TNT launches Asia road express service

Global express and logistics services provider TNT yesterday launched an Asia road express service which by 2007 will be able to truck small cargo from Singapore to Chinese cities.

The new service may also see shippers beginning to opt out of both sea and air freight for some cargo with a more cost effective road transport option. This may result in some losses for both shipping lines and airfreight operators in Asia but TNT, however, sees the service as complementing the region's well developed air and sea freight routes with the potential of significantly cutting logistics costs for businesses.

It has launched what is claimed to be Asia's first and only integrated network spanning Singapore, Malaysia and Thailand, and plans to expand it to link up more than 120 cities across 4,000 kilometres when Vietnam and Cambodia are added in the first half of next year. The global express forwarder hopes to extend the road links eventually to China by 2007.

This simply means that by 2007 a customer will be able to send a package door to door from Singapore to China through a single forwarder and receive just one bill for the entire service.

And because it's a scheduled service, TNT says it's offering an unrivalled day-definite express delivery service.

'For example, door-to-door transit times from Singapore to Bangkok take just three working days, which provides cost and time benefits for customers,' said TNT regional managing director Michael Drake yesterday when announcing the new service.

'Our vision is to build an Asia road network as extensive as the one we have in Europe and the Middle East. The TNT European road network is the most extensive road delivery network in Europe. It links 33 countries, handles 4,000 Europe-wide international linehauls across two million kilometres with 5,700 tonnes of freight every week,' he said.

He pointed out that countries in Asia spend up to 30 per cent of GDP on logistics, which is substantially more than in Europe and the US where it's typically under 10 per cent.

Part of the reason for this higher cost is the absence of a 'homogenous and well-connected' road transportation network in Asia.

But things are changing now, he said, with customs regimes being more efficient with the introduction of technology and governments in Asia spending more on building up road infrastructure.

TNT is promising a service that offers businesses a cost and time-effective solution with transit times that are two to three times faster than sea freight. However, the road service will be slightly costlier than by sea but much cheaper than by air freight.

A transparent 'all-in pricing' also means 'you know how much it costs' and a secure and scheduled service means 'you know when your package is going and where it is going', allowing customers to accurately plan and forecast, said Mr Drake.

TNT is investing about $4 million initially on a fleet of 10 trucks to cover the Singapore, Malaysia, Thailand region and will expand as business picks ups.

To give customers total peace of mind, GPS and enhanced security systems are installed in both the truck and the trailer, with an on-line link to police HQ through a security and command post in Kuala Lumpur.

Mr Drake said that customers mostly expressed security concerns over a road service, and that was why the system has a special focus on driver and vehicle security. He said that customers moving high tech goods and those in the medical life sciences sector have expressed keen interest in an all-road transport mode.

'One reason is the increasing fuel surcharges slapped by the air and sea freight industries making transportation more expensive,' said TNT Singapore managing director Mark Shorney. 'Supply chains are being re-engineered to meet the additional fuel costs. A further road mode of transport allows customers to be more intelligent in the way they use the different transport modes, giving them an option to change the way they do their business.'

Mr Drake said that in Europe some 60-70 per cent of business for TNT comes from road transport though revenues are not in the same proportions. But over time, he expects road transport to contribute more to the company's earnings when compared to air and sea freight.

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