Mainland looks at Danish system

PUBLISHED : Monday, 06 April, 1998, 12:00am
UPDATED : Monday, 06 April, 1998, 12:00am

A mainland delegation will visit Denmark soon to study its system of centralised distribution, Distribution Council Denmark's vice-president Klaus-Peter Lange says.

He said the council, a non-profit organisation for promoting Denmark as an efficient and cost-saving European gateway, also would send a team to the mainland this summer to market and provide information about its distribution activities.

Though relations between the two countries were strained last year over Denmark's remarks about China's human rights record, they had improved, Mr Lange said.

The mainland delegation would study how Denmark dealt with distribution issues and the criteria involved.

While many mainland companies were shipping goods to Denmark via Hong Kong, Mr Lange did not know exactly how many.

He said centralised distribution was more than 20 per cent more cost-efficient than multiple distribution, as companies could save by reducing inventories.

However, companies could have a corresponding rise in transport costs as longer distances might have to be covered to deliver a product, he said.

'Cost efficiency is achieved in many ways by consolidating distribution into one centre in Denmark,' Mr Lange said, adding that a manufacturer could have less warehouse space, reduce operating costs in terms of personnel, inventory and handling, and have efficient lines of communication.

The centre also would enable manufacturers to respond faster to market changes, turn over smaller inventory more rapidly, reduce the risk of obsolete inventory for specific markets and customise control for a whole region at one location.

Denmark's centralised distribution, which was a hub for Scandinavia and the Baltic region, was supported by efficient air and sea services.

Mr Lange said Denmark's Copenhagen airport handled 336,000 tonnes of cargo last year. The airport, which was a hub for northern Europe, was being upgraded with a US$1 billion investment to make it truly multi-modal.

Under the airport expansion plan, the authorities planned to build a cargo village, and supporting cargo apron and terminals.

There were now three cargo terminals at Copenhagen airport.

Mr Lange said the airport provided one-hour close out acceptance of cargo before take-off, two-hour cargo availability after landing and three hours transshipment time.

Ninety-two per cent of all cargo was cleared while still in the air and released to customers at the airport.

Mr Lange said while Copenhagen airport cleared cargo within three hours, larger airports like Frankfurt and London took about 10 hours, Amsterdam took six and Brussels eight, because they handled large volumes of traffic.

The shorter transit time at Copenhagen enabled cargo to be trucked to destinations faster than from other airports, he said.

Stephen Ho, representative for Hong Kong-based freight forwarder Worldtrans Air-Sea Service, said Denmark's trucking services were much cheaper than those in other parts of Europe.

He said his company, through Samson Transport, could deliver cargo from a Danish distribution centre by truck to Hamburg in two hours, Amsterdam in seven, Brussels in nine, Frankfurt in eight and Paris in 14.