Supply Chain, Logistics, Procurement, Sourcing in Asia, China Articles RSS Feed

BDP signs joint venture with Unique Global Logistics in India

Tue, 09 Mar 2010 13:00:00 GMT

BDP announced recently a joint venture with India's Unique Global Logistics called BDP Global Logistics (India) in which BDP will hold a 65 per cent stake and Unique Global Logistics, 35 per cent.

The investment in this joint venture will be Rs 25 crore. "The investment in this joint venture will be Rs 25 crore and we are aiming for a 25 per cent growth a year over the next five-years," BDP's President and CEO, Richard Bolte, said here.

BDP is one of the world's largest privately-owned transport and logistics companies, with revenues in excess of $1.6-billion and works with some of the world’s largest corporations such as DOW, DuPont, Johnson & Johnson, Marks and Spencer and Revlon.

BDP Global Logistics (India) will be headquartered in Mumbai and has plans to expand its footprint in the country. "We have plans to expand into Chennai, Kolkata and Bangalore," Bolte said, adding the company would adopt the organic growth strategy for the Indian market.

Describing India as a key focus area for BDP over the next decade, Bolte said that the company's target segments here would be chemicals, life-sciences, healthcare, retail, telecom and manufacturing industries.

"As more of the world's largest manufacturers and retailers establish their operations in India, BDP sees an opportunity to contribute to the growing need for specialised logistics services," Bolte said.

BDP has tremendous expertise in the chemical sector and expects to benefit from the sector's growth over the next 10-years, Bolte said.

Unique Global Logistics (UGL), which clocked a turnover of Rs 26-crore in FY 09, "understands the needs of local Indian companies, while BDP offers global reach and experience," Managing Director, Pavithran M Kallada, said.

The company has a strong expertise in the energy sector, including oil and gas besides engineering and chemicals, he said.

"By joining under BDP's banner, we expect to successfully target the growing number of Indian companies doing business overseas as well as multinationals coming to India to do business," Kallada said.

9-Mar-10 9:00 PM

China rural spending inspires retailers' hopes

Donny Kwok — Mon, 08 Mar 2010 19:45:00 GMT

When Dell Inc reported its fourth-quarter results last month, the announcement included a surprising figure -- an 81 percent jump in the PC maker's China sales during the quarter.

Fuelling this result, said the company, were government incentives to spur domestic consumption, particularly in small cities and rural areas.

Dell, which sells its computers in China through retail chains as well as through its direct sales model, is not alone. Competitors ranging from China's Suning and GOME to foreign rivals like Wal-Mart Stores Inc and Best Buy are profiting from Beijing's determination to drive economic growth by boosting spending in the country's $1.8 trillion retail market.

The Chinese government announced recently that it will extend its incentives for rural and small-city consumers, setting off what is likely to be a close competition among retailers that have until now focused mainly on China's big cities.

The opportunity is big. More than two-thirds of China's 1.3 billion people live in rural areas -- roughly three times the entire population of the United States. Retail sales in these areas grew 16 percent to 4 trillion yuan ($589 billion) last year.

Investor optimism about China's stimulus spending has already sent China retail shares soaring. GOME, for one, jumped 180 percent in 2009, outstripping a 52 percent rise in the broader Hong Kong market.

MOVING TO THE COUNTRY

China's domestic electronics retailers are pursuing their new customers aggressively.

Suning, the country's largest electronics chain by market value, said it would use the 3 billion yuan it raised from a share sale to expand sales network and to develop logistics centers. It plans to add 520 new stores in 2010 on the existing network of 941 stores across China.

Rival GOME, with over 700 stores across China, has adopted a "go rural" policy, and plans to team with small local retailers to increase the range of products on offer in a bid to tap rural spending growth.

Foreign retailers are also starting to look outside the tier-one cities. Wal-Mart, the world's biggest retailer, electronics retailer Best Buy and France's Carrefour are all eyeing growth in second and third-tier cities, if not yet rural areas.

Profits from these ventures won't be immediate, however. Suning and GOME probably won't see their new rural stores break even in fewer than five years, said Natalie Zhu, a senior China retail analyst from JLM Pacific Epoch, a Shanghai- and Beijing-based research firm.

And as they move into China's hinterlands, domestic and foreign retailers alike will have to confront entrenched local competitors.

