Archive for the 'distribution centers' Category

Grand Power Logistics saw revenue increase by 68.4% to $99.6 million compared to the same period in 2006. Gross profit for the year increased by 72% to $6.9 million.

Costs related to the Company’s aggressive expansion, particularly in China resulted in a net loss of $139,623 but to that should be added adjustments to employee’s compensation so that direction was solidly in the right direction.

Ricky Chiu, President and CEO of Grand Power, said, ‘Successfully implementing our expansion plans did challenge our margins during the year, but we believe our efforts will be rewarded with continued strong revenue growth and increased profits as we benefit from economies of scale and our entry in higher margin segments of the logistics value chain.’

Cargo shipments showed the strongest growth in the European markets, growing by 162% to 7,973 tonnes in 2007. Strong gains were also reported in the US markets with 9,468 tonnes shipped, an increase of 43.9%.
Grand Power’s expansion into China in 2007 also resulted in significant growth as air cargo increased by 926% to 4,388 tonnes.

To help facilitate further expansion and grow market share, Grand Power has established Shanghai as the China headquarters.
Source: MarketWire

Port operator China Merchants Holdings (International) saw 2007 net profit surge 40% on increased capacity and strong container volumes.

The Hong Kong-listed company’s net profit rose to US$455 million from $325.6 million in 2006. Revenue was up 58% to $802.56 million from $507.69 million.

China Merchants has container port investments in Shenzhen, Shanghai, Hong Kong, Tianjin, Qingdao, Ningbo and Zhangzhou.

China Merchants 2007 throughput rose 17% to 47.12 million TEUs with mainland China ports handling 40.11 million TEUs, up 20% from 2006.

Earlier, Chairman Fu Yuning, seen here, said the company is planning to invest in more container terminals both in China and overseas.
Source: CargoNews Asia

Bosch Group has started construction of a $6.31 million logistic center in Changsha, the capital city of Hunan Province, to optimize its logistics efficiency in central China.

The new center is built on a 10,000-square-meter site with an expanded automotive logistic network. When it is completed towards the end of this year, it will coordinate all automotive products to and from the Changsha site, including on-time delivery of production materials.

Bosch (which is the company that invented the spark plug) started operations in Changsha in January, 2005, with a total investment of $89 million up to 2008. Bosch Changsha is the main production facility for electrical drivers, starters and alternators for Bosch, arguably the world’s leading car part maker, in China.

The site offers a full range of mechatronic components and body applications systems for the entire automotive industry in China including motors for ABS and engine cooling. (If, like me, you are puzzled by this new word mechtronics the definition given by Wikipedia is: Mechatronics is the combination of mechanical engineering, electronic engineering and software engineering. The purpose of this interdisciplinary engineering field is the study of automata from an engineering perspective and serves the purposes of controlling advanced hybrid systems. The word itself is a portmanteau of ‘Mechanics’ and ‘Electronics’.)

My own view entirely. Could not have put it better myself. It was right on the tip of my tongue.
Source: China Daily

There is concern in India about the expansion of the port at Gwadar in Pakistan. This, even though the port will be under the management to Singapore Port Authority which last year won a bid to operate the port for 40 years and even though China did not bid to operate the port. India has expressed serious concern about the port and its possibilities.

Indian Naval Chief, Admiral Sureesh Mehta said last week that the Gwadar port has ’serious strategic implications for India.’

He said, ‘Being only 180 nautical miles from the exit of the Straits of Hormuz, Gwadar, being bulit in Baluchistan coast, would enable Pakistan take control over the world energy jugular and interdiction of Indian tankers.’

This statement chimes with US Colonel Christopher J. Pehrson’s study called: String of Pearls: Meeting the Challenge of China’s Rising Power Across the Asian Littoral.

Admiral Mehta said that China is seeking to set up bases and outposts across the globe, strategically located along its energy lines, to monitor and safeguard energy flows.

Col. Pehron argues that the ‘String of Pearls’ describes the manifestation of China’s rising geopolitical influence through efforts to increase access to ports and airfields, develop special diplomatic relationships, and modernize military forces that extend from the South China Sea through the Strait of Malacca, across the Indian Ocean, and on to the Arabian Gulf.

