  • Oscilloscopes, Spectrum Analysers
  • Liquid Crystal Devices, Lasers
  • Other measuring or checking instruments and machines
  1. Machinery, i.e., computers

Machinery and computers that are widely used in some parts of the world actually came from the Philippines. These can range from office machine parts, integrated circuits, semiconductor devices, insulated wires, and even whole computers itself. Companies selling machinery and computers in the Philippines earned $9.6 billion in the year 2018 alone.

  1. Electrical machinery, and other similar equipment

Based on the 2018 records, electrical products are still in leading products exported by the Philippines. Even the government acknowledged this fact as the Department of Trade and Industry (DTI) stated that such products are the key exports of the country. The Philippines exported $32.9 billion worth of electrical machinery and other similar equipment which account for almost half (48.7%) of the country’s total exports for last year.

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The Six Most Critical Issues In The Philippine Trucking Industry

5 Problems that the Philippine Trucking Industry is Facing Today

For the past decades, the Philippines has been undergoing some constant changes specifically in the trucking industry. Many trucking companies responded by allowing themselves to adjust in order to maintain their foothold in the growing competition.

Despite the recent improvements in the Philippine economy nowadays, the trucking industry seems to be on a race of its own, exerting a sense of pressure and urgency for everyone involved especially the drivers. This event leads to the emergence of new problems and issues that continue to bring detrimental effects on the nation’s trucking industry.

Below are six most critical issues that the Philippine trucking industry is dealing with today:

  1. Excise tax on Fuel

Together with the implementation of TRAIN Law in 2018, the Philippine government also added excise tax on fuel. Diesel users such as trucks will receive a 3-tranche increase which will occur in the following order: Php 2.50 per liter in 2018, Php 4.50 per liter in 2019, and Php 6.00 per liter in 2020. Taxes on fuel has the same effects as the oil price hike as it adds further encumbrance on the part of the truckers.

  1. Age Restriction on Trucks

In the latter days of November 2018, the Department of Transportation (DOTr) suspended the implementation that restricts the age limits of trucks to 15 years. Any trucks that are more than that age threshold will be phased out. Though this move by the government is highly beneficial for the industry, future truck phase-outs in other areas of the country are still in danger of this regulation.

  1. Traffic Congestion

While some people might say that heavy traffic means that the economy is currently adjusting as it grows, we can also see it as a double-edged sword. Traffic congestion has a large number of negative effects on the environment, health, and economy of a country in a variety of ways. It could hinder the productivity of truckers as they are forced to waste a significant amount of time. What’s even worse is that it could persuade the government to impose traffic policies such as a city-wide truck ban.

  1. Oil Price Hike

Oil price hike takes place when the cost of oil starts to increase by a certain percentage. There are a lot of factors that influence the oil prices in the Philippines, such as the currency exchange rate, the supply and demand, and the price of oil in the world market. Unfortunately, most trucking companies prefer not passing the cost to their clients, sustaining a great deal of financial loss in the process.

  1. Truck Ban

Several places in the Philippines particularly Metro Manila has already experienced truck bans because of severe traffic congestion. Because of the size of the trucks, the traffic management agencies often put their blame to such vehicles as the real culprit of congestion. Even some motorists have claimed that trucks are the actual initiators of the problem as they are normally perceived as slow-moving the usual cause of car accidents. The repercussions of this policy could endanger the whole trucking industry, as the banning of trucks can affect not only the providers of these services but also the overall Philippine economy itself.

  1. Implementation of Maximum Gross Vehicle Weight (MAGVW)

According to the Confederation of Truckers Association of the Philippines, the biggest challenge that they need to overcome this year is the implementation of maximum gross vehicle weight for the trucks. Though this regulation’s main purpose is to avoid overloading by limiting the weight of the trucks, the maximum weight allowed for truck codes 12-2 and 12-3 (41,500 and 42,000 kg respectively) could be a major problem indeed. This is because the average weight of containers that the trucks usually carry is around 30-36,000 kg, and if the average weight of the tractor head and trailer would be added (15,000 kg), the vehicle will reach a total weight of about 45,000 kg which is already a violation to the law.

