As one of the more mature economies in Asia, Hong Kong has long been outperforming its regional peers in terms of sophisticated management know-how.

Today, logistics management is one of the most sought-after skills for emerging economies who are looking to make their supply chain processes more efficient. It’s a field in which Hong Kong excels. Exporting our logistics expertise to other countries in the region - especially to China, which has the world's fastest-growing economy, is already providing added benefits for the Hong Kong economy and for smart local businesses.

Sims Trading Co Ltd is an excellent example of a local company successfully exporting logistics expertise. The company has clearly demonstrated Hong Kong's pre-eminent position in regional logistics management and has now established an “export path” that other local firms with similar logistics expertise can follow.

The “one-stop shop” approach

Sims prides itself as a one-stop total solutions provider of seamless distribution logistics management for the region. The outstanding performance of the company over the years has shown that clever control of distribution logistic can enable smart entrepreneurs to implement aggressive, innovative new marketing strategies while keeping costs under control and ensuring that product supplies remain stable.

Sims provided a very convincing example of its distribution service when they fulfilled the demanding logistical needs of the 7-Eleven group in Hong Kong. They helped the convenience store chain to achieve one of its most sought-after goals: to reduce inventory to zero.

“We take pride in our ability to fulfil the logistics management requirements of 7-Eleven,” says Sims' logistics director David Kuk. “They were one of the first retail outlets to implement the zero-inventory strategy.”

Sims operational effectiveness in distribution enables 7-Eleven - which has more than 600 outlets in Hong Kong.

Enhancing competitiveness with VAL services

Sims further distinguishes itself from its rivals by its dedication to expanding its range of value-added logistics (VAL) services in an effort to offer clients a truly one-stop seamless logistics solution.

Sims' VAL services extend to the finest details in the supply chain management, including:

• Shipping and customs declarations
• Tailor-made repackaging services, including shrink wrapping, bundle packaging, labelling and price-tagging
• Packing material design and sourcing
• Sharing client databases to enhance outsourcing efficiency
• Import and export shipment handling
• Cash/ credit collection
• Customised logistics consultation service

This extensive portfolio of VAL services also illustrates the ways in which third-party professional service providers can facilitate the successful introduction of foreign brands without the brand owners having to establish a physical presence onshore.

Leveraging past and present

As a former trading arm of Dairy Farm - which was once the largest grocery and consumer goods trading company in Asia - Sims' present role as a wholly-owned subsidiary of CITIC Pacific Ltd enables it to blend meticulous logistics management expertise with the capacity to help clients extend their China reach.

Being a member of the CITIC Pacific Group, Sims is an official China importation agent. The company can handle their clients' custom inspection and quarantine (CIQ) requirements as demanded by China’s custom authorities.

”Our unique capacity as an official import and export agent and our extensive distribution coverage network in China allows us to provide a one-stop import and distribution solutions for newly branded products manufactured by companies with no physical presence and experience in China or Hong Kong,” Kuk explains.

He says Sims helps import the goods from the clients, processes the custom inspection and quarantine procedures and customs declarations, and distributes the goods to retailers designated by the clients or from their own client list.

”Our closed circuit camera systems allow clients to see, using the Internet, how their goods are stored in our warehouse. This provides an extra layer of assurance and security to those customers whose merchandise needs special care,” he adds.

“Ultimately, what we want to achieve is to totally free up that capacity of our clients which they currently spend on nitty-gritty operational and logistics procedures so that they can better focus on their core businesses.”

Kuk believes this one-stop total logistics approach also meets the needs of overseas customers whose merchandise comes primarily from Mainland China.

“Our newly built logistics centre in Xinhui covers major Chinese cities including Shanghai, Guangzhou, Shenzhen, Beijing, Xian, Shenyang, Chengdu and Nanjing, allowing us to provide logistics hub facilities that overseas customers need to have near their retail networks,” he adds.

The new centre in Xinhui is also equipped with a bonded warehouse that allows Hong Kong- or Taiwan-based manufacturers to store raw materials and partly-finished products and components to support their mainland production bases.

Sims’ Xinhui Logistics Centre, together with its bonded warehouse there, will start operations in August this year. It will provide total logistics and value added services to industries in various cities in the mainland. The range of services include import clearance services and hygiene inspection handling; importation and exportation shipping services; freight forwarding goods consolidations; packaging materials design, sourcing and quality control; bonded warehousing for importation of goods to the markets in the mainland, etc.

Kuk said, “Our new centre will help customers reduce cost and time in sourcing and handling of packing materials, reduce stock holdings in Hong Kong, and reduce logistics cost and efficiency.”

Building success on Tradelink services

Perhaps not surprisingly, given this enormous range of activities, Sims is an active user of Tradelink’s electronic trade declaration service.

Sims warehouse manager, Jimmy Tong, points out that Sims handles about 400 shipments every month, and Tradelink’s electronic services have brought about huge savings in their human resources, and helped improve storage and classification of shipping documents.

”In the old days we prepared the trade declaration documents manually in hard-copy format and submitted them in person to the trade declaration offices in office hours,” he recalls.

“A shipping clerk essentially spent one full day a week processing the documents and extra hours queuing up to submit them - and the workload doubled when we needed to make changes to the information we filed. This is a huge wastage of manpower.”

Tong points out that Tradelink’s service ensures everything is in soft-copy format and arranged systematically. “We can file our declarations at practically any time,” he adds, noting that the real benefit is realised when Sims enquires about document status or wants to amend details.

”Previously we needed to spend half a day or a full day to make an inquiry or a change - now all we need is a few clicks on a computer keyboard.”

Tong says Sims has “very high” hopes for the forthcoming Digital Trade and Transportation Network (DTTN).

”We source our goods from all around the world and about 60% is shipped via major shipping companies, which usually provide good facilities for us to keep track of our shipment,” Tong explains, admitting that the remaining 40% is “a bit of a headache” for the company.

“A single platform like DTTN would enable us to locate shipping service vendors and track the shipment. This would be a great help to us.”