Despite shortage of space and staff, no stop to distribution centre growth

DutchNews, March 26, 2018

Photo: Depositphotos.com

New distribution centres covering a record of nearly two million m2 – the equivalent of 400 football fields – were built in the Netherlands in 2017 and still more are planned along the country’s motorways, according to research by broadcaster NOS. 

Many large international companies are queuing up to distribute their products through the Netherlands despite the shortage of land and people to staff them, NOS said.There are currently 53,000 unfilled distribution centre jobs available. 

NOS contacted commercial brokers association NVM Business as well as a number of leading commercial property firms for its report. ‘We are seeing for the first time that  developers are building distribution centres on spec before they have any tenant or buyer in mind,’ said Liesbeth Kramer of NVM Business. ‘Demand is enormous.’ 

Total space covered by distribution centres in the Netherlands has increased by 40% to more than 30 million m2 in the past 10 years. The most are located in Noord-Brabant province, followed by Limburg. 

‘All major high streets from London to Paris  and Germany’s Ruhr region are stocked by warehouses in the southern part of the Netherlands,’ said Joost Uwents, CEO of Belgo-Dutch developer WDP, which is the largest in the Netherlands. 

Uwents, who is a Belgian national, is full of praise for the Dutch government which has supported the logistics sector in a big way. He cites major improvements to the road infrastructure around Rotterdam and Eindhoven as will as upgrades in the rail and inland waterway structures. 

Tax 

The Dutch tax regime – unlike that in in other countries  – also benefits distribution activities as VAT is added only on final delivery of goods, said Richard Elich of property developer David Hart Group. 

And even though the southern part of the country is generally preferred for distribution centres, the parent of Spanish fashion group Zara opted for Lelystad for its new distribution centre.  ‘Quite simply, they settled there because the could get both space and staff,’ Uwents said.

Silk Road route back in business as China train rolls into London

After 16 days and 7,456 miles, the locomotive’s arrival heralds the dawn of a new commercial era

The East Wind freight train prepares for its journey at Yiwu station in
Zhejiang province of China. Photograph: VCG/Getty Images

The Guardian – The Observer, Tracy McVeigh,  14 January 2017

When the East Wind locomotive rumbles into east London this week, it will be at the head of 34 carriages full of socks, bags and wallets for London’s tourist souvenir shops, as well as the dust and grime accumulated through eight countries and 7,456 miles.

The train will be the first to make the 16-day journey from Yiwu in west China to Britain, reviving the ancient trading Silk Road route and shunting in a new era of UK-China relations.

Due to arrive on Wednesday, the train will have passed through China, Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France before crossing under the Channel and arriving in the east end of London at Barking rail freight terminal.

Faster than a ship, cheaper than a plane, the East Wind won’t be quite the same train that left Yiwu on 2 January. Differing rail gauges in countries along the route mean a single locomotive cannot travel the whole route. But the journey still marks a new departure in the 21st-century global economy. The new train, which will start to run weekly while demand is tested, is part of China’s One Belt, One Road policy – designed to open up the old Silk Road routes and bring new trade opportunities, said Prof Magnus Marsden, an anthropologist at Sussex University’s School of Global Studies, who has been studying the trading patterns in Yiwu. China Railway has already begun rail services to 14 European cities, including Madrid and Hamburg. As a result, Yiwu’s markets are now loaded with hams, cheese and wine from Spain and German beer is available on every corner.

“It’s a new economic geography,” he said. “This is the first train to the UK, but very much part of a new type of commercial route. The commodities are small. It’s not the big corporates who will be using this train, so it’s very much in the tradition of the Silk Road, giving opportunities for those who are in fact the inheritors of those ancient traders today.” Yiwu is a gigantic bazaar, he said, where traders from all over the world congregate. The goods brought to Britain by the East Wind are not as exotic as the peacocks and gemstones that were once transported along the Silk Road, which ran through Europe and Eurasia’s historical dynasties and empires. The trading route, thought to have been established in around 200BC, brought the west textiles, exotic foods, paper making – and probably the Black Death.

Everything from chairs to illicit drugs were sent back the other way. On one occasion China threatened Queen Victoria that it would stop exporting her favourite rhubarb to England if she didn’t do something about the British opium trade. “Yiwu made its name internationally as a city in which traders could buy affordable commodities in bulk,” said Marsden. “The city’s early trade was mostly with markets in Asia, Africa, Latin America and eastern Europe. From the sprawling container markets of the former Soviet Union to the bazaars of the Middle East, commodities purchased in Yiwu have both made and unmade people’s lives. These products have contributed to the demise of local industries, yet have also had a hand in the resurrection of great trading cities that had fallen into decline, the Black Sea port of Odessa in Ukraine, or Sulaymaniyah in Iraq being such examples.”

