Transport giants as Fedex and DHL are losing business to freight forwarding companies who cater to the shipping requirements of online Filipino shoppers and charge only competitive fees, according to a report by the US Department of Agriculture (USDA).
According to the American agency, Filipino online shoppers spending billions of dollars each year, balk at the steep shipping fees demanded by Fedex and DHL but have worked around that disincentive by coursing their purchases through freight forwarders instead.
In a report accessed by Context.ph at the Department of Agriculture, Filipino online shoppers short circuited the shipping process with the help of the freight forwarders themselves who assign consumers a post office box in the United States from which items costing a minimum amount are dropped for shipment to the Philippines.
The USDA particularly noted the online Filipino shopper are “familiar with Fedex and DHL rates” who find them “too high” and are then forced to patronize freight forwarders who charge more competitive prices.
According to the USDA, some 70 million Filipino accountholders use the system to purchase items that are not available in the Philippines, including food supplements, baked goods, chocolates, confectionery, whey protein powder, pet food, coffee, tea, flavored energy drink, wine, beer, alcoholic spirits, prepared vegetables, fruits, nuts, dairy products including infant milk, flavored milk and cheeses as well as honey and olive oil.
The online business of US giant Amazon has proven popular among Filipino who will ship purchases for items costing at least $49 to a Philippine address, the agency said.
The USDA cited data from the Department of Trade and Industry (DTI) showing some 12,000 individual shipments with estimated freight on board value of $70 million just last year alone, the bulk or 60 percent of which were shipped from the US.
So-called cross border e-commerce (CBE) transactions in the Philippines is forecast to hit $5 million by 2025 from zero dollars in 2019, the USDA said.
