SingPost Warehouse Source: Bangkok Post, Thailand Post Logistics Unit Expected To Turn Profit

SingPost Warehouse, Source: Bangkok Post

The company’s logistics revenue is expected to reach THB 480 million, a 60% increase from THB 300 million in 2015.

“We also expect to break even this year, after facing a loss of 100 million baht last year, thanks to our cost-effectiveness strategy”, said Warakan Srinualnad, chief executive of Thailand Post Distribution, the logistics arm of Thailand Post.

Thailand’s logistics market has experienced an average annual growth rate of 15% per year, highlighting a growing need for high-class logistics service.

Thailand Post began its logistics operations in 2015, mainly serving the pharmaceutical industry, ecommerce and warehouse management. The company has nine of its own storage and distribution facilities in major provinces.

The company projects revenue from its medical and pharmaceutical services to account for 80% (THB 384 million) of the total this year. Ecommerce is set to account for 12% and its warehouse management service is set to generate 8%.

“Thailand Post Distribution expects revenue from its ecommerce service to surge to THB 58 million this year, as that market is booming,” comments Srinualnad.

A version of this appeared in Bangkok Post on June 24. Read the full article here.

supply chain challenges in Southeast Asia reached a turning point

Source: Reuters, Ralph D. Freso

The supply chain challenges in Southeast Asia have reached a turning point owing to the scarcity of supply chain professionals, increased consumer diversity and fragmented supply chains. Transforming supply chains to reach market potential is a mammoth task but it can become a source of competitive advantage and drive global growth for businesses.

The many layers of suppliers, localized delivery and route to consumer practices, and lack of transparency and consistency in information flows make it incredibly difficult for businesses to achieve the next wave of global growth but also positions global businesses to capitalize on growing demand in these markets. For most companies the potential is clear; the challenge is how to address it.

As companies move their factories from China to Southeast Asia due to rising labor costs and the move away from an export-based economy, they should grasp the opportunity to carry out a full supply chain review to identify how they should configure their supply chains better.

Accelerate the supply chain transformation with best practice

Bringing best practice into the strategy from elsewhere can accelerate the transformation. Labor remain a big challenge for this relatively young region for the manufacturing industry meaning there is limited supply chain knowledge and a lack of experienced professionals and high staff turnover as employees are quick to leave for even marginally higher wages.

To capture the full potential in Southeast Asia, it is best to establish a physical presence and subsequently localize knowledge and skills.

This can be done by setting up R&D centers or developing region specific leadership and training programs. Coupled with a long-term focus on developing local supply chain knowledge and people capabilities, it can ensure a successful transformation.

A version of this appeared in Supply Chain Digital on June 20. Read the full article here.

Indonesia’s logistics costs are 24% of GDP, currently the highest in the region. The country’s logistics performance index (LPI) also lags behind its neighboring countries like Malaysia, Thailand, and even Vietnam, according to World Bank but Hong Kong-based digital logistics startup OpenPort is attempting to lower Indonesia’s logistics cost via technology.

The platform enables clients to track the entire distribution process – claiming to cut companies’ logistics costs by up to 30% by cutting out the middleman. Connecting shippers and carriers via OpenPort’s digital platform will also replace the inefficient paper-based process, decreasing the time it takes carriers to receive payment from three months to one month. Their cloud-based digital logistics platform will allow the supply chain to be managed entirely in house, solving headaches for many logistics companies in the archipelago.

“With more than 17,000 islands scattered across the country, Indonesia needs to make its logistics and supply chain management system more transparent and more efficient, and it is impossible to do so without deploying technology and systems that can seamlessly monitor processes and cut out inefficiency wherever possible.” said its chief executive officer, Max Ward.

The Indonesian Logistics and Forwarder Association (ILFA) has highlighted that the republic can unlock a potential US$250-billion worth of value in the logistics market if it could make the sector more transparent and cut out hidden costs.

The startup plans to expand its operations in Indonesia to Surabaya where the major Perak Port is located.

A version of this appeared in Digital News Asia on June 14. To read the full article, click here.