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The good stevedore

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By Bernie Cahiles-Magkilat

 

ROBERTO R. LOCSIN President SUBIC BAY INTERNATIONAL TERMINAL CORP.

ROBERTO R. LOCSIN
President/SUBIC BAY INTERNATIONAL TERMINAL CORP.

With a booming career in New York, ROBERTO R. LOCSIN could have chosen a life in the US. But, the lure of home beckoned and presented itself a good opportunity to be part of the world’s leading port operator, ICTSI Group.

Locsin, who holds an MBA from Boston College’s Arthur D Little School of Management in Chestnut Hill, Massachusetts, is the President and General Manager of Subic Bay International Terminal Corp. (SBITC), the fastest growing ICTSI subsidiary in the Philippines.

As businesses are moving towards Northern Luzon, SBITC is in for a business never been seen before and Locsin is ready for the big challenge.

SBITC

SBITC manages and operates New Container Terminal (NCT) 1 and 2 in Subic Freeport. These terminals provide on and off-dock marine port cargo and container handling services.

SBITC has been serving the growing economy of the northern regions of the Philippines through world-class container handling services at the Subic Bay Freeport since 2000 initially at the Naval Supply Depot (NSD).

In 2004, Subic Bay Metropolitan Authority (SBMA) began constructing a dedicated container terminal, the NCT-1, as part of its Port Development Master Plan. In October 2007, SBITC was awarded the management and operation of the NCT-1. SBITC is certified compliant with the ISPS Code.

When Locsin took the helm of SBITC five years ago, Subic was still a sleepy little port doing 28,000-30,000 TEUs. But in 2014, the port attained 73,000 TEUs an indication of the tremendous trust that was beginning to unfold in this port, north of Manila.

Notably, the growth was something organic having come from the same customers who saw more services being made available by SBITC. From only 2 shipping lines, this Subic port has now most of the major line operators that connect to the world. From only 33 vessels almost two years ago, there are now 47 ships calling on in Subic.

With various routes that have been opened to Asia, US, Latin America and Europe, more companies are also enticed to ship through Subic.

“We’ve just opened Taiwan, Vietnam and Indonesia because transit time is less than 7 days,” adds Locsin, who also leads strategy for ICTSI Asia.

This is what Locsin calls confidence the market has given to companies and the leadership of SBMA from then administrator Roberto Garcia to the new chairman and administrator Atty. Wilma T. Eisma, who carries the banner forward and encourages many of the businesses to flourish with the many options being offered in the Freeport.

SBMA has made ease of doing business in Subic simpler and quicker. For instance, importers are now allowed to undertake warehousing in the freeport and pay only the taxes required once their merchandize are taken out of the freeport.

“The port is for everyone, just pay the correct taxes and duties when you leave the gate,” he adds.
Locsin even cited SBMA and the Bureau of Customs in Subic for doing their jobs well and making doing business in Subic not as complicated. There maybe a little difference in doing business in Subic than in the regular port, but Locsin stressed the barrier is low.

The ease of doing business in Subic has also attracted new brokers into the freeport.

The government is further making connectivity easier with the planned railway connecting the two freeports: Subic and Clark. “I do believe very strongly the value proposition in this railway project that will support either for passenger or for cargo,” he adds.

North

With the development in Region 4 in Southern Luzon seemed almost saturated, it is now time for Northern Luzon, particularly Region 3, to shine. Companies in the south are now establishing their presence in the north.

Logistics firms are establishing cold storage and warehouses in Region 3 to be near their customers.

“If you compare North and South with Manila as the center, there are now greater opportunities in the north,” says Locsin noting that Region IV-A has become dense with industrial estates in Cavite and Batangas almost a stone throw-away from each other.

“But if you go to the north, Region 3 is composed of five strong provinces,” says Locsin, who once served as vice-president for the strategic services group at a global Bio-Technology and Pharmaceutical marketing consultancy in the US.

Investors have started flocking into the north in the last three years to look at the opportunities. They started with warehousing for agri business.

“There is the interest to start looking at that part because of the continued growth,” says Locsin, who has had several years of management and strategy consulting experience in the financial services, life sciences, telecoms, media and entertainment sectors with Capgemini and Ernst & Young Advisory in New York City.

He cited the rallying cry from Transportation Secretary Arthur Tugade for focusing a lot of talks to move to Clark.

The Bases Conversion Development Authority has jumpstarted the North Luzon story. Its efforts in the past several years are now bearing fruit and gaining momentum with the massive developments in Clark, the sprawling former American airfield in Pampanga.