"Individual operators now occupy the majority of the (rural) market," said Zhu. "Even (national) local players have very little market share for the time being, not to mention the foreign operators."

LOCALS DOMINATE

Independent local players, which account for more than 50 percent of the rural market, have advantages including being able to use their familiarity with local spending behavior to adjust their offerings and provide customized product advice to their customers.

"Even domestic players will find it quite difficult to penetrate the true rural areas, because the market, the demand and the customers have very different profiles compared with bigger cities," said Bei Fu, a director of corporate and infrastructure ratings at Standard & Poor's.

Consider televisions. Rural consumers tend to prefer big screen TVs, which confer greater status in their villages while urban shoppers are more focused on quality and brand, according to Zhu.

While national operators like Suning and GOME will struggle to compete with local chains, their wide selection of fast-selling electronics products may give them an edge over foreign players such as Wal-Mart and Carrefour.

When asked recently about flat-screen televisions, a salesman in the small electronics department of a newly opened Carrefour in the second-tier factory town of Dongguan suggested the reporter look elsewhere.

"You can probably get a wider choice of products in the Suning just down the street," he said.

There is another risk in the retailers' rural expansion plans: if China scales back its incentives, rural spending growth could stall, saddling retailers with a costly and unprofitable network of stores.

For now, though, that seems like a distant worry.

"What does China have the most of? Farmers. The rise of this spending group will drive growth of the retail sector," said Lines Yip, strategist of First Shanghai Securities. "Growth is definitely there."

9-Mar-10 3:45 AM

Rail freight charges to be reduced in India

James Lamont — Mon, 08 Mar 2010 19:00:00 GMT

India’s state-owned railways, one of the largest and most profitable networks in the world, will cut freight charges for the transportation of food grains as part of an effort to cool rising food prices.

Mamata Banerjee, the railways minister, who presented the budget to parliament on Wednesday, said freight rates for food grains would be reduced by Rs100 per wagon, while leaving passenger and other freight fares largely unchanged.

Food prices have been rising in India their fastest for more than a decade. The effort to cool prices by the railway ministry is viewed as part of a wider strategy by the government to address a highly sensitive political issue that has in the past toppled administrations.

Indian Railways carries 20m passengers a day and employs 1.4m people. The rail network is one of the few mixed traffic systems, carrying both passengers and freight, in the world that generates a cash surplus. It ranks alongside rail systems in the US and Canada as a cash generator.

However, Ms Bannerjee ruled out any privatisation of the railway system in spite of ambitions plans to add 25,000km of new track in a decade. Instead, she promoted public private partnerships that have been slow to take off in the railway sector as a way to bring in the investment needed to modernise the network.

“Railways will not to be privatised and will remain with the government. While not privatising, railways have to develop business models for improving earnings,” said Ms Banerjee.

Akhileshwar Sahay, the president of the transport division of infrastructure company Feedback Ventures, said the budget was high on intention but low on delivery. He appealed for more clarity over private investment opportunities and was critical of plans to introduce more passenger services.

“More and more passenger trains on a clogged network, which has kept the average speed of express trains to 55-60km and that of goods trains to 25km/h for decades, are expressive of business as usual approach,” he said.

9-Mar-10 3:00 AM

India air cargo still suffering due to lack of infrastructure

Mon, 08 Mar 2010 19:00:00 GMT

Despite expectations of air freight growing 20 per cent in India by 2012, Air India, Kingfisher Xpress and Jet Airways say the business is stalled by a lack of infrastructure and industrial know-how.

Ernst and Young partner Sushi Shyamal said that moves towards ground handling will bring in revenue, but what India needs more is the creation of warehousing and multi-modal links at local level, reports the Hindu's Business Line supplement. The sector also needs "an integrated logistics approach that covers the first mile and last mile connectivity," he said.

Air India's cargo chief Anita Khuran agreed that his division only accounts for five to 10 per cent of revenue and with most capacity in passenger bellyholds and not with its 20 all cargo freighters.

But Frost and Sullivan analyst Chethan Kambhi said capacity is not so much a problem as the sheer infancy of the India air cargo sector, which needs three to four years to mature.

