PPG Philippines Grows with Economy, Population

Forty years and several corporate changes have transformed Royal Cargo Inc. into one of the most comprehensive logistics services providers in the Philippines today. Royal Carg is also a founding member of Project Professionals Group.

Rooted from a long-time association with a German group of investors led by Michael Raueber, Royal Cargo continues to ride on the growth of the economy, providing end-to-end transport solutions by land, by air and by sea.

At the helm of this B2C company is Elmer Sarmiento, president and chief executive officer, who as a young accountant joined the company in 1980, just two years after it was established.

Sarmiento has seen the company evolve from a traditional freight forwarder into a multimodal business and into what it is today, providing project transportation, freight forwarding, cold chain, logistics warehousing and distribution, shipping, heavy haulage, customs clearance, and even logistics solution for clinical research.

It was in the 1990s during the acute power shortage in the country that Royal Cargo, then owned by a German global firm, saw the opportunity to engage in project transportation, when the then Ramos administration saw the need to fast-track the construction of power plants to address the power crisis.

According to Sarmiento, Royal Cargo delivered, mostly turnkey, some of the biggest power plants at the time, starting off with the Bauang power plant. It also undertook  the Tabangao asset renewal for Shell, the onshore service for Malampaya as well as the backbone of transmission lines for the National Power Corp.

By 2001, Royal Cargo had entered the domestic freight business. 

Here, Sarmiento said, Royal Cargo, just like in project transportation, found a niche in providing all sorts of specialized handling – heavy haulage, cold chain, freight forwarding, etc. 

The past three years, Royal Cargo has invested $60 million for the construction of its North Hub as well the acquisition of additional trucks, cranes and properties.

Last July, the company inaugurated its Cargo City North Hub in Bulacan. Part of the company’s expansion plan to provide efficient distribution channels in Northern Luzon, the hub is located along the Plaridel Bypass Road in Bulacan and is by far its largest and most-modern distribution hub. 

Sarmiento said companies like Royal Cargo also benefit from the Build, Build, Build infrastructure program of the Duterte administration for ad hoc services: for transport of equipment, heavy haulage, delivering tubes for airports, among others. 

He added the company continues to do turnkey projects for coal power plants as well as solar and wind power projects.

“We are based on opportunity and economic development. We depend on trade, export and import and on project (transportation). We depend on vertical construction such as power plants, LNG (liquified natural gas), oil and gas and refinery,” said Sarmiento.

A growing population with a changing consumer pattern has prompted Royal Cargo to put up the cold chain business. 

The company also covers major cities for its warehousing and freight forwarding business.

Last year, the group entered the shipping business with the acquisition of two ships, one of which will be delivered middle of the year.

This will help move domestic containerized cargo and address the high cost of shipping in the Philippines, Sarmiento aid.

Royal Cargo acquired a container vessel with a top speed of 20 knots, a deadweight tonnage of 13.751 and a maximum container capacity of 1118 twenty-foot equivalent units, which serves as its first-ever container vessel as it revives its imprint in the domestic shipping industry.

“Expanding our vessel capacity in handling shipping operations will definitely position us as a well-rounded and reliable logistics partner and help us penetrate the market better,” Sarmiento said.

He said the company will also create hub and spoke where it would consolidate its warehouses that are now scattered all over the south of Metro Manila for its south hub.

Likewise, the company is building a hub in Cebu to serve a wider market in the Visayas and is looking into a similar project in Mindanao, particularly Davao and Cagayan de Oro.

“There are opportunities to maximize our operations,” Sarmiento said.

Royal Cargo also has operations overseas to support its network. It is now present in 13 countries. 

Sarmiento said the company eyes further expansion for project transportation in Indonesia. Royal Cargo is currently present in Papua New Guinea for project transportation for that country’s mining and LNG businesses.

Royal Cargo will continue to invest in acquisition of specialized equipment for heavy hauling, including self-propelled modular trailers, Sarmiento said.