FOR how often Filipinos talk about traffic, there are many misconceptions about its causes.
We assume, for example, that the largest culprit are private vehicles with only a driver and no passengers. This belief is reflected in the fact we encourage Filipinos to carpool during their commute and praise mobile apps that facilitate ride-sharing between those going the same direction.
While these efforts are noble, they neglect a major source of our traffic woes: delivery vehicles.
Delivery vehicles affect the local economy in four different, but similarly harmful ways.
Delivery vehicles exacerbate congestion.
Delivery vehicles like trucks, of course, are much larger than even the biggest consumer vehicle. That would be fine if these vehicles were filled to the brim with cargo and efficiently moved from warehouse to each of their delivery points, but such is not the case. Delivery vehicles routinely leave their warehouses filled at only a fraction of their capacity, and they tend to travel from point to point in haphazard fashion, often adding hours of unnecessary road driving even in a single day.
Delivery vehicles routinely ship products late or in poor condition.
Delivery vehicles are so inefficient because they are in-house trucks owned and operated by brands, who do not have the relevant expertise.
If it’s a business that sells coffee beans, for example, they would maintain a fleet to deliver their products to customers and enterprises across the country.
The problem is the core competencies of these brands is their vertical, not logistics. They do not know how to maximize the cargo of their vehicles, while maintaining prompt fulfillment of products, or engage in route optimization of their individual trucks and their fleet as a whole.
In short, when these trucks grind across the city, each represents a massive overreach of the brand: They are going where they do not belong. The worst part is that because these vehicles are poorly managed, consumers get their products late. All the unnecessary time on the road also means that sometimes products arrive damaged.
Delivery vehicles keep brands beholden to the status quo, doing the same thing their competitors are doing.
The stakeholders who can remedy this entire situation are the business owners, who need to evaluate their decision to build an in-house fleet in the first place. Most of them did it as a matter of simply following the status quo. Since other brands bought vehicles and created a fleet, they would do so as well.
The general thinking - such that there is any - is that because labor in the Philippines is cheap, and the capital expenditure of purchasing vehicles would save them money in the long-run, it makes sense to operate a fleet. What they fail to calculate in this equation is the opportunity cost of venturing into what is essentially becoming a logistics provider.
Delivery vehicles represent a massive opportunity cost for brands.
By operating a kind of logistics subsidiary, these brands need to perform a host of functions that they may have never done before. These include everything from hiring and training drivers and procuring packaging for transport to establishing best practices for material handling and optimizing route and delivery schedules.
Reread the previous sentence again. Did you see the words “product” or “business” mentioned at all? That’s because maintaining an in-house fleet pulls brands far away from their core competencies toward a completely unrelated industry, draining time, effort, and money in the process.
In short, with the current glut of in-house delivery vehicles, everyone loses. Consumers may get their products late or in poor condition. Filipino commuters have to suffer through the traffic brought on by these delivery vehicles. And business owners waste money and time by maintaining an unwieldy, inefficient in-house fleet.
The best solution for these businesses is to turn to an on-demand logistics provider, of which there are already several operating in the Philippines.
I myself am proud to be the founder of Mober, which helps many enterprises - including both e-commerce companies and brick-and-mortar retailers who sell larger products - offer same-day delivery to their customers.
Since our expertise is in on-demand logistics, all stakeholders win: Customers get their products in a timely manner and in a pristine condition. Filipino commuters are spared less traffic because the routes of our vehicles are optimized and their cargo load is maximized. And business leaders get to save money, and more importantly, time that they can now spend on higher value company needs.
Despite these benefits, the decision to tap an on-demand logistics provider is never an easy one, as I have personally experienced with potential partners.
Doing so would require flouting conventional wisdom and going against the status quo - two actions which are always fraught with challenge.
When speaking to potential partners, I thus often end the meeting with a question, one which applies as much to their business direction as to their logistics plans: Would you rather go where everyone else has already been, or where no one has gone before?
Dennis Ng is the founder and CEO of Mober, a mobile app that enables consumers and enterprises alike to enjoy the benefits of on-demand, same-day delivery. Ng is a frequently cited thought leader in Southeast Asia’s logistics space and regularly contributes to business and tech publications in the Philippines and around the region. Mober is also backed by the 2Go Group, the transport solutions provider of SM Investment Corp.