Forwarder and logistics provider Schenker International (HK) has established a new logistics facility for its customers at Asia Terminals in Kwai Chung. The 30,000 square feet facility could be expanded to 100,000 square feet as demand increased, said Schenker logistics manager, Jochen Rasp. 'Next year, we will need more space of between 120,000 to 150,000 square feet,' he said, adding that business was expected to grow steadily over the next few years. Schenker's facility had been designed to cater for the specific needs of customers, he said, adding that the space and service requirements of companies varied. One may need the space for big pallets, while another may need space for only pick and pack of small items. Whether cargo was moved by air or sea, the important thing was to guarantee service in the cargo flow, Mr Rasp said. Schenker's general manager for sales and marketing Jochen Krug said most of the cargo handled by Schenker in Hong Kong came mainly from China. Asked about the impact of China's entry into the World Trade Organisation (WTO) on Schenker, Mr Krug said he was confident the company's Hong Kong business would grow, even though direct trade between China and other nations would also increase. Over the last two years, more companies had accepted the logistics concept and had passed on complete responsibility of transportation and logistics tasks to third party logistics providers, Mr Krug said. Asked about the proportion of exports to imports, Mr Rasp said Schenker's logistics business was balanced and involved an equal proportion of exports to imports. He said Schenker provided services that could help the client have a shorter lead time for production and shorter delivery time. For example, a company with production facilities in Europe, that wanted to enter the Asian market without setting up its own warehouse, could easily do so through a third party logistics provider, he added. Asked why companies turned to logistics providers, Mr Rasp said they can help reduce costs and earn higher profits by outsourcing their non-core business. As a result, they could sell their goods cheaper and give a better price to customers, besides improving their competitiveness, he said. Sometimes there might not be cost savings, but using third party logistics providers might simply improve their systems and allow them to be present in the market, he added. Schenker's business had been very good in general this year, he said, and the company expected the business to consolidate on a global scale next year, if the US does not grow as strongly as it had this year, including the US- Europe trade. For Schenker, the business would continually grow with higher growth in the logistics area as more companies outsourced their internal services. However, the China market was expected to do well next year and would continue to grow strongly. Mr Rasp said Hong Kong would continue to grow strongly as it had quality advantage over the mainland, besides its geographical location. Mr Krug said the Government should provide land cheaply to help forwarders establish logistics centres as ATL, Hong Kong International Development Centre and Modern Terminals were full and were not really the solutions needed for logistics activity.