"Entrants like Deccan 360 or Kingfisher Xpress - a door-to-door cargo delivery service - are still trying to understand the real dynamics of the business," said Mr Kambhi.
Foreign investment is also important and more is sorely needed at airports at Chennai, Kolkata, Hyderabad and Bangalore as well as other across the country, he added.

9-Mar-10 3:00 AM

Michelin selects Damco in Vietnam

Mon, 08 Mar 2010 19:00:00 GMT

Damco has been appointed by Michelin to be the French tyre maker's logistics and customs clearance provider in Vietnam.

Under the terms of the three-year contract, Damco will be required to handle Michelin's exports from Thailand into Vietnam, inland transportation, cross-docking and distribution to customers across Vietnam.

Damco will also manage warehouse operations for Michelin in Hanoi and Ho Chi Minh City, where Damco's warehouse is equipped with RF guns and EDI direct interface, a company statement said.

The new logistics set up is expected to enable Michelin to distribute directly to almost 100 dealers in Vietnam.

"We worked hard to understand Michelin's needs and ensure we do everything we can to meet its requirements," said Narin Phol, country manager for Damco in Vietnam and Cambodia.

9-Mar-10 3:00 AM

Lack of facilities in India keeps air cargo stalled

Shubhra Tandon — Mon, 01 Mar 2010 20:00:00 GMT

Lack of infrastructure continues to be a roadblock for the Indian air cargo market, slated by industry estimates to touch Rs 13,300 crore by 2011-12, a growth of 20 per cent.

Earlier this month, Air India had announced its decision to hive off its cargo business into a separate entity by April.

Kingfisher Airlines launched Kingfisher Xpress – a door-to-door cargo delivery service.

There were also reports of Jet Airways being in talks with a foreign logistics company to float a dedicated cargo service.

Yet, the sector struggles for proper cargo warehousing facilities and multi-modal links for local distribution.

Passenger airlines in the country, till recently, did not look at the cargo business seriously. The cargo division contributes only 5-10 per cent of their revenues. According to Ms Anita Khurana, Director, Air India's air cargo division, the country has only about 20 freighters.

Most cargoes are transported through the belly of aircraft.

However, companies are now focusing more on this space, according to industry experts, as they are realising it has a good margin business.

“Though the passenger traffic has started picking up and the yields are improving, the reality still remains that Indian airline companies are sitting on huge losses.

“They need additional means to boost their revenues and that is the reason they are now looking at ground handling, cargo and maintenance,” said Mr Sushi Shyamal, Partner, Transaction Advisory Services, Ernst and Young (E&Y).

Integrated approach

On the recent cargo-related announcements by airline companies, he said these are very “peripheral changes”. What India needs is “an integrated logistics approach that covers the first mile and last mile connectivity.”

In terms of capacity, experts say there is enough in the country.

There is sufficient aircraft belly capacity which if utilised efficiently can make good business opportunity for the airlines, said Mr Chethan Kambhi, Frost and Sullivan's Senior Research Analyst, Aerospace and Defence.

gestation period

“The Indian air cargo industry is still in a gestation period. Entrants like Deccan 360 or players like Kingfisher are still trying to understand the real dynamics of the business,” said Mr Kambhi, adding it will take at least three to four years before it starts picking up.

Other Steps

Other efforts to develop air cargo market in India include the increase of foreign direct investment in cargo and non-scheduled airlines to 74 per cent.

Plans are also on fordeveloping Nagpur as a cargo hub through large-scale investments into MIHAN (Multimodal International Hub Airport) project.

According to E&Y, investments of more than Rs 900 crore have been planned for development and upgrade of cargo terminal facilities at the Mumbai and Delhi international airports.

Similar investments would be required for the facilities at Chennai, Kolkata, Hyderabad, Bangalore and other airports, the consultant said.

2-Mar-10 4:00 AM

Indian logistics market to double this year

Mon, 01 Mar 2010 20:00:00 GMT

Shift in trend from doing purely built-to-suit facilities to building speculative warehouses.

The Logistics market in India has seen a revival both in terms of business and fresh investments over the past year, according to a report by CB Richard Ellis India. The report points out that market is expected to double by 2012 from current levels. The latest report titled 'The India Logistics Market View – 2009' reviews the logistics and warehousing space market in India across key cities.

