The word logistics in the maritime and shipping industry is a term widely used especially because 80 percent of goods are transported by sea. In ancient Greek, it was “logistikos” which meant to calculate; while in French it is “logistique;” in English, logistics is the system of information on resources which involves the transport of goods from one place to another. It is the process of recording, transferring, storing, and distributing the goods.

For a restaurant business owner, logistics is the process of planning, storage, and delivery of food to customers in a cost-effective manner, same as with the shipping industry. The lower the cost of logistics means more profit. It also serves as a tool to monitor a business’ efficiency and its service to its customers. Reducing costs and increasing customer satisfaction will always be the goal.

During one of the lectures during the 38th Advanced Course on Port Operations and Management organized under the International Maritime Organization (IMO), the importance of logistics in ports was emphasized to the 20 representatives of different countries.

The lectures were arranged by the Institut Portuaire d’Enseignement et de Recherche (IPER) of EM Normandie headed by Claire Ploneis together with the Haropa Port.

According to the 2023 World Bank (WB) logistics performance index, out of 139 countries, Singapore was in the top spot followed by Finland, Denmark, Germany, the Netherlands, Switzerland, Austria, Belgium, Canada, Hong Kong, Sweden, United Arab Emirates, France, Japan, Spain, Taiwan, Korea, USA, Australia, with China in the 20th spot.

The evaluation was based on the efficiency of customs processes, quality of infrastructure, ease of arranging shipments at competitive prices, quality of logistics services, ability to track and trace goods, and of course the timeliness of delivery.

The bottom scorers included the countries affected by armed conflict, politics, natural disasters, and landlocked nations, including Afghanistan, Libya, Somalia, Angola, Cameron and Haiti.

The Philippines ranked 43rd, a big leap from its 60th place in 2007. Of course, the Philippines can always do better by implementing changes like digital transformation. According to the WB report, digitalizing port operations would mean fewer steps in the supply chain. Remember the goal? The shorter the time of delivery, the more profit.

Philippine Ports Authority general manager Jay Santiago since 2016 has initiated the digital transformation of ports to hasten the flow of goods, speed up transactions, and lower costs. In fact, Philippine ports continue to participate in economic globalization, advancing their development among countries in Southeast Asia as reflected in the 2022 data from Drewry Maritime Research, surpassing static volumes of its Southeast Asian peers.

But what does reduced costs in logistics mean for the ordinary people?

As logistics costs decline, consumer prices in various sectors stabilize. Products ranging from food to electronics benefit from lower transportation costs, keeping prices in check despite persistent global inflationary pressures. For low income households, which are particularly vulnerable to inflation, the easing of transport costs provide relief, especially for basic necessities like food and essential goods.

The reduction in transport and logistics costs was a significant factor in tempering inflation in August 2024. While challenges persist, this development offers a glimmer of hope for consumers and businesses alike. With continued government efforts to stabilize the economy, the Philippines is on track toward a more sustainable and affordable future because, after all, we are all part of the logistics chain on the supply side — as we are all in the same boat!