Regional Profile Navigating Asia's Complex Logistics

Asia presents a host of possibilities for manufacturers and service providers. With a rapidly expanding population in emerging regions such as China, India and Southeast Asia, the expanding demand for logistics and supply chain management solutions will present new opportunities for companies that are seeking new sources of growth.

However, given the region’s diverse business environments, customs regimes and transport infrastructure, the equation for optimal supply chain management will not be predicated on cost alone. Instead, an astute ability to navigate Asia’s complexities will be a key competitive advantage for manufacturers and 3PLs that seek to achieve lower total landed cost at better time-to-market.

In this respect, Wong suggests, Singapore presents an ideal partner to help companies address this conundrum. The city-state is strategically located along key shipping lanes, while being centrally located in the Asia Pacific region. Furthermore, it has established a comprehensive network of logistics linkages with key markets in Asia and beyond–PSA Singapore is linked to 600 other ports in 123 countries via over 200 shipping lines; Changi Airport has more than 4,000 flights per week connecting to 60 countries.

In a recent survey conducted among global freight forwarders and express carriers who are most active in international trade, the World Bank ranked Singapore the world’s top logistics hub, based on a Logistics Performance Index computed on several key criteria. Those criteria include ability to track and trace shipments, timeliness in cargo arrival, logistics costs, competence of domestic logistics industry, and ease and affordability of international shipments.

Indeed, Singapore’s position as the world’s top logistics hub is built on three key strong fundamentals: (1) world-class infrastructure; (2) a vibrant ecosystem of world’s leading players, (3) a focus on knowledge and thought leadership.

Logistics Infrastructure
To ensure that Singapore-based companies command a competitive advantage for regional distribution and trading activities, Singapore has invested in specialized facilities to meet the complex needs of high value-added industries that require rapid turnaround time or careful handling of bulky raw materials or processed goods:

Airport Logistics Park of Singapore (ALPS) is strategically located within the free trade zone and in close proximity to Singapore Changi Airport. Logistics players and manufacturers alike can leverage the airport’s excellent connectivity and superior handling efficiency for quick turnaround of high-value cargo for regional distribution. The 26-hectare facility is almost fully occupied by 3PLs, and has established its position as a choice location for activities such as regional fulfillment, customization and postponement. In addition, multinational companies (MNCs) (e.g. Sandvik, Texas Instruments) have set up regional distribution centers in ALPS to expedite export to Asia Pacific markets. Among the multi-national 3PLs occupying space in the logistics park is US-based Menlo Logistics, which has its regional headquarters for Asia, India and Australia on Boon Lay Way and operates primary warehouses there and at ALPS.

Changi International LogisPark further complements ALPS by providing a dedicated logistics facility in close proximity to Changi Airport just outside the free trade zone. In 2008, Panalpina more than doubled its warehousing and distribution facility to more than 11,000 square meters in Changi International LogisPark. This expanded facility will be a key node in Panalpina’s Asia Pacific operations.

Changi Airfreight Centre (CAC) presents a 24-hour, 47-hectare free trade zone where consolidation and break-bulk can be conducted with minimal customs formalities. Coupled with two dedicated Express and Courier Centres, the CAC can accommodate requests for time-definite shipments to regional markets.

Banyan LogisPark is a world-class logistics hub that provides integrated logistics services on Jurong Island for chemical transshipment and distribution in Asia Pacific. Leading logistics service providers that have set up terminals along the 80-hectare waterfront land include Vopak, Horizon and Katoen Natie.

Vibrant Ecosystem
While 3PLs find it competitive to leverage Singapore’s specialized infrastructure, they need to move up the value chain to differentiate their services for customers that seek to expand into Asia. In this regard, 3PLs in Singapore (e.g. Agility, Nippon Express, Schenker) have developed integrated end-to-end logistics services that can serve the complex SCM needs of manufacturers across different industries and business models.