Commenting on the findings of report, Mr. Anshuman Magazine, Chairman & MD, CB Richard Ellis, South Asia said, “Going forward the main drivers that will fuel this growth are upcoming freight corridor project, building of logistics hubs and warehouses, port development, technology upgradation, investment by private players and also the impending industry status for the logistics sector. We hope to see further movement in 2010.”

The trend is shifting from doing purely built-to-suit facilities to building speculative warehouses, the report said.

2-Mar-10 4:00 AM

China Pharmaceutical unit sets up logistics JV

Mon, 01 Mar 2010 19:00:00 GMT

China Pharmaceutical Group announced recently that its subsidiary, Shijiangzhuang Pharma Group Hebei Zhongrun Pharmaceutical, has entered into an agreement with Shijiangzhuang Pharmaceutical Group Co Ltd on establishing a logistics joint venture.

The JV will have a registered capital of RMB 50 million and will be engaged in logistics services business, including storage, sourcing and distribution of pharmaceutical products, the company said in a statement.

Zhongrun will investment RMB 49.5 million into the JV and will hold a 99% equity interest in it, while SPG will own the remaining 1%.

Founded in 1997, SPG is the No.1 pharmaceutical group in Shijiazhuang, the capital of Hebei Province. It is a wholly-owned subsidiary of MGGL, the controlling shareholder of China Pharmaceutical.

2-Mar-10 3:00 AM

DKSH acquires majority shares of Chiao Tai Logistics Corp.

Mon, 01 Mar 2010 19:00:00 GMT

DKSH, a leader in market expansion services headquartered in Zurich, Switzerland, has acquired a majority of shares in Taiwan's leading logistics company, Chiao Tai Logistics Corp., from Taiwan Tea Corporation, it announced. The transaction is subject to certain conditions, including FIA approval, it said.

In Taiwan, DKSH operates businesses in healthcare, consumer goods and technology. With this acquisition, DKSH will significantly strengthen its position in Taiwan of becoming the leading market expansion services provider for consumer goods, offering a comprehensive package of services tailored to business partners' specific needs for any part of the value chain — from sourcing, research and analysis, marketing and sales to distribution and logistics and after-sales services, it said.

Chiao Tai Logistics Corp. is one of Taiwan's largest logistics companies, with a portfolio of blue-chip clients. With DKSH's well-established operations all across Asia, DKSH provides the ideal platform for the future development of the Chiao Tai operations and will transfer best practices and skills to further strengthen the business, it said.

Chiao Tai Logistics' clients will also be able to harness DKSH's infrastructure in Hong Kong and China to improve supply chain efficiencies, operating as a Greater China unit, or even out-source its sales and marketing functions to DKSH, it said.

“Chiao Tai Logistics is a highly reputable company in Taiwan, working with many clients who are common to our DKSH operations in Asia,” said Joerg Wolle, CEO of DKSH. “This move is an excellent matchup with DKSH's activities and the merger will not only generate synergies with our existing operations, but will transform DKSH into one of the largest full service consumer goods distributors in Taiwan, strengthening DKSH's position as a leading market expansion services company in Greater China.”

2-Mar-10 3:00 AM

Apple admits child labour used at its assembly plants

Malcolm Moore — Mon, 01 Mar 2010 14:00:00 GMT

Apple has said child labour was used at factories where iPods and other electronic items were made Technology multinational Apple has admitted that child labour was used at the factories that build its computers, iPods and mobile phones.

At least 11 15-year-old children were discovered to be working last year in three factories which supply Apple.

Microsoft takes fight to Apple iPhone with new mobile phone servicesThe company did not name the offending factories, or say where they were based, but the majority of its goods are assembled in China.

Apple also has factories working for it in Taiwan, Singapore, the Philippines, Malaysia, Thailand, the Czech Republic and the US.

Apple said the child workers are now no longer being used, or are no longer under-age. "In each of the three facilities, we required a review of all employment records for the year as well as a complete analysis of the hiring process to clarify how under-age people had been able to gain employment," Apple said, in an annual report on its suppliers.

Apple has been repeatedly criticised for using factories that abuse workers and where conditions are poor. Last week, it emerged that 62 workers at a factory that manufactures products for Apple and Nokia had been poisoned by n-hexane, a toxic chemical that can cause muscular degeneration and blur eyesight.