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Shipping Terms Every International Importer and Exporter Should Know

Shipping Terms Every International Importer and Exporter Should Know

If you’ve been managing a business for quite some time now, you might’ve experienced some difficulties when it comes shipping your goods from one place to another. Aside from ensuring the safety and timely arrival of your cargo, you also need to familiarize yourself to several jargons associated with the shipping industry. Most business owners nowadays ended up getting confused about some of the technical terms used in shipping. While you don’t really have to be a pure expert when it comes in dealing with these terms, your knowledge about them could prove to be pretty handy in the future indeed.

So, to help you avoid unnecessary misunderstandings and minimize errors while you communicate with your shipping company, here are some of the most common terminology used in international shipping:

Bill of Lading (BoL)

Bill of Lading, also known as BoL is a document given by a carrier to a shipper. This document is issued on a receipt form with the sign of the vessel’s representative and acts as a written proof of contract that a transportation has been made. 

This document is very important as many ports do not allow anyone to claim their goods without presenting their BoL. Unfortunately, some notorious freight forwarding scammers use BoL as a way to steal money from the others. Know more about the other freight forwarding scams through this infographic here.

Carrier

Carriers can be an individual or legal entity that offers transporting services for passengers and goods. Examples of carriers are airlines, shipping lines, railroad and trucking companies.

Backhaul

If a driver takes a cargo during the return trip of a commercial vehicle, it’s technically referred to as a backhaul. Cargo vehicles do this practice as a way to maximize the productivity of their trips.

Customs Broker

Customs Brokers are private individual or firms that works as a guide for both importers and exporters in meeting the necessary requirements given by the customs authorities. Many people usually mistook customs brokers to freight forwarders, but both professions have several distinctions with each other.

Freight Forwarder

These are persons or company that specializes in logistics and organizing shipping processes in place of an individual or company to transport their goods.

Hazmat

A shortened term for “hazardous materials,” hazmat is a material that could pose safety risks to anyone that it comes in contact with. Unlike other forms of cargo, shipping hazmat requires special endorsements from all involved parties.

Intermodal

Cargo can be considered as an intermodal once it was shipped using multiple forms of transportation, like a cargo truck and rail transport.

Less Than Truckload (LTL)

When the weight of a shipment ended up being less than the required weight of the truckload rate, that is described as Less Than Truckload or LTL.

Tender

Tender is a fixed cost to move a cargo.

Transportation Management System (TMS)

Transportation Management Systems or TMS is a software designed to help businesses and even some freight forwarding companies to optimize their planning and execution in the physical movement of the goods. There are several benefits that can be obtained by investing in this kind of system.

 

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Reasons Why You Should Invest in a Transportation Management System (TMS)

Reasons Why You Should Invest in a Transportation Management System (TMS)

As a business owner, it is your duty to maintain the stability of your supply chain in order to ensure that your company is steadily growing on its way to success. Most distribution companies today implement a so-called Transportation Management System or TMS to accomplish such a goal.

What is a Transportation Management System?

Transportation Management System is defined as a subset of supply chain management that involves efficient planning, execution, and optimization of the physical movement of goods. This logistics platform can basically give you information that allows you to lower your expenses on shipping, saving you a lot of time and money in the long run. But the benefits don’t end there, though.

Here are five other reasons why you should invest in a Transport Management System or TMS:

  • It improves your cash flow

Your cash flow is an important factor that keeps your business up and running. Without it, you will find yourself unable to buy inventory or even pay your employees. In fact, studies have shown that 82% of businesses today fail due to poor cash flow management. Fortunately enough, a transportation management system can help you improve your cash flow. Through centralized billing support and freight bill audit and payment features, you can save more money and keep it flowing in your business without experiencing too much difficulty. You can also standardize your payment terms for your shipments so you can easily budget and manage your cash flow since you have a more accurate picture of all those payables, receivables, and freight invoices.

