Gaining foothold in regional forwarding and delivery markets
Gaining foothold in regional forwarding and delivery markets
Sudibyo M. Wiradji, Contributor, Jakarta
Despite the lingering economic crisis in several member
countries of the Association of Southeast Asian Nations (ASEAN),
providers of freight forwarding and delivery-related services are
racing to strengthen their presence in the region.
International and domestic players are optimistic the free
trade agreement within ASEAN will bring in new impetus in
accelerating trade activities between the 10 member-countries.
With at least half of the world's trade expected to come from
Asia over the next ten years, players believe that the trade
accord, officially known as the ASEAN Free Trade Area (AFTA),
will turn the region into one of the world's important export
hubs.
PT Danzas Saranaperkasa, a subsidiary of Switzerland-based
Danzas Group, for instance, will undertake more investment to
expand its network in Indonesia, which is now struggling to
escape its worst-ever economic crisis.
"Indonesia now has improved. We don't have to wait too long.
There are still lots of opportunities," said PT Danzas
Saranaperkasa's Technical Adviser Chris Remund.
Several others, such as Federal Express (FedEx) and United
Parcel Service (UPS) have started their delivery-related
businesses ahead of others. They have spent millions and even
billions of US dollars on building infrastructure, facilities and
networks in the region.
FedEx has established Logistics Distribution Centers (LDCs) in
eight countries across Asia, four in Japan, two each in South
Korea and Singapore, and one each in China, Hong Kong, Taiwan,
Malaysia and the Philippines. Its LDC in Subic Bay, the
Philippines, started operations in 1996. Each LDC handles
inventory management and distribution services for high turnover,
fast-moving, smaller volume and high-value items.
"LDCs provide solutions and meet the needs of many types of
companies, particularly high-value electronics manufacturers and
distributors," said FedEx Managing Director for Singapore and
Indonesia Clifton Chua.
Earlier this year United Parcel Service (UPS) invested in
excess of US$300 million in facilities and infrastructure in the
Philippines to make the company's operation in the country its
intra-Asia hub.
"The services and capabilities provided for Southeast Asia are
already assisting businesses in this part of the world to become
more export-competitive, get goods faster to market and compete
in the global market place," said PT UPS Cardig International
Technical Advisor for Sales Neil Bond.
He said that UPS spent in excess of US$1 billion each year on
technology and providing world leading-edge IT solutions. "Being
fast is important, but customers want information and simplicity,
not just speed," he said.
DHL has been servicing all these countries (ASEAN) for many
years and "already has a comprehensive service. What we do in
most ASEAN countries is quite closely aligned," said DHL
Indonesia's Technical Adviser Alan Cassels.
According to Cassels, the major advantage will come if or when
the ASEAN area becomes truly duty-free (like the European Union)
and thus "the 10 countries become one big 'domestic' market."
TNT is also expanding its logistics networks in the Asian
region, particularly Indonesia and Thailand, where the company
has established an integrated program for serving clients in the
two countries.
"TNT, for example, helps Procter & Gamble in Thailand to
procure raw material and send the final products to Indonesia,"
said PT TNT Logistics Indonesia's Marketing Service Manager
Safitri Damayanti.
The tasks handled by delivery and distribution companies
include inventory, packaging, warehousing and distribution.
Danzas has provided customers with sea- and air-freight
services, targeting companies engaged in export and import
activities. As in other countries, Danzas's experts offer
logistics solutions that best suit customers' needs. Its Solution
Business Unit optimizes the entire supply chain by ideally
aligning inbound logistics.
PT Repex Perdana International is in the middle of building an
integrated one-stop logistics solution. "This means that
customers really only have to stop at RPX One-Stop Logistics for
whatever their delivery needs," said RPX Group's Marketing
Manager Desy A. Wibowo.
To anticipate tighter competition in the delivery and
distribution business in the near future, PT Repex Perdana
International is currently in the middle of conducting "RPX 100
network" projects throughout Indonesia, expected to be completed
by the end of this year. "On top of that, we are also upgrading
our services and infrastructure as well as upgrading our IT
System to be more effective and user-friendly," Desy said.
The international delivery and express business providers also
are making extra efforts to gain a foothold in the regional
express market.
DHL said it would continue to provide the best service and
show flexibility to meet customers' requirements. "For instance,
we are not restricted to using one craft per day. By using
commercial flights, we can move packages more rapidly to and from
all parts of Indonesia to or from 229 countries around the
world," said Cassels of DHL.
Like DHL, TNT is also improving delivery times to the rest of
the world. "We are now delivering to 24 major European cities
next day, which no one else is doing in the market," TNT
Indonesia's Country General Manager Colin Moran said.