Apple has not commented on the problems at the plant, which is run by Wintek, in the Chinese city of Suzhou.

A spokesman for Wintek said that "almost all" of the affected workers were back at work, but that some remained in hospital. Wintek said n-hexane was commonly used in the technology industry, and that problems had arisen because some areas of the factory were not ventilated properly.

Last year, an employee at Foxconn, the Taiwanese company that is one of Apple's biggest suppliers, committed suicide after being accused of stealing a prototype for the iPhone.

Sun Danyong, 25, was a university graduate working in the logistics department when the prototype went missing. An investigation revealed the factory's security staff had beaten him, and he subsequently jumped to his death from the 12th floor of his apartment building.

Foxconn runs a number of super-factories in the south of China, some of which employ as many as 300,000 workers and form self-contained cities, complete with banks, post offices and basketball courts.

China Labor Watch, a New York-based NGO, accused Foxconn of having an "inhumane and militant" management, which neglects basic human rights. Foxconn's management was not available for comment.

In its report, Apple revealed the sweatshop conditions inside the factories it uses. Apple admitted that at least 55 of the 102 factories were ignoring Apple's rule that staff cannot work more than 60 hours a week.

The technology company's own guidelines are already in breach of China's widely-ignored labour law, which sets out a maximum 49-hour week for workers.

Apple also said that one of its factories had repeatedly falsified its records in order to conceal the fact that it was using child labour and working its staff endlessly.

"When we investigated, we uncovered records and conducted worker interviews that revealed excessive working hours and seven days of continuous work," Apple said, adding that it had terminated all contracts with the factory.

Only 65pc of the factories were paying their staff the correct wages and benefits, and Apple found 24 factories where workers had not even been paid China's minimum wage of around 800 yuan (￡76) a month.

1-Mar-10 10:00 PM

Maersk maybe leaving Kaohsiung for Xiamen

Mon, 22 Feb 2010 18:00:00 GMT

Moller-Maersk is believed to be scrapping its services to Taiwan and moving to Xiamen across the strait, a move that has prompted 200 Kaohsiung dockers to strike, demanding severance pay, reports Deutsche Presse Argentur.

According to the media reports Maersk has not yet confirmed the story, but talks between the stevedores and Maersk's Taiwan manager broke down after the shipping line refused severance pay on the grounds that dockers are hired by another company, which would be responsible for severance pay if any.

"We have worked for Maersk for many years and never got a pay raise. Now Maersk is leaving and does not want to give us severance pay. That is too cruel," said Chen Hsien-tsung, head of the dockers association, reported Taiwan's Central News Agency report.

The DPA report in the Liberty Times said Maersk last year stopped the lease on two of its four container terminals at Kaohsiung Port and would not renew the lease for the two remaining terminals when it expires. The reason being is the carrier aims to increase its investment in mainland's Port of Xiamen.

Ranked the world's third busiest container port in the 1980s, Taiwan's largest port has seen its container throughput decline from 10.3 million TEU in 2007 to 8.5 million TEU in 2009. Kaohsiung's demise in recent years has been blamed on the expansion of neighbouring ports, particularly those across the Taiwan Strait on the mainland.

23-Feb-10 2:00 AM

China Post Logistics selects RedPrairie WMS

Mon, 22 Feb 2010 18:00:00 GMT

RedPrairie announced Guangxi China Post Logistics has selected RedPrairie’s Warehouse Management solution to direct operations in its 8,000 square meter distribution center in Guangxi. Guangxi China Post hopes to use RedPrairie’s solution to improve its DC’s efficiency and inventory accuracy.

“We selected RedPrairie based on their solution’s track record and reliability,” says Ziyang Huang, Deputy General Manager, Guangxi Post Express Delivery & Logistics Co. “The service-oriented architecture is flexible, the user interface makes it easy to operate, and overall functionality is robust. As a whole, we hope the solution will allow us to provide better logistics service for our customers.”

Guangxi China Post was particularly interested in managing inventory at a granular level, with visibility into individual serial numbers. The company also cited access control and global capabilities as core purchasing criteria for their selection of RedPrairie’s Warehouse Management solution.