  • Better warehouse management

Maximizing your warehouse duties is very important. With a transportation management system, you don’t have to spend a lot of time on managing freight tasks as you already have a thorough and optimized plan to do that. This way, you can focus more on other important aspects of the business because you have a greater overall supply chain visibility that helps you to make better decisions when dealing with any financial issues.

  • It improves customer service

Investing in a transportation management system enables you to have access to analytics and reports that show how your decisions affect customer service. These reports can make you aware of what carriers you use to ship your goods, how much their service costs, and if whether they often deliver on time or not. This way, you can improve your customer service by determining the best carrier for your business. TMS can also make you inform your customers about the current state of their order, giving them adequate tracking information and experience.

  • Better inventory management

TMS can also provide you some updates about the condition of orders and shipments in real time. By monitoring each step of the process, you can be aware of how much inventory you left and therefore, identify your future needs.

  • It can reduce invoice errors

Errors in invoices, particularly on freight payment and audit processes, can be quite common on manual procedures. TMS can negate these errors by using computerized or automated procedures.

 

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5 Important Tips for New Importers

5 Important Tips for New Importers

Importing basically refers to the act of buying goods and services from abroad in order for it to be sold for the customers of the home country. Many business owners nowadays prefer to sell imported products due to its ability to increase profit margins. Moreover, an importer can provide higher quality goods that can potentially surpass those produced by local competitors. If done in moderation, importing can help bolster the national economy as well as widen up the global market.

Despite the benefits of this practice, importing can be a pretty risky option especially for those who are still establishing their foothold in the world of commerce. Purchasing goods from a foreign land requires a specific set of knowledge and skills and a deeper understanding of complex processes of importation.

If you’re starting to think that importing is the next big step for your business, here are some of the most important tips you should be aware of before making any move:

  • Make sure you are legible to do the importing

Speaking about legibility, it means that you have to be legally allowed to bring those imported goods to your home country. Before you can spend any time, money, and effort into something such as importing, you’ll need thorough research about the laws especially the restrictions of items that you are going to import. Some chemicals and medicines, in particular, are examples of products that could have certain restrictions. Check the legality of the products that you wanted to import first.

  • Assess all the possible expenses

Planning your budget ahead of time is very important if you wanted to be a successful importer. Be mindful of all the possible expenses before you can place an order to a company abroad. These charges can range from the transport and insurance costs, as well as other legal documents that you need to go through. A good way to limit or minimize these expenses is by hiring freight forwarders and customs brokers since they have the expertise to guide you through the process and find all the best deals for shipping available.

  • Pay attention to sudden exchange rate fluctuations

One notable example of risks that every importer should know is sudden fluctuations in the exchange rate. Remember that you are buying goods from another country with prices that are not the same as your local currency. So be mindful of the current exchange rate as it greatly affects the final amount that you will need to pay. The rate could either become beneficial or detrimental to your success.

  • Learn to interact with your foreign suppliers

It’s not easy to deal with suppliers from another country. Language and culture barriers are some of the challenges an importer has to face. Miscommunication could become pretty common in these areas, so better study a lot about the business industry of their country as much as possible.

  • Determine if there is a local market for the goods you wanted to import

It is your responsibility as the importer to know if there is a growing demand for the goods that you are opting to resale. Determining your potential customers in the local market can help you identify the profitability of that imported product. Conducting some surveys is also a good way for you to come up with a decision on whether importation is definitely the right choice or not.

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The Impact of Natural Disasters on Freight Shipping

The Impact of Natural Disasters on Freight Shipping

In terms of economy, any country will always rely on the continuous transportation of goods and materials that keeps the relationship between suppliers and manufacturers in harmony. This process is very critical for maintaining economic growth because any moment of disruption could bring serious adverse effects. Some of these disruptions are caused by certain deregulations in the financial industry that are to some extent, quite avoidable. However, another thing that can affect a country’s economy is freight shipping, which can sometimes depend on several factors that unfortunately are beyond our control: natural disasters.

