Balikbayan Box Issues and Tips
Manny Paez

It is surprising to see that there are takers of five balikbayan boxes for one hundred dollars. It may sound harsh but with this kind of pricing, this shows the lack of respect of balibayan box companies to their profession. This also shows how gullible some of our kababayans.

I can also see some people take the efforts to bring down their balikbayan box, load it in their compact car without any dolly or lifting equipment and drive to a drop off supermarket just to save a few bucks. This people did not see the the issues of their private information being flashed  to every Tom, Dic and Harry in the store.

There are a lot of developments in the shipping and travel industry that affects every Filipinos in America and other parts of the world. The ocean container shipping rate has increase five folds within the year alone and the airline fuel has increased significantly thus the increase in air fares.

Balikbayan box shipping  price adjustment is inevitable if companies would like to operate in the black.

I remembere when I started balikbayan box business in 1994 in Washington, DC, its charges for a standard balikbayan box to Metro-Manila was $95. There was also a $10 pick up fee.

Gasoline was only less than a dollar per gallon then. Now it is more than three dollars per gallon.

When I relocated to Los Angeles, CA in 1998 to position Manila Forwarder in the hub of Philippine shipping, gasoline here was in the dollar fifty per gallon.

The prevailing prices then were $65 for a standard balikbayan box to Metro-Manila. The lowest rate then was the one that offers $45 per box but you have to buy your box and drop it off at their agents. This was further popularized in various supermarkets where patrons would see stacks of balikbayan boxes lined up on the aisle.

These practice of dropping off ones balikbayan boxes have started to become unpopular as all the information of the shipper can be clearly seen by all passersby making it a privacy and security issues, as some unscrupulous individuals can be seen taking notes of the information visible on the packages. 

A few years prior to 1998, when I was making my feasibility study for California operations, I was told that the prices of sending balikbayan boxes to Metro-Manila was an average of $75 and there were only about five balikbayan box companies then. Most have closed shop because of the unrealistic pricing they offered to lure clients.

The balikbayan box price war has resulted into a lot of casualties, from company owners to disgruntled consumers.

More balikbayan box companies are expected to fold shop with the turn of events due to higher cost of operations vis a vis their very low pricing that did not consider other expenses like tax, insurance, government regulations, among others.

I know that there is better way of doing business than joining the fray, I thought of ways to provide value for every dollar spent by my clients so I offered a bigger and more durable box, a Manila Forwarder original, the JUMBO BOX.

Jumbo Box is one third bigger than the average balikbayan boxes. Its box is also of thicker and better quality than any balikbayan box available in the market at that time. I positioned Manila Forwarder as the quality. alternative for a better price that targets the well off and educated segment of the market. Now, Manila Forwarder is the choice shipping company of prominent personalities in business, entertainment, and sports industries.

Initial Pricing
Manila Forwarder’s introductory price in 1998 was $79 to any point in the Philippines. A good deal for clients who sends their boxes to Visayas and Mindanao. Making these as our market niche, Manila Forwarder also added special values like putting security seal in each boxes and wrapping them with industrial strength plastic for further protection. We also offered the first in the industry, internet package tracking.

A couple of months after that, We had the feel of the market and adjusted our pricing in to $75 per jumbo box to Metro-Manila and adding $5 for Central Luzon, and so on. Mindanao shipments cost $95 giving clients an average of $35 savings for every Jumbo Box they ship.

Cost and Value
Rate of course is one of the major factors in choosing a balikbayan box company; however, Manila Forwarder recognizes that the rate should be supplemented with a competent customer support, efficient delivery system and compliance with all government regulations.

Manila Forwarder’s decent pricing allows the company to continually improve its services, recruit quality staff, respond to client’s feedback and complaints, invest in new technology and equipments, and help in various community projects.

When the US-Asia trade imbalance occurred a few years ago when it has come to a point that shipping lines were shipping empty containers back to Asia, shipping lines lowered their rates to US based Freight Forwarders to generate shipments.

Manila Forwarder passed this savings to our clients by offering Suki Card where they get $5 off in every shipment and free shipping on their 15th box.

However, the present gaining strength of Asian currency towards US Dollar generated a lot of export from the USA that the demand for Asia-bound containers from USA has dramatically increased that US Freight Forwarders are even scrambling just to get a booking.

Another major factor is the fuel expenses that continually increase, including the Christmas holidays wherein American people spend more time on the road.

In airline and shipping industry, they call the rate increase here as fuel surcharge to avoid filling for their new tariff rates increase. This increasing fuel prices resulted in the slower pace of sailing of ocean vessels to save on fuel. It's like saving fuel when one drives 55 mph compared to 80 mph.

