Tuesday, March 27, 2007
LOGISTICS OUTSOURCING TO CHINA BECOMES A TREND
By Robert Wright in Shanghai, Transport Correspondent
Tuesday, March 27, 2007, FT
Retailers and consumer goods companies in the developed world are increasingly shifting logistics operations from their home countries to China. Goods are sorted, labelled and even placed in display towers for direct shipment to stores.
Shipping lines, logistics companies and warehouse operators say costs spur customers worldwide to move the sorting process for goods away from consuming countries. The trend continues outsourcing to lower-wage economies that began with the shifting of manufacturing jobs to China.
It is known as “distribution-centre bypass”. It cuts out former distribution centres. Logistics companies and those using the system tend to be wary of publicity, but the UK's Next, a fashion retailer, is known to do much of its sorting for delivery at ATL Logistics in Hong Kong, a distribution warehouse owned by Dubai's DP World. Goods are packed into containers in the right quantities and right order to take direct from a UK port to individual stores.
Distribution jobs were once thought least likely to go overseas since it is complex to arrange supplies of goods for individual stores in the right quantities.
Vera Tang, general manager for corporate development of Hong Kong-based Kerry Logistics, expects growth in the next few years to be “huge” as so many companies still run expensive distribution centres at home: “You can imagine – in those high-living standard countries like Scandinavia – if we can replace what they are doing at the destination with a similar operation at origin, the percentage [saving] can be huge.”
Among Kerry clients using distribution centre bypass are a New Zealand-based lingerie maker and department store chains in the US, Spain and Chile. In Chile's case, she said the company shifted logistics operations abroad, not primarily for cost reasons, but because Chinese workers were more reliable.
Companies not phasing out distribution centres at home are cutting handling costs by paying for processing in China. Boxes of goods UK stores in the Tesco chain from NYK Logistics in Shanghai are shrink-wrapped in quantities needed by each store to reduce UK handling.
Many expect Chinese processing to get more sophisticated. Erxin Yao, managing director for China for the OOCL, Hong Kong shipping line, said his company's logistics arm hoped to attract imports of goods not made in China for sorting at its warehouse to distribute to Japan and Korea. It already handles logistics for Chinese-made exports to Japanese and Korean department stores from its Shanghai warehouse.
Tuesday, March 27, 2007, FT
Retailers and consumer goods companies in the developed world are increasingly shifting logistics operations from their home countries to China. Goods are sorted, labelled and even placed in display towers for direct shipment to stores.
Shipping lines, logistics companies and warehouse operators say costs spur customers worldwide to move the sorting process for goods away from consuming countries. The trend continues outsourcing to lower-wage economies that began with the shifting of manufacturing jobs to China.
It is known as “distribution-centre bypass”. It cuts out former distribution centres. Logistics companies and those using the system tend to be wary of publicity, but the UK's Next, a fashion retailer, is known to do much of its sorting for delivery at ATL Logistics in Hong Kong, a distribution warehouse owned by Dubai's DP World. Goods are packed into containers in the right quantities and right order to take direct from a UK port to individual stores.
Distribution jobs were once thought least likely to go overseas since it is complex to arrange supplies of goods for individual stores in the right quantities.
Vera Tang, general manager for corporate development of Hong Kong-based Kerry Logistics, expects growth in the next few years to be “huge” as so many companies still run expensive distribution centres at home: “You can imagine – in those high-living standard countries like Scandinavia – if we can replace what they are doing at the destination with a similar operation at origin, the percentage [saving] can be huge.”
Among Kerry clients using distribution centre bypass are a New Zealand-based lingerie maker and department store chains in the US, Spain and Chile. In Chile's case, she said the company shifted logistics operations abroad, not primarily for cost reasons, but because Chinese workers were more reliable.
Companies not phasing out distribution centres at home are cutting handling costs by paying for processing in China. Boxes of goods UK stores in the Tesco chain from NYK Logistics in Shanghai are shrink-wrapped in quantities needed by each store to reduce UK handling.
Many expect Chinese processing to get more sophisticated. Erxin Yao, managing director for China for the OOCL, Hong Kong shipping line, said his company's logistics arm hoped to attract imports of goods not made in China for sorting at its warehouse to distribute to Japan and Korea. It already handles logistics for Chinese-made exports to Japanese and Korean department stores from its Shanghai warehouse.
Labels: distribution, 物流
¶ 3:19 AM
