When the dotcom craze reached its zenith in Hong Kong late last year, it was not uncommon to see traditional property companies attempting to add a little sex appeal to their stock price by announcing alliances with new Internet ventures. Those strategic alliances often included recently formed e-logistics services, as property companies sought to leverage the synergies between their existing array of businesses involving warehousing, transportation and storage. Now that numerous high-flying e-business ventures have been quietly shelved, or laid to rest in the dotcom graveyard, the long-term players with vision and financial strength are coming to the forefront of the logistics business in the Internet era. Among the emerging power players are Kerry Logistics Networks, which has undergone a rapid restructuring in the last three years to transform itself from a warehouse and transport operator to a one-stop Pan-Asian logistics provider. Max Jones, the group's director, said instead of just hopping on to the e-logistics bandwagon last year, the company has been acquiring key physical assets and building its e-fulfilment services in an ongoing strategy. 'We've been successfully building the real world bricks- and-mortar side of logistics, and combining it with information technology,' Mr Jones said. 'So if a multinational from anywhere in the world comes to us, we will give them Asia coverage, and provide the service in a physical sense.' Kerry Logistics has a presence in nine major Asian markets, with an operational umbrella that stretches from South Korea to Australia. Kerry Logistics falls under the Kerry Property group of companies and is owned, along with the South China Morning Post, by the Kuok Group. In Hong Kong, Kerry Logistics operates 14 distribution centres, currently 96 per cent occupied, with a floor area of six million square feet and a capacity of 10,000 order picks per day. Mr Jones said the handling capacity could be easily expanded by converting existing buildings within Kerry Property's land holdings over to warehouse usage. A market leader in handling general cargo, bonded cargo and dangerous goods, the company also claims to be the first third party e-fulfilment service provider in Hong Kong. The company developed a fully integrated Web-based e-fulfilment service in co-operation with looks.com and now handles the needs of several so-called e- retailers. Among major retail and electronic clients are Calvin Klein, and technology leaders Nokia, Ericsson, Sony, and Microsoft. Although Kerry Logistics has expanded into the e-business side with a HK$10-million investment in information technology, Mr Jones remains sceptical about the bullish e-commerce projections, saying many of the numbers tossed about by analysts are unrealistic. He admits e-fulfilment will change the nature of the logistics business, but cautions that the bricks-and-mortar side of the operation will still be there: 'You still need trucks, forklifts and a warehouse,' he said. Kerry Logistics has been shortlisted to develop a logistics centre at Chek Lap Kok. The project, if awarded, will enhance the group's presence in regional air logistics. Mr Jones moved to Hong Kong from Australia three years ago, and works closely with company chairman Ang Keng Lam, who is widely viewed as the chief architect of the group's strategy to create a Pan-Asian logistics service. He said the action plan arose, in part, from casual conversations with executive board members where he spoke about his own perceptions and experience working with a global manufacturing company in Australia. The logistics strategy was finalised about 10 months ago, when the group reorganised the Kerry Logistics and Kerry Warehouse divisions to enhance efficiency, and employed several experienced logistics staff to expand services and concentrate on developing inner strengths. In the near term, Mr Jones said efforts will focus on ramping up the group's China operations. Recent deals include a HK$50- million joint venture agreement with Beijing Holdings to develop logistics operations in Beijing. The distribution centres have been positioned to service the migration of factories out of Guangdong, and will enable cargo trade to the growing domestic market and international export. 'We've been committed in China for many years, and now we are just adding logistics to that,' Mr Jones said. As an early player, the company will take on heavy expenses in infrastructure development, but the strategy is expected to pay dividends down the road. 'It's a long hard road, but it's worth travelling,' Mr Jones said.