Logistics News

Asian box shippers must collaborate better

UK drinks giant Diageo calls for better partnerships among cargo owners, shipping lines and logistics operators

April 27, 2012

UK drinks giant Diageo calls for better partnerships and collaboration among cargo owners, shipping lines and logistics operators.

Speaking at the recent TOC Container Supply Chain Asia 2012 conference in Hong Kong, Diageo’s APAC
Customer Service and Logistics Director Mark Holloway said executives keen to make the most of Asia’s growing economies and robust markets must make partnerships their key goal.

Supplying brands such as Johnnie Walker, Smirnoff, Baileys and Guinness to approximately 180 markets worldwide, Holloway says the complexity of container booking documentation, limited proactive information, data fragmentation along the supply chain and highly variable delivery performance are the company’s
key logistics challenges.

He says
better partnerships should aim to improve services for customers like Diageo and eventually win their trust.

“We are becoming more customer-centric and need our partners to do the same,” Holloway says.

“For Diageo, performance today is as much about planning and logistics as procurement and manufacturing.”

“And in case of change or delay, shippers simply want sufficient forewarning so that they can mitigate the effect before it impacts the whole supply chain,” he says.

“In short, there is often a lack of proper end-to-end visibility between all the parties.”

Keynote conference speaker Tommy Lui, Executive Vice President of global procurement specialist Li & Fung pointed to significant changes in Asia trade volumes and patterns in the coming few years which will drive greater demand for fast response logistics oriented towards import and domestic business.

“The ‘golden triangle’ of the region’s three most populous countries – China, India and Indonesia – are all projected to maintain annual economic growth rates of at least 9 percent for the next 3-4 years,” he predicts.

“However, there are some significant changes on the horizon, particularly in China, summed up by slower export growth yet soaring domestic trade.

Lui adds the past assumption that Chinese growth is built solely on an almost unlimited supply of cheap labour is fast disappearing as rapidly rising wage rates in the country’s manufacturing heartland force more and more industry into China’s interior.

“Similar patterns can also be seen in India and Indonesia as the growing middle class looks to consume more,” he says.

Lui says this will likely generate significant changes in trade volumes and patterns, with import and domestic logistics growing much faster than export-oriented logistics, requiring responsive logistics strategies to cope with fast changing consumer tastes and demands.

TOC Container Supply Chain Asia was attended by nearly 1,000 container logistics, transport and port industry executives from Asia Pacific, Europe, Africa, Middle East and the Americas.

The 3-day conference and exhibition returns to Hong Kong in 2013 from 12-14 March.

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