Operator defies global woes with aggressive strategy

PUBLISHED : Friday, 26 September, 2008, 12:00am
UPDATED : Friday, 26 September, 2008, 12:00am

No company in the logistics sector could reasonably hope to escape the effects, both direct and indirect, of the triple whammy which hit in the past 12 months. They were faced with the fallout from the subprime crisis in the United States, the rising cost of oil and other commodities, and softening consumer spending, all of which contributed to slower general market growth and a struggle for profitability.

However, even in hard times, some operators have a habit of defying the odds. They perform that time-honoured trick of turning challenge into opportunity, they trim their sails as necessary and, somehow, still manage to turn in successive quarters of strong financial results.

'In times of economic uncertainty, efficient supply chain processes are more crucial than ever,' said Andy Weber, managing director of Kuehne + Nagel (Asia-Pacific) Management. 'Aggressive selling, coupled with solutions offering excellent visibility and the continuous review of buying conditions will serve us well in meeting the changing market demand.' Mr Weber expressed confidence that the company's global presence and flexible structures would make it possible to maximise whatever growth opportunities came about.

'[But we] will also intensify efforts to improve internal processes and optimise cost management,' he said.

Specifically on the airfreight side, he noted that the grounding of non-economical aircraft, combined with delays in the deliveries of new aircraft, might create short-term capacity problems. However, looking ahead to next year, there was good reason to think these difficulties would be ironed out, and that the hi-tech, pharmaceutical, electronics and health care industries would still perform well.

In the meantime, the company is planning various initiatives for the next few months. They include strengthening the focus on origin logistics and vendor management by enhancing pick-and-pack sorting, inventory control and order management at line or even item level.

Besides that, the company will have additional airfreight services directly to and from airports in southern China and make greater use of charter operations to contend with what are forecast to be larger airfreight volumes during future peak seasons.

To provide support, a new office will be opened in Dongguan once administrative details are finalised. That will bring the grand total of company offices in southern China to 18, including five in Hong Kong and one in Macau.

'All in all, we will continue our focus on providing IT-based integrated logistics and offering industry-specific solutions for all 'verticals', especially in the hi-tech, FMCG [fast-moving consumer goods] and retail sectors,' Mr Weber said. 'Our objective is always to stay close to our customers.'




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