“That is the success of the current administration, there are lots of halo effect when we talk and there is a great pool of workforce in Zambales and Bataan,” he adds.

When a foreign investor asks for the best stitchers or sewers for bags, Locsin said they can be found in Bataan. “So, you’ve got lots of workers to tap and the strength of five provinces makes it a good value proposition to expand and try new markets,” says Locsin.

In terms of contribution in the Philippines, SBITC is the fastest growing port in the portfolio although other ports, like Davao, are posting tremendous growth as well.

“I love the pressure,” he says otherwise he would have been bored out of his wits.

The company’s growth though is underpinned by the growing domestic economy.

“The domestic economy is healthy and we have the capacity,” says Locsin, who has been on the ground, both on the cargo and owners’ sides. That makes him comfortable enough in SBITC’s future.

Improved capability

This is the reason that its parent firm continued to support SBITC to make it a stronger terminal.
Already, SBITC is adding additional equipment with two new RTGs (rubber tire gantries) in November this year as they look forward to bigger volumes.

“It is a significant investment in terms of equipment but it shows and signals the market that ICTSI is going to continue, support and invest in Subic,” he adds.

SBITC is looking at 20-30 percent growth this year with more existing businesses expanding their capacities and generating more exports.

In fact, Locsin said that one customer alone has added 14 percent in net new customers in the north within a span of 9 months. “That is truly remarkable,” he adds.

The latest figure is that SBITC was doing 125,000 TEUs. Although it is still far from hitting its throughput capacity of 600,000 TEUs, Locsin cited at how they have been growing to reach an average capacity utilization of 30 percent.

With less than 50 percent capacity utilization, Locsin said they have enough capacity to serve demand in the next two to three years and support growth spillover from Manila.

“We have more than enough capacity,” he adds noting that he has spoken to a lot of customers, both cargo owners and shippers and found out that they have been enjoying going through Subic.
He was comfortable that their customers in the south are able to split business in Manila and Subic.
In the north, commodities vary but the number one cargo would still be electronics, garments, agriculture products, hardware and construction materials. Bulacan is more of agriculture products such as grains for warehousing because it’s more efficient to ship using containers due to the drastic change in weather patterns.

“We see input goods and outputs being shipped. But we are also starting to see fast moving white goods coming in,” says Locsin as he cited more malls sprouting in San Fernando City in Pampanga.

“There are a number of warehouses being established there in the last six months,” he adds. People also forget that there is no truck ban in the highways and the lovely SCTEX provides a seamless connection between the two freeports. Still, Locsin said they don’t have the monopoly of cargo shipments from Clark.

But the opening of more routes would entice more shipments going through Subic. At present, south China is its number one export destination because there are more options of sailing days.

“Subic now no longer an after thought because it has developed into a very good choice,” says Locsin.

Aside from that time, ICTSI continues to support the improvement in the port by focusing on technology that put the group’s port operation in the forefront of automation. Customer payments are done in simple and automated processes.

Locsin cited SBMA’s policy for deferred tax payment until such time the product is removed from Subic has been a big help to businesses in managing their cash flows.

Workers

ICTSI maybe one of the most advanced if not the most advanced in the world in port technologies and infrastructure but, Locsin would like to emphasize their people. Locsin has highlighted the fact that Subic workforce has also risen up to the challenge.

SBITC has 147 workers, mostly coming from nearby towns up to Nueva Ecija and Pampanga. “These are world class workers serving lots of customers, and we have dedicated consigners from checkers all the way to people at the office. All of those disciplines are homegrown,” he adds.

“I think we do well in taking care of our people for without them, we are just a bunch of machines,” says Locsin. This is sweet coming from an employer, who acknowledges that his staff are more important than the machines.

Thus, even if an employee’s problem is not SBITC’s, even if they are not related, and even if their customers are small or medium or big, they all help each other.

“Without them, we are just steel and cement,” says Locsin, who cited employees for staying up late up to the early morning the following day as port operation is a 24-hour thing around the Subic Freeport.

When he is not in Subic or Manila, Locsin is always on the road, making the rounds with their customers in San Fernando, in Quezon City, and in Clark or further north.

Locsin, who had worked in Manhattan focusing in corporate strategy and management consulting across industries for a good ten years, had decided to return to the Philippines with his Mexican wife. An opportunity in ICTSI came up and he was assigned in one of the group’s special projects and Subic is one.