Today Yiwu’s streets are among the most cosmopolitan in the world, full of traders from Colombia, Afghanistan, Kurdistan, Pakistan, India, Syria, Angola and Ukraine, and could now be attracting a few from the UK as well.

In Barking there is great excitement over the arrival of the East Wind, the name of which references the Chinese communist leader Mao Zedong, who famously said: “The east wind will prevail over the west wind.”

“The new service has a very quick transit time,” operations director, Mike White, told the Railway Gazette. “We believe this is going to change the way a lot of forwarders and shippers view their imports and exports for China.” 

Germany already feeling the love from China's Belt and Road

Want China Times, Staff Reporter 2015-07-19

The Sino-Europe rail linking Chongqing and Duisburg, March 2013. (Photo/Xinhua)

The eight international rail freight routes linking China and Europe together conducted 308 trips last year, up 285% from a year earlier, as the "New Silk Road" runs its course, reports the Shanghai-based China Business News.

China's promotion of the international rail freight routes is chiefly aimed at developing its central and northwest economy. The only way to effectively boost these regions is by integrating Central Asia, Central and Eastern Europe, said Zhou Yun, research fellow at the German Institute of Global and Area Studies (GIGA).

Hans-Jorg Schimdt-Trenz, CEO of the Hamburg Chamber of Commerce, welcomed China's construction of bridges, roads and rails linking its neighbors, saying it will contribute to the economic development of neighboring countries, benefiting both China and the world.

The Sino-Europe rail began from the route linking with China's Chongqing and Duisburg of Germany in 2011, and now four freight trains make the trip every week.

The Chongqing-Europe rail is helping Chinese enterprises export their products to the European market. In fact, North Rhine-Westphalia, where Duisburg is based, is the most concentrated area for Chinese investors, having received investments from more than 800 Chinese enterprises.

The international rail freight is faster than by sea and costs lower than air transport, a double bonus for inland countries and areas. When the Sino-Europe rails began operations, transport volume was low and less frequent. Now most trains are usually full when they start out from China, and empty when they return.

Schimdt-Trenz attributed the imbalanced freight to China's 'world factory' status, which makes it a largely export-oriented country. China should further expand imports and adjust its economic structure to achieve a balance, said the report.

Although rail freight is becoming more popular now, it still cannot replace cargo by sea, said experts.

Since China advocated the "Belt and Road" initiative, Germany has been supporting calls to establish the Silk Road. In general, the German public has a positive evaluation of the project, said the report.

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Want China Times, Staff Reporter 2015-04-01

Two high-speed locomotives in a hangar in Guiyang, Guizhou province.
(File photo/CNS)

Beijing plans to invest 300 billion Russian rubles (US$5.2 billion) to build Russia's first high-speed rail line between Moscow and Kazan, reports the Xinhua publication Reference News.

China reportedly proposed the investment to Alexander Misharin, first vice president of Russian Railways, in a meeting during the Boao Forum for Asia in Hainan. Chinese officials suggested the two countries form a joint venture for the rail line, each taking a 50% stake.

Around 50 billion rubles (US$860 million) of the investment will be equity payment made by the Chinese company responsible for the project. Chinese banks will lend the remaining 250 billion rubles (US$4.3 billion) to Russia for 20 years.

The 770km-long rail line linking five regions in Russia — Moscow, Vladimir, Nizhny Novgorod, Cheboksary and Kazan — would reduce the travel time from 11 and half hours to around three and a half. Many European and Chinese companies have shown interest in the project.

Logistic firms pin hopes on domestic orders

The Jakarta Post, Jakarta | Mon, 02/09/2009 6:26 PM  

The logistics sector, which absorbs the most workers after the manufacturing sector, is relying heavily on growth in the domestic market this year. 

As the global economic downturn erodes demand for imports and exports, the Indonesian Logistics Association (ALI) expects the majority of growth in orders to come from the local market. 

And with the elections looming large, the association's high hopes for domestic orders seem justified, ALI chairman Zaldy Ilham Masita said Saturday. 

"We are optimistic that we'll see 10 percent growth in domestic demand this year, because of the upcoming elections," he said. 

Past experience shows that elections have proved a major boost for transactions that involve logistics services. 

