Industry players in Hong Kong indicated that it has become a trend internationally to provide customised logistics solutions for different types of goods. In response to market demand, Hong Kong logistics service providers are leveraging on their individual expertise to develop solutions specifically for hi-tech products or dangerous goods.

Michael Tung, Manager, Business and Commercial Development, Hong Kong and Southern China of BAX Global Limited, said that the characteristics of hi-tech products such as computer components and telecommunications products are that competition in their retail market is extremely fierce. Computer components such as the CPU or chips are expensive to produce while are very susceptible to damage. At the same time, a new generation of the products comes to the market constantly. As a result, a manufacturer cannot afford to hold too many finished goods or component parts in inventory. However, when sales are robust, they would need to transfer the component parts to the production lines expeditiously while the finished goods must also reach the shelves in time to maximise economic benefits.

Because of these unique market characteristics of hi-tech products, Mr Tung believes that logistics service providers must offer a secure, efficient and time-definite process to meet the customers' requirements. For instance, Dell Computers, a client of his company, has suppliers dotted around the world. These suppliers will first transport the component parts for warehousing in Hong Kong. When required, the component parts can be despatched to Dell's production plant in Xiamen within two hours.

The whole process involves supply chain management, said Mr Tung. Third party logistics service providers must be equipped with a satisfactory Warehousing Management System (WMS) for customers to stock and record the locations of their component parts. Customers must also be able to trace the inventory level and to instruct the logistics service provider to despatch the required types and volumes of inventory to the production line when required. The logistics service provider, on the other hand, must maintained links with suppliers around the world to pick up stocks for warehousing when needed.

According to Gilbert Lau, Managing Director of Oriental Logistics Co., Ltd., in European countries and the US where land transportation is mostly long-haul, the facilities used and the management expertise adopted are distinct for each type of goods. For example, the temperature in the warehouse containing dangerous goods needs to be adjusted according to the type of goods stored. While in transit, attention must also be paid to driving speed and maintaining a safe distance from other vehicles.

Mr Lau pointed out that in fact dangerous goods cover a much wider range of products, such as paints, on top of toxic or flammable goods. Paint contains a high concentration of oil which is flammable. Warehousing paint therefore calls for a specially designed warehouse and requires professional training for the administrative personnel. International manufacturers of dangerous goods often impose special demands on their third party logistics service providers. In order to demonstrate the company's expertise on handling dangerous goods, Mr Lau's company has acquired the associate membership of the International Chemicals Association since 1998.

Courtesy HKTDC