Tag: Asia

China delivers good growth for DHL despite tough competition

Posted by | Oct 12, 2006 | |

John Mullen recalls sitting in Sir Peter Abeles’ office in the twin TNT Towers in Sydney in the early 1980s, watching his chief executive brief a junior colleague on how the company was going to break into the Asian package delivery market.

“The strategic discussion was, `Just go and open it’. He asked, `What do you mean by that?’ and Abeles said: `Get on a plane and go and open Asia. It’s got to be the future’.” As head of the Asian division of DHL Express, the global package delivery service owned by German logistics giant Deutsche Post, the 51-year-old Australian has had to move fast to meet the 50 per cent annual increase in parcel volume China has delivered over the past five years. DHL Express now has about 6000 staff in China, having built up the business by exploiting existing relationships with foreign companies that were establishing Chinese manufacturing operations for the first time.

But as growth of the Chinese middle class transforms the economy from being simply a cheap exporter of manufactured goods to a consumer society in its own right, so is DHL’s business changing from just being a conduit for the import of components and export of finished goods.

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Outdated logistics threaten China's economic growth

Posted by | Oct 11, 2006 | |

China needs to bring its logistics infrastructure and supply chain management capabilities into the 21st century if it is to maintain its competitiveness in the global marketplace.

Studies show that logistics expenses in China are higher than in countries with mature logistics infrastructure, and this has pushed up the cost of its goods. Industry analysts and third-party logistics providers said these supply chain inefficiencies, left unchecked, would undermine China’s long-term economic growth. “Compared to developed countries where logistics costs are approximately 9 per cent to 10 per cent of GDP, logistics costs accounted for about 21 per cent of GDP in China,” said Jerry Hsu, president, Greater China area, DHL Express Asia Pacific, citing Ren Xingzhou, director of the Market Economy Research Department at the State Council’s Development Research Centre.

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China's draft postal law angers private firms

Posted by | Oct 6, 2006 | |

Local and foreign express delivery companies have denounced the latest draft of China’s Postal Law, saying it would create unfair competition, violate trade agreements and destroy non-state businesses employing hundreds of thousands of people.

A meeting last week between industry representatives and officials from China’s State Council, or cabinet, and other departments failed to ease fears over the likely impact of the long-delayed law, express delivery company executives said.

They say one clause of the draft would give a unit of state-owned China Post a total monopoly over deliveries of parcels weighing less than 150g, which account for more than 90 per cent of the intra-city business of private delivery companies. The monopoly on small package deliveries would not have any immediate direct affect on international companies, but they would be hit by other provisions favouring China Post, tightening licensing controls and compulsory payments to subsidise universal postal services.

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