HomeForexExport consolidators’ revenues plunge as demand from OFWs drops

Export consolidators’ revenues plunge as demand from OFWs drops

By Jenina P. Ibanez, Reporter

EXPORT CONSOLIDATORS are losing up to 50% of revenue after the pandemic led to the repatriation of Filipino workers abroad that usually make up most of the demand.

The newly formed Philippine Export Service Providers and Consolidators Association, Inc. said the decline was caused by dampened demand and surging shipping rates amid a global container shortage.

“You’re looking at Filipinos coming back. You’re looking at freight (costs) increased 10 times. Definitely, our industry is down,” Philippine Export Service Providers Vice-President Jiten Lalwani said in a virtual interview last week.

“Based on speaking to fellow consolidators, most of us are down 40-50%.”

The global shipping industry has been facing a shortage of vessel space after demand bounced back in some countries, pushing freight rates higher and causing delays in goods shipments.

The shipping delays and port congestion impeded export consolidators’ cash flow.

At the same time, more than 1.3 million Filipinos have been repatriated since the start of the pandemic, most of whom were overseas workers, Defense Secretary Delfin N. Lorenzana said last month.

The industry group represents between 50-70 companies that export Filipino grocery products such as food and shampoo to neighborhood stores in countries with significant Filipino populations.

Export consolidators represented more than $1 billion in export revenues each year before the pandemic, the association said. Businesses in the sector assign one container holding multiple products to each buyer, making them distinct from other forms of cargo consolidators.

The export consolidators industry group was formed to work with government in addressing shipping charges, export compliance with each country’s varying requirements, and tax exemptions.

The group is asking the government to form a committee to align export strategies with private sector representatives.

“(We need) alignment of programs, alignment of funds, alignment of resources, and a plan that has to be definitive regardless of the administration sitting down,” Philippine Export Service Providers President Tomas B. Medina said.

Noting that there is still a big number of Filipinos abroad, he said the industry could reach significantly higher revenues once ongoing logistics delays are addressed.

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