Speaking about natural disasters in the Philippines, the likes of floods, typhoons, and earthquakes, are quite common. These calamities typically leave most of the routes that are essential for freight shipping operations unsafe such as roads and seas. This reason is also why you should also be aware of the following ways of how nature can make a significant impact on freight shipping:

The Price of Fuel

One of the most critical prices to look out for when there’s a natural calamity going on is the price of fuel in the world market. Since the cost of most goods and other services are very much dependent on the value of fuel as the source of transportation, your chosen carrier can charge you more than usual. The worst-case scenario in this situation is when there’s a typhoon going on oil refineries strong enough to make it temporarily shut down due to damages.

The Expected Arrival of your Goods

Time is more than just gold in the world of business. Importing your goods in a faraway place requires a definite amount of time to keep up against competitors that are nearer than your target customer. Moreover, if you sell something that thrives on punctuality to retain its usefulness such as food, you should know by now that delayed delivery can ruin its condition. So, if you just shipped your goods during a storm, you better expect for the worse. Carriers tend to choose longer routes over the shorter ones if they find the latter impassable due to the dangers involved.

Refusal of Carriers to take your Cargo

Natural disasters will always make most carriers to be more vigilant to take anyone’s goods. Denial of your goods directly gives detrimental effects on your supply chain, eventually losing considerable revenues in the long run. Just imagine all of your business operations being halted in such a significant amount of time.

Freight Shipping Rates

Rates for freight shipping is always flexible especially on the event of calamities. A domino-effect will most likely happen until it makes its way for you. From the impassable roads making the fuel much more expensive to the delayed accomplishment of shipping service, most financial burdens will be passed into you.

Conclusion

As a business owner looking to ship your goods, anticipating natural disasters is a key for preventing any financial loses that can delay your company’s growth. Always take heed of the weather updates and recent news before making any move.

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Current State of Port Congestion in the Philippines

Current State of Port Congestion in the Philippines

Basically speaking, port congestion refers to the situation wherein a growing number of vessels are starting to queue up outside the port in order to wait for any available space where they can load or offload their cargo. And speaking of the Philippines, maritime-related problems such as port congestion can be quite inevitable, considering the fact that vast oceans and seas geographically surround the country.

Before the advent of their colonizers, the settlers of the Philippines once created wide trading networks within every island that stretches as far as to other neighboring countries like China, Japan, Cambodia, India, Borneo, and the Moluccas.

During the Spanish rule, the trading relations with the said countries continued to flourish, only this time the Philippine capital of Manila has been turned into the center of commerce in the east closing its ports to any countries except Mexico, establishing the what was known as the Manila-Acapulco Trade or the Galleon Trade.

But enough with the history, for this article, will be discussing all about what’s the current situation of the ports here in the Philippines. Intense congestions concerning our harbors can bring detrimental effects for the overall economy of the country in the long run. This is because time is extremely precious for importers, exporters, freight forwarders and other logistics services provider. And with the long delays brought by the port congestion, their operations will surely be disrupted indeed.

How’s the port congestion in the Philippines nowadays?

Based on the most recent news published on various trusted news sites, it seems like there’s some occasional fiasco going on with the government and the Local Truckers Association of the Philippines. This implies that the problem does not lie on the number of the vessels, but on the long queue of trucks waiting inside the terminals. According to PortCalls Asia, the government denied the allegations of any cases of port congestions, for this issue’s roots, can be traced back to a separate problem about by “the high number of empty containers clogging the  terminals and this gave the impression of port congestion by the policy of port operators to limit the entry of empty container vans.”