The country is gearing up for legislative elections in April and a presidential election in July. 

In addition, "Indonesia's population of more than 220 million people is also a potential and vast market that will contribute to growth in the domestic demands," Zaldy said. 

Still, the expected growth in domestic orders is relatively low compared to last year's growth of 17 percent. 

On orders related to imports and exports, the industry may see zero growth, with a strong possibility of a descent into negative territory, as the impact of the global downturn peaks at the start of the second half of this year. 

"Exports orders have been declining since the October crisis, and most manufacturing companies are also reducing imports of raw materials because of the high costs," Zaldy said. 

Last week, the Central Statistics Agency (BPS) announced that December exports had plunged 20 percent from a year earlier as overseas demand dwindled, emulating the declining trend in the last three months of 2008. 

Despite growing worries of mass layoffs this year, the ALI expects that absorbance of new employees will still grow by 3 to 5 percent, down from last year's figure of more than 10 percent. 

"We will still see some growth in employment because the logistics sector is very intensive in terms of workforce. Our workers range from truck drivers and warehouse operators, to laborers and other semi-skilled workers," Zaldy said. 

He added most of the jobs created would be for semi-skilled laborers, at a time when most firms were being more selective in hiring skilled laborers. 

To cope with the deepening global crisis, he went on, small logistics firms would consider merging. 

The logistics sector absorbs not only huge number of workers, but also contributes at least 20 percent to the country's GDP. 

Infrastructure is still considered the main challenge for the future growth of the industry. 

"What we need is adequate infrastructure that will ensure the fast and safe transportation of logistics," Zaldy said. 

Under a blueprint on national logistics, recently drafted by the Office of the Coordinating Minister for the Economy, the government will speed up the development of the logistics industry. 

Among other things, the blueprint mandates the establishment of a Logistics Committee tasked with coordinating among related ministries, and the formulation of action plans. 

The blueprint will also lay down concrete efforts to make the industry more efficient and reduce logistics costs. (fmb)

State firms in logistics, tourism sector 'did well'

The Jakarta Post, Jakarta

The performance of a total 31 state-owned companies in the logistics and tourism sectors showed encouraging progress last year in earnings and profits, a senior official said.

Total revenues rose by 14.7 percent to Rp 40.4 trillion (about US$4.3 billion) in 2007 from Rp 34.4 trillion in 2006. In 2005, the companies posted Rp 32.3 trillion in revenue, according to Harry Susetyo Nugroho, deputy to the state minister of state enterprises.

In profits, the companies increased to Rp 3.2 trillion in 2007 from Rp 2.4 trillion in 2006, Harry told a hearing with the House of Representatives' Commission VI on industry, investment, SMEs and state enterprises.

The companies made Rp 2.5 trillion in profit in 2005.

Contributing the highest to increased revenue and profit were mainly companies like national flag carrier PT Garuda Indonesia Airline and shipping firm PT Pelni, which were both in the red in previous years but bounced back to return to the black in 2007.

Garuda posted a profit of Rp 250 billion in 2007 after a loss of Rp 197 billion in 2006 and Rp 588 billion in 2005. Pelni made Rp 88 billion last year in profit, after suffering a loss of Rp 127.8 billion in 2005.

In addition, Harry said, Garuda and another state carrier PT Merpati Nusantara Airlines received capital injections from the government worth Rp 1 trillion and Rp 450 billion, respectively.

"As for Garuda, the Rp 1 trillion funds have not been used as its performance is improving," said Harry on Thursday.

Merpati had used Rp 290 billion of the money for maintenance works and debts payments.

"Merpati failed to meet its target on improving its cash flow, so we plan to reevaluate the target this year," said Harry.

Elsewhere, the government restructured heavy machinery company PT Rukindo's management in early 2006 and made state-owned sea-port operators PT Pelindo I, PT Pelindo II, PT Pelindo III and PT Pelindo IV its foster parent companies, he said.

"All four Pelindo companies last year gave Rp 80 billion to Rukindo to support its working capital."

To improve the performance of state-owned hotel group PT Hotel Indonesia Natour (HIN), the government negotiated with Djarum Group to refurbish one of HIN's hotels, the iconic Hotel Indonesia.

Hotel Indonesia, located in Central Jakarta near the famous circle intersection called Bunderan HI (Hotel Indonesia), was the first hotel in the country.

Harry said starting in 2004 Djarum Group had leased Hotel Indonesia's complex on 6.2 hectares of land for 30 years to build an integrated commercial center named Grand Indonesia.

