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27 March 2017 23:01PM

Asean urged to improve logistics to gear up for more trade

03 Jun 08 ,  Bangkok Post
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LEIPZIG, GERMANY : Thailand should step up collaboration with other Asean members to allow a non-stop flow of goods to cut logistics costs amid high global oil prices, say executives of DHL, the world's top logistics firm.

Scott Price, chief executive of DHL Express Europe and the former head of DHL operations in Asia-Pacific, said goods were taxed and customs-checked at every entry and exit point in Asean.

Consequently, it takes up to 10 days to move goods by rail from Singapore to Vietnam and four days by ship, he said.

''The role of the government is to remove obstacles for logistics and smooth the supply chain to improve logistics efficiency in the region,'' said Mr Price, who was based in Singapore until 2007.

''Efficiency is the thing they need to work out through higher co-operation. [This will] allow freer flows of trade, especially for higher-value goods,'' he said.

DHL's US$20-million express hub has been operating at Bangkok's Suvarnabhumi Airport since July 2006 as its centre for Thailand and Indochina. The site is five times the size of the former hub at Don Mueang.

Chris Bresnahan, former vice-president of hubs and gateways in Asia-Pacific who now heads the European operations, recommended that Thailand simplify regulations and custom procedures to improve logistics.

''Thailand is improving but slowly, with complex procedures,'' he said. ''The operation at the Bangkok hub could be more efficient with fewer paper-based procedures.''

A worker wheels a cart through the huge sorting facility at the DHL hub in Leipzig, Germany.

Mr Price said demand for logistics in Thailand has exceeded the Asia Pacific growth rate by 10%. The region's growth was the highest in the world compared with Europe and the US.

With the economy improving, Mr Price said Thailand was set to to enjoy higher trade with Europe in the near future.

Headquartered in Bonn, DHL has extended its reach to Asia-Pacific to capitalise on higher air cargo growth. Last year it formed AeroLogica, a new cargo airline to offer direct flights to many destinations in Asia from 2009.

AeroLogica, a 50:50 joint venture with Lufthansa Airline, will shorten the running time of shipments to improve service between Europe and Asia _ one of the most active trade lanes in the world, said Charles Graham, DHL's chief executive for global aviation.

The new airline will acquire 11 new Boeing 777s to fly to major airports such as Hong Kong, Singapore, Incheon, Nagoya, China and Taiwan with services starting in the second quarter of 2009.

''We have yet to finalise whether to operate a direct flight to Bangkok or via Singapore,'' said Mr Graham.

The first eight new planes would be delivered by 2010.

''The new airline will improve our transit time between Europe and Asia-Pacific destinations in order to maintain double-digit growth of revenue generated from the Asia-Pacific,'' he said.

John Mullen, chief executive of DHL Express Global, said the company had invested $175 million in the North Asia hub in Shanghai, scheduled to be completed in the second half of 2010.

''Asia is the most important market for us with Southeast Asia growing very well,'' said Mr Mullen.

DHL is the leader in the Asia-Pacific express market with a 38% share followed by FedEx and UPS, he said.