Technological advancements such as digitalization and digital transformation are long overdue in the Philippine logistics sector, according to a new whitepaper from consulting firm YCP Solidiance and the Supply Chain Management Association of the Philippines.

The white paper titled “Digitalization in the Philippine Logistics Industry” said that as logistics enables companies to move around to obtain what they need or deliver items, the industry should grow along with the other sectors that continue to adopt technology, such as construction, manufacturing, trade, agriculture, among others.

“Also making it necessary for the logistics industry to digitalize is the need of businesses for greater order transparency and shorter lead times, especially as e-commerce grows and customer expectations change,” the paper added.

Martin Cu, Philippine country manager of courier services company Ninja Van, said transparency is now an imperative customer expectation, with businesses and individuals alike wanting full visibility of the status of their orders.

The paper noted, however, that making the order status transparent is difficult because the industry is still highly analog and manual in its processes.

Another push factor to digitalize is the important role the sector plays in the clearance of imported goods.

The paper noted that in the Philippines, the logistics industry “has generally not departed far from how traditional logistics has operated.” In contrast, neighboring countries such as Singapore, Thailand and Indonesia have been gearing up to use a global trading platform powered by blockchain technology.

The paper said the Philippines’ logistics industry is generally not digitalized, although warehouse management is relatively more digitalized compared to other logistics processes such as fleet management.

And as emphasized by Cu, also less digitalized are customer-related processes such as customer service and order management, which leads to inefficiencies in dealing with customer demands, considering that manufacturers and retailers are becoming more digitalized.

“Manual processes continue to inhibit the transparency of order status and prevent the efficient flow of goods, among other inefficiencies,” the paper pointed out.

Database management systems have been put in place by majority of logistics companies, but others still rely on analog processes such as having designated encoders input and update the data on the system using the documents filled out by truck drivers and warehouse managers.

The process of clearing and releasing goods is also “laden with all sorts of documentation that requires coordination across various stakeholders,” the paper said.

“The direct, human and analog involvement of different stakeholders opens up various avenues for inefficiencies such as misplaced paperwork, incorrectly filled out forms, and incorrect forms used-among a myriad of issues,” it added.