HONG KONG – I have attended the annual Asian Logistics, Maritime and Aviation Conference for many years now, and every time I find myself grappling with the same question: what exactly can we take home to our colleagues in the Philippines?
Not that the last few years have been totally irrelevant. Supply chain trends and developments – the challenges we face, the technologies that emerge to address those issues, the approaches we take – are generally the same, but take different forms to account for the unique complexities inherent in each market. In many cases I find myself marveling at how far ahead the discussion is on topics such as omnichannel fulfillment and the digital economy outside of the country – and then to see us suddenly surge ahead just a few years later.
That said, I personally have always found it interesting to see how Hong Kong, long a trading outpost since its days as a British colony, has worked to enhance and improve its status as a logistics hub. Just roughly a decade ago its government was promoting the city’s role as a “superconnector” linking the growing industries of mainland China with the rest of the world. Now, as that link has become an arguably liability thanks to Donald Trump’s relentless antagonism of China, the city has taken steps to maintain its status as a major trading hub, still leveraging on its links with China, but now playing a role in connecting to other underserved and emerging economies.
Among the sessions in this year’s ALMAC – co-organized by the Hong Kong SAR government and the Hong Kong Trade Development Council, and once again supported by SCMAP – included continuing highlights of other economies, particularly in Central Asia, being connected to China’s Belt and Road Initiative, as well as panels devoted to the low-altitude economy, just as Hong Kong seeks to take advantage of the rise of cargo drones, and most likely aligning itself with similar measures in the mainland. Maybe not something we in the Philippines can make much use of, but – especially in the latter’s case – it’s still something we should keep an eye on, if only for our own domestic requirements.
One thing I also found interesting is how ALMAC promoted the recently launched Port Community System, a new program linking Hong Kong’s trade nodes – through sea, air and land – promoting greater visibility and data-sharing, as well as easier trade facilitation processes for shippers no matter how they are bringing goods over. Development of the PCS began in 2023, with extensive pilot testing covering certain cargo-handling processes, with a formal launch last May, and the system being opened to stakeholders beginning early next year.
It may sound like a fancy, sophisticated system, but reading through various descriptions it’s clear that the PCS only brings together existing concepts, processes and technologies to improve logistics services in the city. Its core function is the ability to track and trace cargo, whether shipping through sea, land or air. This also allows information such as cargo location, transportation status and customs clearance to be gleaned by all stakeholders. The application of blockchain allows for another degree of data protection and reliability. In addition, a proposed one-data-multiple-declarations system which significantly shorten the trade facilitation process.
On top of this, the PCS can collect data pertaining to the movement of cargo which will allow analytics tools and other AI applications to optimize various aspects of port operations, potentially further speeding up the movement of goods from port to shelf. The data can also be visualized to allow stakeholders with access to the platform to make better decisions, faster.
Considering the progress of conversations within Philippine supply chain when it comes to embracing emerging technologies to improve performance and service levels and increase visibility, something like Hong Kong’s PCS should not be far from view. And indeed, it isn’t. One of our visions for the Department of Trade and Industry’s Supply Chain and Logistics Center is a “logistics dashboard” that allows stakeholders to easily see bottlenecks, choke points and other issues across the country’s transportation network. We knew, however, that this would take some time to implement – and most of it will be spent on getting different government agencies on board to give us their data in real time.
In fact, adopting this idea does not even have to cover the whole country. The first thing I thought about is the interconnected ecosystem developing between Manila, Subic and Batangas ports. Perhaps this is something that can be further enabled by planned American investments under the Luzon Economic Corridor plan, alongside that cargo rail connecting those three ports as well as Clark International Airport. But I digress.
In our engagements with the government, we have noticed that they are happy to let the private sector take the lead, at least initially – we, after all, would have a better idea of what is needed on the ground. However, once needs are identified, we cannot leave the implementation to the private sector, if only because of our (self-serving) interests. For our supply chain networks to take those much-needed steps to global competitiveness, what we really need is clear leadership from the government, who will implement a clear plan and can get our notoriously siloed departments together.
But where will it come from? We have the DTI’s Supply Chain and Logistics Group – still ably led by Undersecretary Mary Jean Pacheco – but its end goal is to improve access for MSMEs, as part of the agency’s overall mission to promote Filipino industries and products. The Department of Transportation oversees some agencies critical to our logistics facilities, but can be mostly preoccupied with the personal mobility side of things rather than the movement of goods – although it is leading the charge in some aspects. Even the Department of Agriculture now has a logistics office, currently busy setting up cold storage facilities for fresh produce. Ideally we would have one department overseeing these efforts, but the best way to start is to have everyone talking, so efforts on one end are fully realized and not duplicated. But let’s face it: it’s easier said than done.
Henrik Batallones is the marketing and communications director of SCMAP, and editor-in-chief of its official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.
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