Tag: Asia

Room for SMEs in logistics

Posted by | Sep 5, 2006 | |

With the growing affluence in Asia on the demand side and the emergence of China and India as the world’s factories on the supply side, Singapore’s strategic location puts it in good stead to become a regional distribution centre.

And this spells boom time for the logistics industry. Small and medium-sized enterprises (SMEs) within the industry can grab a slice of the growing pie, as long as they are innovative and carve a niche for themselves, say industry players.

The logistics industry is one of Singapore’s oldest industries, growing in tandem with the country’s development from a trading port into one of the world’s busiest trans-shipment hubs today.

According to Drewry Shipping Consultants, a London-based shipping consultancy firm, the world’s top 10 operators control 53 per cent of container traffic. Singapore is the world’s busiest container port, handling 23.2 million TEUs last year. It is also Asia’s fourth largest cargo airport, handling 1.83 million tonnes of air cargo last year.

With SMEs making up more than 90 per cent of the 6,300 logistics establishments in Singapore and employing about 60 per cent of the logistics workforce here, they are a key pillar of the logistics industry. And while they are competing against the likes of DHL and UPS, SMEs here should be able to hold their own if they are able to differentiate themselves, as shown by some of their counterparts which have gone into niche segments or are offering customised services.

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China separates government functions from postal business

Posted by | Sep 5, 2006 | |

China’s State Post Bureau (SPB) is separating government functions from its business practices, and its mail delivery services will become more market-oriented.

In a recent circular, the bureau announces the formation of provincial agencies in Zhejiang, Shandong, Sichuan, Shaanxi and Tianjin in the name of Post Management Bureau. And other bureaus of the kind will be set up successively.

With staff members mainly coming from traditional state-owned post bureaus, these re-organized management bureaus are under the direct administration of the SPB instead of the jurisdiction of local governments.

They are responsible for implementing China’s laws and regulations on the management of postal industry, working out related polices and standards, and supervising the development of postal market.

They also take charge of special postal services such as confidential correspondence, correspondence for compulsory military servicemen, distribution of the newspapers and periodicals owned by China’s Communist Party, and the delivery of reading matters for the blind.

In the meantime, profit-making postal services will be put into a national postal corporation which competes with other companies in the postal industry, including the delivery businesses from abroad.

Since China’s accession to the World Trade Organization in 2001, a number of overseas postal delivery giants including UPS, FedEx and DHL have tried to expand their presence in China.

Under traditional mechanism, state-owned post bureaus stand as both a judge and a player, and foreign competitors as well as private companies are disadvantaged.

A senior SPB official told Xinhua that the reform is carried out in line with the demand of China’s economic reform.

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Competition on China-US Cargo Airlines to Get Stiffer

Posted by | Sep 5, 2006 | |

FedEx Express and NWA Cargo, the two world-leading cargo airline carriers, have both obtained permission from the US Department of Transportation to start four additional weekly flights to China, and that signals stiffer competition among cargo carriers flying between China and America, insiders said.

The newly-permitted additions, which go into effect in March 2007, will bring FedEx’s weekly flights to and from China to a total of 30, allowing FedEx to operate more all-cargo flights between China than any other US airline, according to a director for the China operation of FedEx Express.

Meanwhile, the added flights will also help NWA Cargo, Northwest Airlines Corp.’s cargo division, to further expand its freight services between the two countries, and then the carrier’s weekly all-cargo flights will be increased to 14, said a senior executive of NWA Cargo.

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New report: Out-sourcing to be 'defining trend’ in Chinese logistics market

Posted by | Sep 1, 2006 | |

Massive potential exists in the Chinese logistics market for integrated contract logistics companies. This is one of the key findings of a new survey by Transport Intelligence contained in its latest report China Logistics 2006. The survey comprised interviews with over 230 senior professionals representing a cross section of logistics users and providers with operations in China.

According to the survey, 68% of respondents from logistics companies believed that out-sourcing was having a ‘noticeable’ or ‘major’ impact on their businesses. When questioned further 76% of respondents stated that the majority of their out-sourced logistics business was derived from multi-national manufacturers with the remainder being generated by locally based Chinese companies.

Another of the findings of the survey was the extent to which the trend towards out-sourcing could still develop. 48% of respondents indicated that they out-sourced none or just some of their logistics.

Chief Analyst, John Manners-Bell commented: ‘Out-sourcing will be the defining trend behind the growth of the Chinese logistics industry over the coming few years. Our survey has identified that increasing numbers of manufacturers and retailers are looking to out-source to integrated logistics providers due to cost advantages as well as their greater understanding of local markets and regulations. The greatest potential lies with domestic Chinese shippers rather than multinationals which have been amongst the earliest adopters. However competition for this business will be fierce as domestic logistics companies are now increasingly seen as a viable alternative to western and Japanese providers.’

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