Since the shipping lines are catching up from preceeding years operational loss, the slowing down of sailing was further aggravated by  a $900 rate increase per ocean container last  May 1, 2008 and an additional $300 increase last June. Most of these increases have been absorbed by the balikbayan box industry and not passed to consumer as common business procedure would dictate.

Ocean shipping to Port of Manila that used to be 17 days is now 21 at the least. There is also the usual US and Philippine goverment inspections that can delay the shipment to a couple of weeks or so. It is now unethical to promise 25 days delivery time as goverment inspections are getting frequent. Aside from the delays, each US goverment inspection costs the balikbayan box company an average of $2,000 in fees which is also an added cost to the company.

The increase in balikbayan box shipping is inevitable and those who will not increase their prices will likely fold shop in a few months or so. Some might just be waiting to reap from this coming Christmas season before disappearing. Consumers need  to scrutinize the balikbayan box company that they would use this Christmas and put the dollar saving in the right perspective.

Experience and Capability
A good number of existing balikbayan box company in California are one-man operation. These entrepreneurs are former agents of established companies that decided to do business of their own. These companies have a long experience in picking up balikbayan boxes and community contact but lacks the experience in finance, documentation, government regulations, and all the intricacies of the logistic operations.

One-man operation companies usually do not ship their own containers and sub-contract the services to a consolidator. Most problems are from this kind of operations as these companies operates under government regulations.

Location
It is advisable to visit the office of the company that you will use, even once just to check its operations.
Take in consideration the stability of the company and the security of your balikbayan boxes. Some companies sub-contract their offices in supermarkets, beauty shops and video stores. Some even operate in the parking lot. Consider your privacy and the security of your packages. Most locations like this do not require renters insurance making your balikbayan box unprotected.

Pricing
The cut-throat competition has been for the benefit of the consumer. However, where shipping a balikbayan box to El Salvador costs $150, and the one going to the Philippines is $55. There is something obviously wrong in the Philippine balikbayan box industry.

The balikbayan box industry has been the patron of various community inspired endeavors before but such is slowing disappearing due to some companies who tries to short change the business. The industry needs to breath and consumer support is needed. Low pricing smells trouble. Very very low price is a placard in ones face to avoid.

Philippine Operations
The Philippine Department of Trade and Industry is always bombarded with complaints of undelivered balikbayan boxes during the Christmas season. Some victims also use the mass media to air their complaints. However, most of the complaints hit a blank wall as the Philippine government does not have jurisdiction to go after those companies that does not have a legal entity in the Philippines.

A good number of entrepreneurs would put up balikbayan box companies on the last quarter of the year in time for the balikbayan box season without proper planning. These companies will lure the consumer with their low prices and use their friendship as the selling point. They will then obtain a business credit with a consolidator to provide them the shipping services but at a certain point, with a business on the red due to low pricing, they would stop paying the consolidators resulting into non-deliveries. Non-deliveries means your loved ones will not have your hard-earned padala. The friend who convinced you can do nothing about it as he is a victim himself.

What is your recourse?

On the US side, Federal Maritime Commission has received tons of complaints againts undelivered balikbayan boxes resulting into a Fact Finding Inquiry. They have also started a media campaign warning consumers against unscrupulous companies.

The Positive Side of the Balikbayan Box industry

Not everything has been stagnant in the industry. New technologies have been developed and being implemented by Manila Forwarder and perhaps some other companies. As the leader in balikbayan box technology, Manila Forwarder uses the Voice Over Internet Protocol ( VoiP ) for after hours customer support providing worldwide clients with live personnal support.

USA and Manila offices also shares the same data using Virtual Private Network ( VPN ) to answer the querries. It's also impressive that North America clients are talking directly to Manila Forwarder Philippines staffs as they are the one  dispatching those packages at the office located inside the secured North Harbor.

Manila Forwarder Philippine is the only balikbayan box company that is at the hub of Philippine shipping as all local shipping lines are located within walking distance from Manila Forwarder.

Manila Forwarder also uses bar code technology for accountability of individual packages.

All packages are securely encoded in the company website where one can track it's status any time of the day. All shipment information are updated daily at www.manilaforwarder.com.

Let your Fingers do the Walking

Everyone should be happy this Christmas and there should be no undelivered balikbayan boxes this year. Your balikbayan boxes are fruits of your hard labor. That's a lot of overtime and efforts looking for bargains to share something to your loved ones in the Philippines. Enjoy the moment of sharing.

Getting a bargain is good. Make it an educated bargain.


About the Author:

Manny Paez is a retired US military and former member of Philippine Police Force. A graduate of BS Marketing from San Beda College and studied Graduate Studies in Criminal Justice from Cal State Long Beach. He started Manila Forwarder in California in 1998.