RORO Links the Philippine islands
By Riza Olchondra
Despite the Philippines’ richness in natural resources and agricultural products, a lack of infrastructure to bridge the archipelago’s many islands has resulted in uneven distribution of wealth.
This results in the ironic situation where both farmers and consumers go hungry. In Manila, for example, shortages in one product is not surprising anymore, while farmers in places like Mindanao often sell nearly at cost in nearby markets because they lose more to spoilage during shipping or don’t have enough stock for a whole container load.
Good thing, then, that Roll On Roll Off (RORO) Project, an infrastructure that is expected to link the different islands of the country.
The Philippine Ports Authority ( PPA) and the Maritime Industry Authority (MIA) are overseeing the project’s operations.
Seeing the ports and systems in place, private company Aboitiz Transport System (ATS) has pioneered a total supply chain service. Under its RORO program farmers can ship their goods, in bulk and retail-size quantities. FRUITS OF VISION
ATS’s 2G0, a supporter of the government’s Nautical Highway project through its RORO service, has also lent its expertise to the Department of Agriculture’s (DA) programs.
ATS has introduced the service to Mindanao fruit growers, among others.
RORO is a service that allows the loading and unloading of self-driven vehicles onto the vessel which results in increased efficiency and speed-to-market.
“We have simplified the process of distribution. With RORO, fruit shippers can reduce their post-harvest losses because we have cut the number of steps it takes to get their produce to the market,” Jerome Santos, sales manager for 2GO Solutions said.
“RORO is key to 2GO’s long-term goal of lowering our country’s total supply chain cost” company Chief Operating Officer Mike Camahort said.
2GO’s RORO was launched in 2004 and has significantly grown since then.
“The reception in the market for this service has been good as it simplifies the way of doing business,” Camahort added.
2GO also worked with the DA when it launched its Less than a Container Load (LCL) service via the department’s Barangay Food Terminal (BFT) and Bagsakan sa Palengke initiative.
2GO’s LCL service allows farmers to ship small volumes of perishable products as often as needed.
“Through the LCL, 2GO can transport vegetables, poultry, meat, fruits and ice cream with a low minimum requirement of 0.5 cubic meters. It’s very suitable for small and medium businesses,” 2GO president Sabin Aboitiz said.
The company said that even big businesses can benefit from the LCL service.
Through the LCL, farmers can consolidate demand requirements and load them onto the 2GO cold-reefer trucks to be distributed to all areas via ATS’ RORO service.
Through this partnership between 2GO and the DA, farmers are able to send their goods without the need for middlemen which greatly lowers their costs.
Farmers are given a competitive edge in the Luzon market thus empowering them to sell not only at the farm level but at the wholesale level as well.
Meanwhile, Agriculture Secretary Arthur Yap stressed the importance of 2GO’s role in the department’s programs to connect farms to markets.
“2GO is very critical because we definitely need a logistics handler to move commodoties. If you don’t partner with the handler, they can give unreasonable rates. 2GO has given us a very competitive offer for the Mindanao growers and we are able to negotiate directly with them” Yap said.
2GO’s supply chain service, launched in January 2007, completed 2GO’s line of services which starts from the release of goods from the manufacturer/producer to the delivery of products to customers and their various selling channels as well. The Cold Chain LCL marked the entry of 2GO’s supply chain into the movement of perishable commodities.
Cold chain, a temperature-controlled supply chain, is an uninterrupted series of storage and distribution activities under a given temperature range. Cold chains are common in the food and pharmaceutical industries and also some chemical shipments. 2GO is offering this service as a new option for customers to send smaller volumes of cargo that require cold storage. Customers will no longer need to worry about filling up a truck or container first because by sending smaller volumes of their cold chain cargo, they can ship more frequently.
2GO piloted its Cold Chain service in October 2007. Since then, the service has grown continually and now helps expand the distribution reach of players like Mekeni and Creamline, among others.
“Aside from serving corporate customers, we dream of putting the farmers and fishermen in touch with retailers in the markets. We want to make fresh produce and seafoods more affordable for consumers and more profitable for farmers and fishermen,” adds Michelle Aboitiz.
Enabling the Cold Chain services are the CRYO companies – Reefer Van Specialist Inc. (RVSI) and Reefer Trucks Specialist Inc. (RTSI) – which the Aboitiz Transport group came to wholly-own last June 2007.
CRYO has been in the business of refrigerated transport since 1982 and has been a trusted partner of the Aboitiz group for years, making the acquisition strategic.
“CRYO has over a hundred reefer containers and 50 reefer trucks which will be used for 2GO’s Cold Chain LCL. This enables 2GO to offer farmers, fishermen, food manufacturers and processors, and SME’s (small and medium enterprises) a more cost-efficient way of shipping their temperature-controlled cargo,” says 2GO Cold Chain VP-COO Michelle Aboitiz.
CRYO national operations manager Manny Arcilla said the LCL started in Boracay, Cebu, and Davao and will continue in Cagayan, Manila and other ports “to encourage clients to experience the solutions provided by 2GO.”