Lest according to the government, the flow of operations within the Philippine ports especially Manila is still within the threshold of being manageable under international standards. As recent as the previous years, they stated that the average dwell time of the ports are seven days, and the utilization level of yards goes in for over 85%. Meanwhile, the quay crane production rate still holds on to 24.84 moves per hour even bearing the international standard of 25.

How this “empty containers” type of port congestion affects the economy?

While there it can be implied that there is nothing to worry about, the congestion of the empty containers in some ports in the Philippines can pose problems like late deliveries of several kinds of goods. It seemed clear that limited space for container yards somehow affects the cost of trucking in the country.

The Conclusion

It can be true that port congestion in the Philippines does exist in a way or two.

However, as stated in the book “Easing Port Congestion and Other Transport and Logistics Issues,” the best way to deal with it is to accept the fact that in most cities like Manila, factors such as port traffic, economy, and human population far outgrows the infrastructures that help connect the ports to nearby provinces that host industrial and commercial estates.

As of now, what we can do now is to trust the government’s figures and hope for the best.

 

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Indications of a Reliable and Trustworthy Freight Forwarding Company

Indications of a Reliable and Trustworthy Freight Forwarding Company

A freight forwarding company is a firm that offers the arrangement of shipping goods in place of an individual client or company. Many businesses today prefer hiring the service of freight forwarders in order to sustain their competence in the world market.

While there can be a wide variety of companies to choose from, finding the most reliable and trustworthy freight forwarder can become quite tricky since there are indeed some risks involved concerning the safety and timely arrival of your products from one place to another.

So, without further ado, here are the telltale qualities that can easily help you determine a reliable and trustworthy freight forwarding company:

Possesses good credentials

One of the most easily identifiable signs of a competitive freight forwarding company is a list of credentials. These can be awards, testimonials from former and existing clients, and specific accreditations from the government. Knowing this can almost guarantee that a freight forwarder is capable of providing the best quality of services available.

Strong and wide network of contacts

A strong and wide network of contacts is an essential tool of a reliable freight forwarder, especially when conducting international shipments. The company must utilize their contacts with carriers to move the goods. They should also maintain friendly relations with several custom brokers as well as other forwarding agents in foreign countries. This will help them establish effective communication when they are trying to request for any updates about the status of the package, which can prevent possible delays on the arrival of goods.

A range of quality services

A trustworthy freight forwarding company usually doesn’t only provide one kind of service. Instead, aside from product shipping, they also specialize in an extensive range of services such as trucking, assistance in the requirements of importing and exporting, breakbulk agency, among others. Having a range of services is a testament to a company’s ability in singlehandedly managing a set of complicated but important business requirements.

Excellent knowledge in document processes

Being an expert in the nuts and bolts of running the documentation procedures of shipping is a perk of a trustworthy freight forwarding company. This enables them to do their job efficiently by properly guiding and assisting the clients in the step-by-step process that can prevent them from spending too much money as well as precious time due to utter confusion.

Customer Service

Most experienced clients prefer a freight forwarding company that grants them information regarding their best rates and options. Moreover, having an active website, email, or contact number that regularly interacts with the customers looking for inquiries makes that kind of company a highly sought-after one.

A decent packaging service

Another trait of a trustworthy freight forwarding company is its skill in sustaining the safety of the products through a proper and foolproof packaging service. Packaging serves as the main protection of goods during the shipping time, so it is most vital for the company to have the proper kind of packaging regardless of what kind of goods they’re transporting.

Excelsior Worldwide Freight Logistics conduct free orientation for those who are willing to learn more about importation and exportation. It is our advocacy to share our knowledge & experience for 17 years in the business. Visit our website today at www.excelsior.ph to learn more about our service.

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Freight Forwarding in the Philippines: Tips to Achieve Competitive Cost Saving When Importing From China?

Freight Forwarding in the Philippines How to Achieve Competitive Cost Saving When Importing From China

One of the most critical success factors of an import business is learning how to minimize shipping costs. Whether you’re just new in the international trading industry or have already established a big company, managing shipping cost is an aspect that warrants extreme scrutiny and judgement as it can impact your business’ bottom line really hard.

