Documentation Brochure - Hamburg Summit

Getting there: Logistical Challenges
Wong Wai Shing, Kerry EAS Logistics Limited, deliveres his impetus speech
Wong Wai Shing praised the chances
of the logistics industry in
China. “The market is there and it is
extremely rosy,” he said, “but unfortunately
roses have thorns.” In other
words, the industry still faces great tasks.
Wong is Joint Managing director of Hong
Kong-based logistics company Kerry EAS
and Vice President of the China International
Freight Forwarders Association. In
his keynote speech at the Hamburg
Summit Wong said that in 2005 the
Chinese logistics market had done 470
Billion US$ of business and that business
was increasing by 25 % per year. “The
potential is enormous,” he said.
The other panellists were also positive
about the prospects. “Logistics in China
is growing more and more important,”
said HSH Nordbank director Peter Rieck.
His bank is the world’s largest ship’s
financer and also does business in the
aviation and railways sectors.
Both Wong and Rieck also stressed
the difficulties of commitment in China,
however. “China is so big, so large. No
company can cover the whole country,”
Wong said. This would require far too
much of an investment, so cooperation
was a must. What is more, the market
was too fragmented. “At the moment
500,000 local companies offer different
kinds of logistics services,” Wong said.
Rieck agreed that efficiency suffered as
a consequence. “In Europe logistics
accounts for about 7 % of the cost of
typical retail goods,” he said. “In China it
is more than 15 %.”
Another important issue was the
inadequate liberalisation of the market.
“In China we have offices at 130 locations
and need a total of 900 licenses to
operate them,” Wong complained.
While inland transport suffers from
poor roads, overburdened Chinese
railways and poor-quality warehousing,
China’s seaports are well developed. A
man who benefits from the boom in
container shipping is Guan Tongxian,
president of Shanghai-based Zhenhua
Port Machinery. He stated that he was
expecting container traffic to continue
to increase in China. “The quality of products
made in China is excellent, and
labour costs are much lower than in,
say, Europe.”
Hapag-Lloyd CEO Michael Behrendt
was very satisfied with conditions in
China. “We have no logistical problems
whatever there,” he said. Since acquiring
CP Ships last year the Hamburgbased
company has been one of the
world’s leading container shipping lines.
“China is the world’s most important
market, not just for us but for all
of container shipping,” he told the
Summit attendees.