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Category: Logistics

Retail News Asia is committed to providing both local and global retailers with the latest Logistics news throughout the Asian market. This on a daily base.

  • DB Schenker celebrates 30th anniversary in Vietnam

    DB Schenker celebrates 30th anniversary in Vietnam

    DB Schenker has opened a new office in Vietnam to mark 30 years of orchestrating the logistics industry in the country.

    A ceremony took place on Nov. 23 to celebrate the 30th anniversary of DB Schenker in Vietnam and the opening of its new corporate office at the Viettel Complex Tower A in Cach Mang Thang 8 Street, District 10, Ho Chi Minh City.

    Commenting on the event, Andy Lim, CEO of DB Schenker in Vietnam, said: “We are proud and grateful to be one of the main logistics providers in the country today and to play such an important role during the pandemic when the market conditions we operate in continue to be disruptive and far from normal. Our logistics experts have been working hard to keep the supply chains moving and helping to deliver essential goods across the country via land, air and ocean, as well as by continuing to provide warehousing activities.”

    Josefine Wallat, Consul General of Germany in Ho Chi Minh City, expressed her delight at seeing a German company operating for a long time and constantly growing in Vietnam. “The pandemic has been a challenge worldwide for everyone, including German companies in Vietnam. But I trust that companies in Vietnam will come out of this challenge faster than others. What we are seeing at the moment is just a setback and Vietnam will be back on track very, very quickly,” she said.

    During the pandemic, provinces and cities went into lockdown, air and ocean carriers were restricted to a few cargo freighters a week due to port control and commercial flights ceased operation. Strict preventive and control measures caused delivery delays and cost of shipping increased to historical heights.

    “At first, we thought the pandemic would have a tremendous impact on our business, but things were actually different. Covid-19 has highlighted the urgency of the need for smooth transportation of goods more than ever. It is a challenge but also an opportunity for DB Schenker to showcase our capability and adaptability during such critical times,” said Lim.

    All key services provided by DB Schenker, including Air, Ocean, Contract Logistics and Land Transport, were in full operation during the pandemic.

    Hundreds of warehouse employees have been away from their families for many months. Customer service representatives worked around the clock, including weekends, regardless of time zone differences. Drivers were required to get tested for Covid-19 every 72 hours and had to wear personal protective equipment (PPE) while making deliveries. Most of DB Schenker employees have been working from home during the pandemic. However, there were also colleagues who had to come to the office, spent time on the road for deliveries, or stayed on site in the warehouses.

    To meet customer demand during this critical period, DB Schenker had to adapt and come up with logistics and supply chain alternatives to keep the business of its customers moving. The company also had to manage escalating fuel costs, price increases for Air and Ocean and invest in health and safety measures for the employees.

    In 1991, DB Schenker was one of the first international logistics companies entering Vietnam. From one representative office in Ho Chi Minh City with only three employees, DB Schenker now has over 1,000 employees, more than 100,000 square meters of warehouse space and 21 offices and warehouses across the country with key ground operations at key ports and terminals.

    The company’s growth is in line with the massive expansion of Vietnam’s logistics industry. “Information technology and innovation are the key drivers of the Vietnamese freight and logistics market. Today’s industrial parks have the highest security, environmental and health standards in place. We continue to develop and introduce new technologies to provide the best supply chain experience to our customers and make DB Schenker their first choice,” said Lim.

    After 30 years, DB Schenker has grown to become one of Vietnam’s leading logistics and forwarding service providers and a strategic partner to many air and ocean carriers. The company not only transports goods via air and ocean but also provides domestic land services and offers an efficient LANDbridge cross-border trucking solution connecting Singapore, Malaysia, Thailand, Cambodia, Laos, Myanmar, and China.

    This year, DB Schenker in Vietnam also started offering rail services between Ho Chi Minh City and Hanoi, in addition to the existing EurAsia LANDbridge Rail service. The EurAsia LANDbridge Rail service is an alternative for the transportation of goods between Europe and Southeast Asia.

  • Vietnam shipping company begins service to Malaysia, India

    Vietnam shipping company begins service to Malaysia, India

    The Vietnam Maritime Corporation has launched a container shipping route to Malaysia and India.

    The route from Vietnam’s Hai Phong Port to Malaysia’s Port Klang, India’s Calcutta, Port Klang, and SP-ITC International Container Terminal in HCMC takes 10 days less than foreign shippers’ itineraries, VIMC said.