“China Post Logistics company is considered by many to be one of the top three logistics companies in China,” says Rod Talbot, RedPrairie EVP & Managing Director Asia Pacific. “The cooperation their company and others like it demonstrate has resulted in a greater degree of strength and depth between RedPrairie and its customers. We intend for this project to illustrate our continuing commitment to the Chinese region, and international business as a whole.”

23-Feb-10 2:00 AM

Shanghai bans DG shipments during Expo

Mon, 22 Feb 2010 18:00:00 GMT

APL, the container shipping arm of Singapore's NOL, is warning that the Shanghai Maritime Safety Authority (SMSA) has imposed restrictions on certain dangerous goods shipments during the World Exposition 2010 Shanghai.

The world's fair will be held from May 1 to October 31 and is expected to draw a crowd of 70 million.
The carrier announced that from April 15 to November 15 all port terminals located in the middle and upstream parts of the Huangpu River are prohibited from handling dangerous cargo.

In addition, all port terminals, except for Yangshan terminals, will be prohibited from handling dangerous cargo From April 30 to October 31.

Furthermore, the export of fireworks at Wai Gao Qiao (WGQ) terminals will require local authority's approval on a per voyage basis.

APL recommended that its customers "exercise caution when accepting prohibited dangerous cargo as there is no recourse when the vessel arrives between the prohibited periods."

23-Feb-10 2:00 AM

Logistics Cost Is 6.2 Per Cent of India's GDP: Frost & Sullivan

Mon, 22 Feb 2010 18:00:00 GMT

India's ascending fortunes in the manufacturing sector over the last few years has opened several windows of opportunities for the logistics market, and this trend is likely to gain pace as the wave of global economic slowdown is gradually receding and India emerging as one of the earliest major economies to recover from recession. This fast-paced growth of the industrial sector, coupled with the more sturdy progress of the agricultural sector, has necessitated extensive supply chains across the country to facilitate sourcing and distribution of production.

Strategic Analysis of Indian Logistics Market, finds that the market earned revenues of $75.19 billion in 2009, representing about 6.2 percent of the country's GDP. The market is expected to reach $120.42 billion in 2014, witnessing a CAGR of 9.9 percent between 2009 and 2014. Transportation segment accounts for close to 62.0 percent of the total market reiterating the fact that it is the most important logistics function for all industries. Further, agricultural sector accounts for slightly over half of the total logistics market in India, owing to the extensive storage and transportation activities associated with agro products within the country.

"Apart from the steady expansion of operations by large domestic industrial groups, an increasing number of global majors in industries ranging from automotive and electronics to pharmaceuticals and cement have been targeting a spot in the highly lucrative Indian market," says Frost & Sullivan Industry Analyst Srinath Manda. "While foreign companies need to engage logistics service providers since they are not conversant with the culture, government policies, or distribution landscape of the country, domestic companies are outsourcing their logistic activities to organized third-party logistics (3PLs) to focus on their core competencies."

Most manufacturing industries such as automotive, cement, minerals, oil & gas, pharma, food processing, and fast moving consumer goods (FMCG) need multimodal transportation services as they have a widespread consumer base but limited production bases. Industries such as FMCG, pharma, and food processing apart from the agricultural sector also have considerable requirements for integrated logistics parks owing to their higher need for warehousing activity. These industries are the leading contributors in the 25.7 percent share accounted by warehousing segment within the total Indian logistics market.

Multimodal transportation solutions are becoming possible with the development of inter-connected transportation infrastructure facilities, especially dedicated freight corridors by the railways and improvements in coastal shipping facilities. Similarly, the construction of massive state-of-the-art logistics parks at key distribution hubs are helping to meet the specialized warehousing needs of industries. These developments are encouraging companies to increasingly outsource logistics functions.

Both manufacturers and logistics companies are hampered by the problem of poor infrastructure connectivity in rural areas. The hardest hit by the inadequate transport connectivity are likely to be the FMCG, food processing, pharmaceuticals, and consumer durables industries, which have a huge potential consumer base in these areas. The former two industries are also affected on the sourcing side since they are highly dependent on the raw materials sourced from rural areas.

"Apart from the development of dedicated railway freight corridors, focused development of inland waterways and the strengthening of road networks through the national highway development program are expected to improve the market reach of most industries," notes Srinath. "Owing to these efforts, professional logistics services can be extended up to rural areas, leading to a higher scale of logistics activities outsourcing."