Having said that the cost benefits to China of using Gwadar as the port for western China’s imports and exports are as evident as the long-term economic benefits to Pakistan of Gwadar becoming a port for Chinese goods.

The whole argument appears in full, with perhaps an anti-Chinese, pro-American bias in Source.
Source: Counter Currents

Largely in response to the pull from their American client base, mid-sized US freight forwarders have been expanding aggressively in China. Typically, this has drawn them to Shanghai first, but as their customers move inland, regional and domestic activities in other locations are on the rise.

IJS Global is a relative newcomer to China. The company’s declared goal is to become a logistics firm with annual revenues of around US$500 million and a global footprint, employing 1,200-1,500 people.

Over the past two years IJS has opened offices around the world. By mid-January, it had offices in 36 locations, plus agency partnerships in a host of markets. According to chairman and chief executive officer Giorgio Laccona, the expansion is now largely completed.

The forwarder opened its first China office in Shanghai and subsequently added Shenzhen.

Giorgio Laccona said, ‘We used to cover the area from Hong Kong, but we saw good opportunities with people we knew in Shenzhen. Now you can fly cargo from Shenzhen, you can truck it to Hong Kong or to Guangzhou.’

IJS is currently talking with an undisclosed Chinese company about a possible tie-in, which would give the US-based outfit a presence in a host of Chinese cities.

Giorgio Laccona said, ‘If this does not work out, we can expand into another four facilities with our Class A licence. In that case, the most likely targets would be Beijing, Qingdao, Guangzhou and Ningbo.

Chris Coppersmith, president and chief executive officer of California-based Target Logistics Services said, ‘Our emphasis has been on specific sales to American multinationals. Our American clients have pushed us to those locations.’ Target currently has nine locations in China and has had its own licence in the country since 1997.

BDP’s first China branch opened in Shanghai, followed by a representative office in Beijing, as it was not permitted to open its own office in the capital at the time, Ken Wensel recalled. He said that the red tape has shrunk significantly in the meantime.
Ken Wensel said, ‘The regulations are not obstacles any more, they’re hurdles now. They used to be showstoppers.’
Source: CargoNews Asia

According to the estimates of the China Federation of Logistics and Purchasing (CFLP), in 2007 China’s total logistics flow in 2007 grew 25.5% to RMB74.8 trillion ($10.27 trillion).

Lu Jiang, chairman of the CFLP at a forum on international logistics cooperation in Beijing said, ‘Although the industry maintained stable development in 2007, competition from foreign peers will mount in 2008 and the domestic logistics sector will see increasing openness.’

Lu also pointed out challenges facing domestic logistics enterprises, including insufficient information technology support and unadvanced transportation methods.

These seem to be good reasons why China ranks thirty in the world when it comes to logistics efficiency. See story on China’s logistics efficiency below.
Source: China View

This is a corrected version of the original story.

The World Bank had prepared a Logistics Perception Index (LPI) which is the simple average of the country scores on seven key dimensions:

Efficiency and effectiveness of the clearance process by Customs and other border control agencies;
Quality of transport and IT infrastructure for logistics;
Ease and affordability of arranging shipments;
Competence in the local logistics industry (e.g., transport operators, customs brokers);
Ability to track and trace shipments;
Domestic logistics costs (e.g., local transportation, terminal handling, warehousing); and
Timeliness of shipments in reaching destination.

On a world ranking scale on logistics China comes in at thirty.

The leader is Singapore, followed by the Netherlands, Germany, Sweden, Austria, Japan. China is, sadly, some way down the list at number 30. Reading the figures the area which pulls China down is ‘customs’ and ‘tracking and tracing’ although there is plainly much to be done right across the board to get up to the dizzy heights of Singapore which is currently the leader of the pack.

Our thanks to Rory Mitchell of Speedflex Medianet Limited for pointing out the error of our ways.