With that being said, here are some tips that can help you ship from China to the Philippines in a cost-effective way:

1. Choose a Reputable Chinese Supplier

The first step to ensure you get a competitive cost-saving when importing from China is to choose a supplier that is reliable and trustworthy enough to cater to your needs.

If your supplier doesn’t comply with regulations and doesn’t have any certifications, it can lead you to serious legal problems once your cargoes arrive at the port destination, which can ultimately result in delays, additional logistical headaches and shipping costs.

2. Hire a Freight Forwarder in the Philippines

Most freight forwarders in the Philippines are affiliated with numerous international transport organizations and companies worldwide, including local Chinese logistic companies. Hence, you should choose a freight forwarder that can and will use its connections to negotiate for better prices on your behalf.   

Furthermore, your chosen Philippine freight forwarder should also be knowledgeable about the freight peak seasons in China (e.g., Chinese New Year) because during peak seasons, importing can become complicated due to high demand, high prices, and a probability of container shortage. 

3. Choose Incoterms Wisely

 

Incoterms are international commercial terms that serve as the basis of agreement between the supplier and the buyer that trades internationally. There numerous Incoterms to choose from, so selecting the most competitive one can be quite challenging.

In general, Incoterms often used to import from China, such as EXW, FOB, and CIF, are the most ideal as they put you in charge of choosing a freight forwarder, shipping routes and times, and other details that allow you to balance all costs so you can stay competitive. However, keep in mind that your negotiation skills and the type and value of goods could also affect the type of Incoterms you should choose.

If you’re unsure of which Incoterm to choose, do read our post on how to select a competitive and safe Incoterm.

These are the steps to follow in order to achieve significant cost saving when you import goods from China to the Philippines.

Here at Excelsior Worldwide Freight Logistics, we have equipped people who are knowledgeable regarding import procedures and are committed to reducing your expenditures as much as you are. 


We also conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business.  

Contact us today at (063) 525-9775 or email us at wecare@excelsior.ph

Steps to Get An Accurate Freight Rate Quote

Steps to Get An Accurate Freight Rate Quote

There is a famous proverb that says, ‘There is nothing certain, but the uncertain.’ Yes, this statement is true and evident in our daily lives but in doing business and transactions, it’s better to dip your toes first into the water before taking the plunge ̶ you need to know what to expect before closing a deal and that is what a freight rate quote can provide you.

Through these steps, you will be able to have an accurate information on your total shipping expenses and obtain the best freight rate:

Decide where to get a freight quote

Deciding where to get a freight quote can be quite tricky because of the number of options available. To make it easier for you, here are some details on shipping partners that you can choose from:

• Freight Forwarders

If you’re looking for a “one stop shop” that can provide you brokerage, carrier, and international freight forwarding services, then freight forwarders are your best pick.

Be specific with your shipment details

In order for your freight forwarder provide you with an accurate freight quote, you must provide them with the following details:

  • What are you shipping?
  • What is the value of your shipment?
  • What is the size and weight of your shipment?
  • Where is your shipment going?
  • When does it need to arrive?

Prepare an RFQ (Request For Quotation)

Once you’ve prepared all the details above, the next step to provide them to your chosen shipping provider. Depending on the services they provide, you may receive just one quote or several to choose from. After you pick a price and service, review all the details to make sure it’s accurate and in order.

Here at Excelsior Worldwide Freight Logistics, we treat our clients as partners. We also conduct free orientation for those who are willing to learn about importation and exportation. It is our advocacy to share our knowledge and experience for 17 years in the business.

Contact us today (063) 525-9775 or visit our website www.excelsior.ph

Sources:

https://fitsmallbusiness.com/how-to-get-a-freight-quote/
https://learn.org/articles/What_Does_a_Freight_Broker_Do.html

Excelsior Worldwide Logistics Corp.