23-Feb-10 2:00 AM

Kerry Logistics won Daimler contract

Mon, 22 Feb 2010 16:00:00 GMT

Kerry Logistics has landed a number of major contract deals with the most recent being Daimler Northeast Asia Parts Trading and Services Co Ltd (DPTS) selecting Kerry Logistics in the first quarter of 2010 to manage the licence attainment of its imported spare automobile parts in China.

Under the terms of the two-year contract, Kerry Logistics is responsible for obtaining all required licences for spare parts and batteries, exemption certificates for parts, as well as inspection certificates, tariff return filing, and foreign exchange verification for returned cargo and export, reports the UK's Transport Logistics.

It noted that as a wholly-owned subsidiary of Daimler Northeast Asia Ltd, DPTS is responsible for spare parts logistics for all Daimler products in mainland China, including Mercedes-Benz cars.

Earlier in the fourth quarter of 2009, Kerry Logistics landed a new contract in Hong Kong from Swedish tissue and toilet paper manufacturer Tempo. The two-year contract comprises warehousing, distribution, value-added services, such as kitting of promotional items, and cross-border haulage of its fast moving consumer goods (FMCG products).

Also in the fourth quarter, Dow Chemicals appointed Kerry Logistics as its major logistics service provider for its newly acquired company, Rohm and Haas Electronics Materials, in Hong Kong on a two-year contract basis.

Kerry Logistics is tasked with providing local warehousing and value-added services such as labelling, sample drawing and distribution to Dow Chemicals' customers in Hong Kong and mainland China, the report said.

23-Feb-10 0:00 AM

Ryder setup JV with Cargo Services

Mon, 22 Feb 2010 16:00:00 GMT

Ryder System has established a joint venture with Cargo Services Far East Limited (CSFE), an Asia-based logistics solutions provider specializing in export consolidation services, to offer end-to-end logistics services to North American companies importing goods from Asia.

“This partnership gives us an extensive network throughout Asia and builds on our purchase order management and export consolidation capabilities to deliver seamless international solutions to the retail marketplace,” said John Williford, president of Ryder’s global supply chain solutions division.

“The partnership … helps retailers and other U.S. importers design, plan and manage their product flows from factories in Asia to retail stores across North America,” he added.

Operating as Ryder Supply Chain Solutions Asia, the jv will provide vendor and purchase order management, inland transport services, export consolidation and order fulfillment services, including distribution center bypass and store-ready pallet construction from Asia to North America.

The partnership will also build on Ryder’s recent acquisition of CRSA Logistics, which manages Trans-Pacific end-to-end transportation management and supply chain services for Canadian retailers, including consolidation services in key Asian hubs and deconsolidation operations in Canada.

“Users of these services require a personalized and attentive international supply chain for the execution of their purchase orders placed in China and the rest of Asia and the movement of their products to destinations in North America,” said John Lau, CSFE’s group managing, who also founded the company back in 1990.

“Together, we can leverage each other’s logistics capabilities and expertise to offer a better solution to retailers and traders of consumer products,” he said.

23-Feb-10 0:00 AM

Labor shortages possible in Guangdong area

Mon, 22 Feb 2010 15:00:00 GMT

A leading Taiwanese laptop maker has warned labor shortages in China's booming coastal cities could affect the supply of computers amid an expected surge in world demand.

Ray Chen, president of Compal Electronics Inc., said the labor situation could also lead to shortages of components ranging from memory chips to hard drives to computer cases, the Economic Daily News quoted him as saying Thursday.

He said the labor shortfall could worsen following this week's Lunar New Year holiday because many factory workers visiting their home towns might not return to the major coastal manufacturing zones where Compal and other electronics companies produce personal computers.

A year ago when the global financial crisis was battering China's exporters, millions of migrants were told to stay home because there wouldn't be much work in Guangzhou and other southern cities. Then, as business started picking up during the middle of last year, factories were caught short-handed.

Many businesses now say they expect labor shortages this year to be worse than previous episodes. Migrants are finding jobs closer to home as the poor interior provinces become more prosperous and the supply of young laborers is decreasing as an effect of China's one-child policy. Fewer, meanwhile, are willing to work for sweatshop wages as their parents did.