Commenting on the government's action on improving its hotels business, the chairman of the commission Didiek J. Rachbini suggested the government privatize the hotel group.

"I suggest the government focus on the transportation businesses, such as Garuda, instead of hotels. Private companies do better on hotels, so leave the business to them," he added without elaborating. (nkn)

Jambi to cooperate with JICA to improve river transportation

Jambi, Sumatra (ANTARA News) - The Jambi provincial transportation office in cooperation with the Japan International Cooperation Agency (JICA) is planning to implement a river transportation improvement program, a local official said.

River transportation improvement is one of the priorities in Jambi`s five-year development plan, Darma, the local official, said here on Tuesday.

The Batanghari River stretching 1,400 km long in Jambi is being used to transport people as well as goods such as oil palm and coal, he said.

Experts to gather in Jakarta to discuss RI transportation woes

Abdul Khalik, The Jakarta Post, Jakarta

Transportation businesspeople and planners from China, Britain, Malaysia and Japan will attend a conference in Jakarta from Wednesday to Friday to discuss how Indonesia can solve its land, air and sea transportation problems.

The three-day international conference and exhibition, which is slated to be opened by Vice President Jusuf Kalla at the Jakarta Convention Center, will discuss infrastructure issues on Wednesday, transportation problems on Thursday and logistics on Friday.

Kalla will deliver the keynote speech at the opening of the conference, titled "Indonesian Transportation & Logistics Excellence: Enhancing Industry Competitiveness".

"We have had a series of problems in the transportation sector recently. Beside, as a venue for extending business ties in the transportation sector, we hope our businesspeople and officials can draw lessons from these events," said HM Syukur Sakka, president director of PT Wahyu Promo Citra, which is organizing the conference.

A series of air, land and sea accidents in the country have claimed hundreds of lives, drawing heavy criticism of the country's transportation management system.

The European Union has banned Indonesian carriers from flying into its member states, and has advised citizens in the EU from using Indonesian carriers.

China Railway Engineering Group president Li Changli, British Port & Terminal Group director Ken Gibbons, En N Sankunny of AGM Logistics Northport Malaysia, Ryuichi Yoshimoto of Japan Institute for Logistics System and Tetsuo Shibata of Japan External Trade Organization are among the international experts and businesspeople scheduled to speak during the conference.

Indonesian officials, including Transportation Minister Djusman Syafii Djamal, director general for sea transportation Harijogi, director general for land transportation Iskandar Abu Bakar and director general for air transportation Budi Mulyawan Suyitno, will share their experiences in dealing with the country's transportation problems.

There will also be an exhibition of the latest technology in the transportation sector.

"Some 65 international and local transportation and logistics companies have confirmed their participation in the expo so far," Syukur said.

TNT Express Indonesia to focus on growing European market

The Jakarta Post, Jakarta

TNT Express Indonesia, a top business-to-business express carrier firm, has launched a Euro Expert program under its TNT Economy Express service to expand business and focus on the European market.

TNT Express Indonesia director Peter Langley said in a statement that the program was aimed at encouraging more customers to use TNT Economy Express, which offers an economical alternative for less urgent shipments.

He added that shipments could contain items ranging in weight from 20 kg up to 500 kg, such as heavyweight electronics, automotive and computing equipment to textiles and fragile life science goods.

"As the trade between Indonesia and EU looks set to grow further and expand into various sectors, the launch of TNT's Euro Expert Economy Express offers enhanced connectivity, efficient and reliable economy services," Langley said.

Currently, the EU is Indonesia's second largest trading partner after Japan.

TNT Express Indonesia, which started its business in 1979 under the name of PT Skypak International, now has more than 17 branch offices, 14 agents and 600 staff, and operates through six gateways -- Jakarta, Surabaya, Denpasar, Balikpapan, Medan and Batam.

Ban on RI`s flights to EU not to affect airborne-exports

Jakarta (ANTARA News) - The ban on Indonesian airlines` flights to the European Union (EU) will have no impact on the country`s airborne-exports to the region as exporters have so far used foreign airlines, an executive said.

"So far, we have used foreign airlines` services," Chief of the Indonesian Exporters Association Benny Soetrisno said here Friday.

Benny said many exporters had used foreign airlines since the national flag-carrier Garuda Indonesia ceased its scheduled flights to European destinations a few years ago.