“My boss is out of my way and allows me to do something for Subic and by default that is also my style,” says Locsin, who directly reports to ICTSI Senior Vice-President Christian Gonzalez, ICTSI head of the Asia-Pacific region and President of the ICTSI Foundation. Gonzalez is the nephew of ICTSI Chairman Enrique K. Razon, Jr.

He cited their passion for work and strong commitment for the company, which just celebrated their 36th anniversary. Both leaders have the commitment for the brand thus, it is now a shining global emblem, dedicated to serve port needs with the goal to become the best in the industry.

“ICTSI is best in IT, best in safety and that summed up all together to become the best in port terminal management,” adds Locsin, who despite his American education still considers himself a “probinsyano” as he traced his roots from the small but growing Dumaguete City.

Now, Locsin is not just a probinsyano, but proud to call himself a “stevedore” of SBITC or ICTSI.
“I am a good soldier of Ricky and Christian and I find pleasure both in helping the business grow and watching my family,” adds the 44-year old Locsin.

He equally fits to the traits of the Razons being dynamic and smart problem solver. “I like their ability to take things through, making a day go by and better,” he adds.

Since day one, he said, ICTSI has been a good place to work for. That’s what makes ICTSI enduring and becoming the world’s leading port operator.

While business is robust, Locsin said he would like to see the best fit for the business to be able to prepare for the future five years from now.

“What I need is for our business to be prepared for the future,” he adds. Thus, he is looking at offering innovative products like entertaining domestic cargo down to Palawan or shipping foreign containers out and connecting the customer and foreign carrier.

There are lots of ways to further serve Filipinos. For instance, there are plenty of Filipinos in the north who have migrated who are now in Hawaii and can send their balikbayan boxes to their loved ones in the Philippines.

Townhall meetings

“I love town halls,” says Locsin, who holds big town hall meetings with his staff on a quarterly basis. This is also one of the best practices of ICTSI, especially in the Philippines.

If there is one thing that comes naturally to him and ICTSI, it is the Filipinos’ sense of “malasakit” (concern or compassion) plain and simple. When he is not behind his desk, Locsin is just one of his men down at the pier with his vest on.

He loves going for a walk at the office and talk to other guys just to see how they have been doing.

SBITC workers have excelled in their fields that some of them are now deployed in other ICTSI ports like in Papua New Guinea to support the local operations there. They have become the best example of great jobs and world class workers.

SBITC has also a very strong CSR program. They work with the ICTSI Foundation in providing scholarships for the Aeta community. They also provided cash to build bathrooms and small libraries and reading programs for kids.

In their office, they have a daycare center to allow employees to bring their kids to work and as a fun way to introduce the company to their kids. This ensures also that employees, who commute from as far as Iba and further down to Morong and Lubao, do not miss work because there is no one to look after the kids.

The world of port operators, he said, is not limited to the men. Age and gender do not matter, rather he looks at what an individual can contribute to the growth of the company. He likes having a well-rounded team.

“You can be 22, you can be a woman, but if you are able to see the shared vision of an organization, that’s what makes age and gender irrelevant,” he adds noting that the head of his safety and security unit in Subic is a woman.

His people are versatile too. His acting terminal manager comes from the engineering unit instead of the usual operations. This makes ICTSI create a strong leadership culture.

Being dynamic and innovative in doing things are important in the monotonous world of moving boxes.

“How can I make that exciting, making it sexy, and engaging, but to let them do the thing they do best,” says Locsin, who empowers people to do their thing the right way. Locsin was also influenced by all the people, lots of them partners and global leaders, he had the opportunity to work with in his previous jobs in the US. Having the opportunity to manage people has made him more aware of how to be a leader.

Locsin, the father of two kids, is an avid cyclist because it gives him time to reflect when alone. He has cycled since he got his first BMX, a 1972 Peugeot, an old bike that made him fell in love with cycling.

While working in New York, he had great time cycling there. He appreciates that there is a good cycling culture in the country like in Nuvali where there are less cars.

“Just being out on the road and the wind in your face is a lot different than walking or running, what a way to decompress,” he adds.

Because work at the port is a 23-hour job, Locsin observes a routine at work and at home. He is normally done with his workout by 5:30 in the morning so he can still have time with the kids before heading for work to be in the office at 7 to 7:30. Calls, emails, and checking on his teams remotely occupied him the entire morning that by noon time he has already a good handle of how business is. The afternoon is normally spent with customers and meeting people.

His day is spent touching people’s lives and peppered that throughout the day with his presence, making sure he is available for his team and customers.

This is the life of a good stevedore.

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