The Economic Daily newspaper said many factory operators fear their worker numbers will not return to pre-financial meltdown levels despite offering pay raises. But an official with Taiwan-based Hon Hai Group, the world's largest contract electronics maker, said it would not be affected by the labor shortages. It started building several factories three years ago in China's interior to comply with Beijing's policy of developing the southwest.

With manufacturing being shifted elsewhere, Hon Hai's base in Shenzhen in Guangdong province now deals mainly with research and development and logistics, according to the official, who requested anonymity because of company policy.

Compal and Taiwan-based Quanta Inc. are the world's top two contract laptop makers. Compal's 2009 sales amounted to $19.8 billion, up nearly 50 percent from 2008, with the launch of Microsoft Windows 7 operating system and low-priced laptops known as netbooks propping up sales amid the global economic recovery. Taiwanese makers account for more than 80 percent of the world's laptop output by setting up assembly lines in China to take advantage of the mainland's cheaper labor.

Several Taiwanese makers, including Quanta Inc. and Inventec Corp., are building factories in Chongqing in southwest China, where labor costs are estimated to be 20 to 40 percent lower than the coastal cities.

22-Feb-10 11:00 PM

New Logistics Warehousing Map Launched in China

Max Henry — Sun, 21 Feb 2010 21:00:00 GMT

The Council recently announced the launch of our new China Logistics Warehousing Map.

Featuring key warehouses and distribution centers in China, this map will be both useful, informational and engaging for manufacturers, retailers and 3PLs operating in China.

Warehouse developers, owners and agent are now able to feature their facilities through this digital map, show prospective logistics services buyers detailed information of the facility, and explain where one property is in relation to highways, ports and other key logistics infrastructure.

And with the ability to show detailed information, photos of the facilities, add comments, display interactive media (coming soon), this map is truly unique in its format.

Available both on the web, in magazine and as a poster (sponsor required), this map is already promoted to the Council's 60,000+ community of manufacturers, retailers and 3PLs all over the world.

To view the online map, click on: http://www.supplychains.com/map/

To preview the double page spread in the next issue of CHaINA Magazine, click on:
http://www.supplychains.com/attachments/files/3894/China%20Warehousing%20Map%20-%20Magazine%20Spread.pdf

Interested to sponsor the China Warehousing Map? Contact me directly to understand how this various formats of the map can become an ideal marketing channel to demonstrate your leadership in logistics real estate and showcase your latest facilities in China.

For more information, contact us at map@supplychain.cn

22-Feb-10 5:00 AM

Capgemini Global Trade Flow Index reveals that trade levels are picking up across the globe

Roy Lenders — Fri, 19 Feb 2010 13:00:00 GMT

The latest trade figures from the 23 largest trade countries globally (from Q3 2009) are revealing that trade levels have picked up dramatically from Q2 towards Q3 2009. As trade levels are a good leading indicator for the country economies as a whole, we will see GDP levels start growing from Q1 2010 onwards.

Where in Q2 2009 global trade was primarily driven by local market growth in the emerging countries, driven by big government stimulus programs in the BRIC countries, during Q3 2009 the big developed economies picked up steam again and were driving significant expansion of global trade. The big question for the next two quarters will be whether we indeed have reached a turning point where the emerging countries will be driving global economic growth (where the power is moving from West to East) or whether the old economic rules will drive the market again where the growth in the emerging countries is primarily driven by the export growth towards the big developed countries.

Also the timing of the ending of government stimulus plans will be key for the growth in the next two quarters. As many governments are eagerly awaiting to cut their cost levels to get their government finances back-in-order, the timing of these cost cuts will need to be very precise so as not to disturb the current growth in the global economy.

19-Feb-10 9:00 PM

DP World terminal opens in Saigon

Thu, 11 Feb 2010 14:30:00 GMT

Dubai-based global marine terminal operator, DP World has announced the inauguration of its Saigon Premier Container Terminal (SPCT) in Ho Chi Minh City, Vietnam.

Additional dredging a depth of 12m is planned for the near future, when SPCT will be able to handle vessels up to 8000 TEU, further reducing logistical cost for Vietnamese exporters and importers. Currently, five shipping lines have multiple weekly calls at the new facility.

11-Feb-10 10:30 PM