You can play with the figures by the hour by clicking on source. Fascinating stuff.
Source: World Bank

Before we get lost in the total alphabet soup which so bedevils Supply Chain Managment it is good to know that VMI, which concerns us here, is Vendor Managed Inventory , Warehouse Management Systems is WMS, Distribution Requirements Planning is DRP, Electronic Funds Transfer is EFT, Enterprise Resource Planning is ERP, Just-in-Time is JIT, Material Requirements Planning is MRP, POS is Point-of-Sale, Total Cost of Ownership is TCO, Vendor Managed Inventory is VMI and Warehouse Management Systems is WMS.

There are many, many others but these are the ones likely to appear in your term paper.
Knight Electronics provides OEM (original equioment manufacture) customers on-the-ground presence in China. So, in effect, they become the company in China.

Knight Electronics has now opened a vendor-managed inventory warehouse in China.
Bob Knight, president of Knight Electronics, said, ‘Our VMI warehouse provides our OEM customers with a presence on-the-ground in Asia, so they don’t have to manage the hassles of shipping, inspections, and delivery times from the United States or Europe to Asia

‘Our customers’ products can be manufactured in China and shipped directly to their Asian customers, reducing inventory, shipping and inspection costs while increasing profit margins.’

In other words the company provides all the services a large company establishes itself on the ground for a large amount of money. For OEMs the VMI warehouse will help reduce large capital outlays for large quantity shipments, provide a point for Asian site inspection, reduce travel time and expenses, solve communication problems, remove a risk associated with quality issues, and solve the logistics problems of shipping, payments and return of defective products. Which is what we said earlier.
Source: EMS Now

Dalian Port was, at one time, the number one port in China. Not any longer but it is making a strong comeback and hopes to become a shipping hub for Northeast Asia.

This come-back process started last May when China’s largest mineral ore berth started trial operations.
A month later it announced it had opened more ocean routes and lifted its container volume.
In July, Dalian Port began trial operations of China’s largest crude oil berth and started construction of giant auto berths.

Dalian is not the only port expanding and modernizing in the north east. There is, as it were, a three-port battle for Northeast Asia hub status.

The other two vying for the status are Tianjin and Qingdao.

Tianjin leads the northern trio in general cargo volume and is expected to further increase the gap this year by boosting general cargo capacity by 42 million tons and container capacity by 1.5 million TEUs.

Qingdao is China’s third largest container port after Shanghai and Shenzhen and its general cargo volume is also more than that of Dalian.

Dalian Port also faces fresh competition from the neighboring ports of Yingkou and Jinzhou.

Hui Kai, director of the Dalian Port Authority, is aware of the port’s deficiencies being outnumbered in container terminals and general cargo berths. But he said, ‘By 2010, Dalian will be able to handle 250 million tons of general cargo and 10 million TEUs of containers. And by 2020, the port will lift its capacity to 350 million tons of general cargo and 15 million TEUs of containers.’

Crude oil, roll on-roll off cargo, grain and containers will be the main targets of the port. For a very full report click on Source.
Source: CargoNews Asia

DHL’s parent company, Deutsche Post World Net (DPWN), will buy the remaining 50% of Sinotrans-Exel, which is a joint venture, in China.

Exel and DHL business units will be amalgamated under the DHL Logistics brand in China.

Peter Landsiedel, DHL Global Forwarding’s Asia-Pacific CEO,, said, ‘DHL and Sinotrans have had, and continue to have, an ongoing and mutually beneficial relationship in the logistics and express industry in China.

‘The agreement to sell its 50% stake in the Sinotrans-Exel JV is strategically relevant to each organisation, and is a move that suits both groups’ long-term objectives and approach towards developing and maintaining a market leadership position in China’s booming logistics industry.’

Last month, DHL announced a US$175 million investment for its new Shanghai-based North Asia Hub, bringing the company’s total recent investment in the region to just over US$2.2 billion.

Victor Mok, DHL Global Forwarding’s senior vice president for Greater China, emphasized that Sinotrans and DHL Logistics remain strong business partners, and future collaborative efforts will be in line with both groups’ China expansion plans.
Source: Eye for Transport