“In order to tap these (emerging market) opportunities, service providers need local innovation and high calibre management expertise,” he said in his presentation.
He pointed out that as the emerging China economy was slowing down, the government had unveiled a US$586 billion stimulus package to revive the country and therefore, the mainland domestic market is expected to be a new source of growth.
Another similar larger emerging economy, India also offered opportunities as it had a fast growing middle class, he said, adding that low value manufacturing industries were relocating to smaller markets to take advantage of lower labourand land costs.
Redesigning networks
Sundarrajan Bhyravan, Regional Logistics Manager, Asia AMET Logistics Excellence Team at Unilever, who was speaking on the topic “Distribution strategies in Asia Pacific”, said his company worked with third party logistics providers (3PLs) to lower costs using external benchmarks.
“Through dynamic design and execution of distribution networks, we customize the network for our customers,” he said, adding that his company worked with 3PLs through collaboration and transparency.
From experience, Unilever was able to improve productivity and cut costs by 25 per cent in some cases, he added. Bhyravan said one of the main distribution challenges was how to deal with customs as the customs in every country differed in their dealings with businesses.
Speaking on “Aligning logistics infrastructure with supply chains”, Jurgen Rogner, DB Mobility Logistics AG’s vicepresident business development China, said while the industry was constantlylooking for ways to lower costs, a project on the horizon is a railway infrastructure jointventure project between three parties.
The parties, which include DB Mobility Logistics, China Railway and the Russian Railway, have initiated the project which is almost completed and has just a few more steps to go before it is finalised.
The service called the Trans Eurasia Express will operate one train service per week, and will take 19 days door to door between China and Europe. The service will also include armed guards on the CIS route, with Global Positioning Service to track and pin-point the exact location of the train at any particular time.
Rogner said the rail link transportation, which would cost shippers 25 per cent of airfreight costs, would also have a low carbon footprint.
The cost was arrived at by comparing the high airfreight cost for transporting goods between Shanghai and Hungary, and the much cheaper rail transport cost per kilogram of cargo versus the carbon dioxide released by air transport between the two destinations.
Integration and innovation
James Chen, regional trade and transportation manager for Nike in the Asia Pacific region, who also spoke at the conference, said his company studied the use of different modes of transport and consolidation of facilities to lower costs as well as their reliability.
“We look at reliable options,” he said, adding that Nike always looked for the right model of transport, and depending on the volume would make a decision on whether to use air or sea transport.
“If it is 50-60 tonnes, we would move them from airfreight to sea freight, and this was the best choice we had when the Bangkok Suvarnabhumi airport was recently under siege by anti-government protesters,” he added.
Peter Knapp, vice president for Contract Logistics at APL Logistics, said with globalisation, there was a need for greater integration, a need for end to end service as well as a need for visibility.
He pointed out that outsourcing needed speed, optimisation and lower costs, and regarding supply chain integration, there was a need for sustainability and reliability plus a need for expertise to achieve consistency.
Knapp said APL Logistics applied dynamic routing to its services, which meant that the company would only make the route decision at the last minute.
The last minute decision making move was to develop optimisation and sustainable supply chain management, which required visibility as well as having the right information in place, he added. Knapp contended that customers who required less-than-container-load (lcl) services could send their goods by airfreight. APL Logistics organised these less-than-container-load services on a weekly departure basis for multi-customers who wanted to send their goods to Europe, he added.
There is no one size fits all solution for customers and therefore logistics service providers had to be innovative and also be integrators, Knapp said, adding that they should also collaborate with all othersupply chain stakeholders.