How effective is your company at being a truly regional company in terms of offering services across Asia?
Agility can boast close to 8,000 employees in Asia Pacific in 24 countries, close to 180 offices and 900,000 sq m of warehousing.
In recent years Agility has made significant investments in the China and India markets to build distribution networks, while in southeast Asia our cross-border road network is providing opportunities for its customers to access markets in Vietnam, Cambodia, Laos, Thailand and into southwest China.
“These emerging trade channels are supporting the development of new opportunities,” says Jens Wessel, svp of sales and marketing for Agility in Asia Pacific. Agility has also recently opened up an office in Myanmar.
“Emerging markets are our enduring focus,” says Wessel, “but we have also made significant gains in other areas, including in the chemicals and resources logistics sector worldwide, which will continue through 2012.”
“In order for Asia to remain competitive,” suggest Wessel, “our customers are looking for labour arbitrage to be complemented by productivity.”
Quite so, agrees Weiss Rohlig’s managing director Holger Stoelker. “Our core values for this are speed, flexibility and efficiency and also to be distinctive. We believe here in flat management hierarchies and quick decisions,” he says.
Stoelker maintains that the market has changed to quick transactional decisions required by the service provider.
“With our network coverage of the major markets across Asia, we can cover all important trades,” he says.
In 2008, Barloworld Logistics acquired a small freight forwarding company to understand the market. The company that it bought had been operating in the region for the last three decades and offers services not only in Asia but also globally. The entire workforce is Chinese speaking with an extensive knowledge of local markets.
“There is no doubt that we are capable of offering effective services across Asia,” says William Tang, MD of Barloworld Logistics, Far East.
“Clients are extremely price-sensitive particularly the small and medium sized companies. The larger companies expect prices to be fixed for 12 months for both air and sea freight. With the current market conditions it is difficult to deliver at the level the client expects for the transport costs they offer,” he says.
“Our vision,” he continues, “is to provide smart supply chain solutions through strategic partnerships with leading clients and key suppliers.” Integrated supply chain solutions include warehousing and distribution, dedicated transport services, transportation management services, freight forwarding, and supply chain software.
Traditionally Barloworld has only focused on freight forwarding, but it is now in a position to offer end-to-end supply chain solutions from network design and S&OP planning to final mile delivery to point of consumption.
“The future belongs to supply chains and the more agile and faster the supply chain, the more competitive is the brand,” maintains Tang.
“With the strongest distribution network across Greater China and the ASEAN markets, plus the region’s most extensive hub operations, we are serving tens of thousands of outlets every day. We have the reliability and flexibility to support our customers’ growth anywhere in Asia,” says a spokesperson for Kerry Logistics.
What are your customers asking for in the current economic climate?
The source at Kerry Logistics says customers are asking for a cheaper form of transport, which leads to a move away from air towards sea freight or road express and minimising overall cost in the entire supply chains as a result of the drop of export and cargo volumes.
Customers are indeed focusing more on improving their operational efficiency and reducing costs across the supply chain to stay in the race, concurs Barloworld’s Tang. Suppliers’ margins are down to the “bare minimum”, he says, and suppliers are hardly in a position to bring meaningful savings.
“If you look at the logistics industry the number of acquisitions, mergers and closures in that market is a testimony to the real pressure under which companies are operating,” Tang says. “The real savings are not in squeezing suppliers for a few percentage points of savings but by stepping back, taking a holistic view of the entire supply chain, thinking innovatively and looking for synergies.”
With freight rates being unstable, Agility says some of its customers are looking to manage their risk through competitive rates and consistency with the current uncertainty in the market.
“Customers are increasingly asking for flexibility, both in terms of product and solutions, but also in terms of geographies,” says Agility’s Wessel.
What are your medium term business plans?
Kerry’s spokesperson says the Robert Kuok-controlled firm is on the look out for possible mergers and acquisitions to strengthen local and regional capabilities. Kerry is also opening a new green logistics centre at the end of this year in Singapore.
As per supplychainforesight’s recent survey, China invests currently 33% of its total outbound investments for Africa on infrastructure development. Other main investment flows involve the mining sector (40.74%), business services (21.58%) and finance (16.4%). There is more trade likely to take place between China and Africa. As an African supply chain management company, Barloworld sees a bright future in this tradelane.
“Our immediate plans are to offer reliable logistics and freight forwarding solutions to the Chinese companies doing business with Africa,” says Tang.
What human resource issues do you have in Asia?
“The rapid pace of development in China, size of the economy, vast terrain, increasing complexities in the supply chain have also resulted in a shortfall of skilled logistics professionals,” admits Barloworld’s Tang.
This is not just a China issue, however. “Finding and keeping talent is an industry wide issue in Asia and we have embarked on an in-house programme across the region to identify and nurture talent through our management training programme,” says Agility’s Wessel. It is a continuous learning process that allows young logistics professionals to develop and learn in a fast changing industry.
Echoing these comments is the source from Agility who says, “Finding the right talents to support our continual growth in the region is a challenge. Hence, we have launched a comprehensive management trainee program since 2011 to recruit young talents around the world and equip them with all-rounded training. Many of them are senior managers in the group overseeing regional businesses today.”
“The main issue here is to find talented people,” says Weiss Rohlig’s Stoelker. “At the current stage it is very difficult to interest people for our industry. The challenge here is to find middle management staff. Our approach is to train and build up our own staff and try to retain them.”