Meanwhile, Chairman of the Indonesian Furniture Producers Association (Asmindo) Ambar Tjahjono feared that the ban would reduce the number of Europeans going to Indonesia to buy their products, and this situation may eventually reduce furniture exports to Europe.

"The impact may be felt in the next few months," he said.

He said furniture buyers used to visiting the factories to see for themselves the products they would buy.

The ban will become official when the European Commission endorses its experts` recommendation on July 6 by adding the Indonesian airlines to EU`s list of unsafe airline companies.

The EU is Indonesia`s fourth biggest market for its exports after Japan, the United States and Singapore.

Last year, Indonesia`s exports to the region reached US$1.07 billion.

Nestle Indonesia renews warehousing and distribution contract with GAC Samudera Logistics

AMEinfo

GAC Samudera Logistics (GSL), a joint venture between UAE-based GAC and Samudera Indonesia Group, has announced its contract renewal with Nestlé Indonesia to manage the international food and beverage company's warehousing and distribution needs in the country.

Nestle has a long-standing relationship with GAC, going back to over a decade ago in the Middle East when GAC built the first third party logistics facility in the Gulf, now a fully-fledged GAC Logistics Park - from which GAC is still handling Nestle's regional supply chain requirements today.

Under the continuing arrangement, GSL will manage Nestlé's West Java, South Sumatra and West Kalimantan storage and inventory management requirements. As Nestlé has witnessed substantial volume growth and increasing distribution complexities since the existing agreement started in June 2005, GSL is now preparing for a more extensive scope of work for the global brand.

GSL Managing Director Kaare Thuesen says this new long-term exclusive contract is a boost to GSL's expanding logistics operations. The company recently invested USD4.4 million to expand its state-of-the art multi-user distribution centre in Lippo Cikarang in the Bekasi district, east of Jakarta. The extended facility will occupy a total of 9,000 square metres and offer an additional 12,000 pallet positions, increasing the current pallet capacity to 34,000.

He adds: 'We are confident that our expanded facilities at the distribution centre in Lippo Cikarang, coupled with our proven warehouse management techniques and advanced IT capabilities, will enable us to enhance Nestlé's supply chain and allow us to play an even bigger role in supporting their planned business growth.'

Nestlé Indonesia's Supply Chain Director, Wisman Djaja says: 'The Distribution Centre is strategic to our business. It is one of the key enablers for Nestlé Indonesia in its endeavour to provide the best service to its valuable customers. Most of our fast-growing modern channel customers are served from this DC. I am happy to see that GSL has been investing in training and development to grow talent, an important complementary to its excellent infrastructure. After all, talented employees set a company apart from its peers.'

Indonesia Not Ready to Face Aviation Liberalization

Tuesday, 08 May, 2007 | 12:22 WIB

TEMPO Interactive, Jakarta: Indonesia is regarded as not being ready to face the Association of Southeast Asian Nations ASEAN aviation liberalization for cargo in 2008. “Our aircraft for air cargo are still limited, so the (liberalization) is beneficial for foreigners,” Deputy Chairman of Indonesian Forwarder and Expedition Association, Iskandar Zulkarnain, last Thursday (3/5), told Tempo in Jakarta.

According to Iskandar, with liberalization, foreign aircraft are given the right to carry cargo in several cities in Indonesia and disembark in the third country. As a result, air cargo is under the threat of being taken by other country’s cargo aircraft. It is a possibility that the foreign aircraft cooperates with the forwarder and expeditor of the companies of the same country.

He was also concerned that this will make several hub-airports for air cargo in Indonesia inactive, because cargo flight can take goods straight to the location without passing through a hub-airport. Domestic forwarder and expeditor companies will lose the opportunity to distribute goods from small regions to hub-airports. The hub-airports are Jakarta, Surabaya, Makassar, Denpasar and Medan.

However, according to Iskandar, cargo liberalization also has positive effects. “Exporters will be happy,” he said. In the future, exports from Indonesia can cut the costs for they can deliver straight without passing through the hub-airport.

Liberalization for cargo will be put into effect in several cities provided by each ASEAN member. Indonesia provided seven cities: Batam, Balikpapan, Biak, Makassar, Manado, Palembang and Pontianak.

As regards liberalization of passengers, it will be set up among each ASEAN member’s capital city by enacting the Fourth Freedom. This means ASEAN members’ aircraft may embark passengers from a partner country to the country of origin without a capacity limit.

The Indonesia National Air Carriers Association (INACA) also regarded Indonesia as not yet ready in facing aviation liberalization of passengers.

Harun Mahbub