    It is the first time Vietnamese container ships are sailing through the Malacca Strait to the Indian Ocean to transport cargo to Malaysia and India, both large import and export markets for goods and raw materials for Vietnamese enterprises.

    VIMC said it plans to expand its large-tonnage container ship fleet and operations in the region as well as globally.

    Amid the Covid-19 outbreak, Vietnam’s importers and exporters have been hit by the high freight rates demanded by foreign shipping lines and finding it hard to book their services.

    Freight rates to Europe and North America have surged by four to eight times to around $20,000 for a 40-foot container.

    Many Vietnamese shipping companies saw profits surge in the third quarter as a result of the rising freight rates.

    VIMC reported revenues of VND4.127 trillion ($179.4 million), up 71 percent year-on-year, and profits of VND760 billion, compared to a loss of nearly VND30 billion in the same quarter last year.

    According to the Vietnam Maritime Administration, the country’s ports handled over 535 million tons of cargo in the first nine months of this year, a year-on-year rise of 3 percent.

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  • Cold storage rent soars as supply dwindles

    Cold storage rent soars as supply dwindles

    Rent for cold storage in the south stands at $87 per ton in Q4, up 1.67 times against Q1 last year due to limited availability.

    Vietnam’s e-commerce boom amid the Covid-19 outbreak has fueled demand for cold storage facilities, according to the latest report on the cold supply chain released by real estate consultancy Savills Vietnam.

    According to the cold storage warehouse report by real estate services provider JLL, more consumers have opted for online shopping during Covid-19, leading to bigger demand for cold storage warehouses mainly located in the south and managed by medium- and small-sized suppliers. Foreign investors currently hold a share of some 60 percent in the local cold storage market.

    Trang Bui, JLL senior director in charge of the Vietnamese market, predicted demand for cold storage warehouses would increase sharply in the next five years, opening opportunities for investors.

    The country currently has a meager 48 cold storage warehouses with some 600,000 shelves, and over 700 refrigerated trucks.

    The local cold storage warehouse market is projected to annually grow 12 percent to reach $295 million in 2025, stated Savills Vietnam.

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  • J&T Express Singapore expands its warehouse network to support growing demand

    J&T Express Singapore expands its warehouse network to support growing demand

    As part of its ongoing commitment to provide efficient, secure, and quality express services amid the growing demand for domestic and international delivery, J&T Express Singapore today announced the opening of two new warehouses in Singapore at Changi Airfreight Center and Penjuru.

    A first for J&T Express, the strategic location of the new warehouse at Changi Airfreight Center is part of J&T Express’ expansion plans to offer quality international delivery services to customers locally and regionally. The new warehouse will help to improve the processes and flow of international parcels between the airport and the sorting hubs. It will also allow J&T Express to provide tighter control and a higher service level for the delivery of international parcels.

    The warehouse at Changi Airfreight Center will also serve as a strategic hub for transhipment within the J&T network including Singapore, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, and China. The new warehouse will help optimise the shipping lane planning and lower operational costs through greater collaborations within J&T Express’ global network, in turn ensuring greater efficiency and security in the transit of parcels from these countries.

    As part of its strategy to develop a nationwide warehouse network and to strengthen its position as a one-stop e-commerce solutions provider, J&T Express has also unveiled a new fulfilment centre at Penjuru to meet the growing demand for e-commerce warehousing solutions within Singapore. The 82,000 square feet fulfilment centre will enable J&T Express to onboard more fulfilment clients with a seamless e-commerce experience.

    In line with J&T Express’ ongoing digitalisation efforts, the new fulfilment centre will also be equipped with an integrated e-commerce warehouse management system (eWMS) to optimise the fulfilment management from inventory and orders to transport flows and last-mile deliveries. As a one-stop e-commerce specialist, J&T Express also looks to increase employee headcount to support fulfilment operations and data analysis to cater for the growing demand driven by the e-commerce boom.

    Complementing its expansion efforts, J&T Express also announced its first wave of J&T points across Singapore, which is currently available to both its VIP and selected e-commerce platform sellers to support the upcoming Single’s Day shopping festival. The J&T points aim to provide sellers with greater flexibility when making shipping arrangements by enabling them to drop off parcels at their own convenience and receive real-time tracking.

    The island-wide network of service points will also support J&T Express in handling the anticipated year-end delivery spikes with greater efficiency. J&T Express will look to expand access to more users, and gradually establish more service points across the country.

    Commenting on the recent milestones, Andrew Sim, CEO of J&T Express Singapore, said that these developments not only reflect the company’s commitment to drive service excellence in the logistics industry, but also strengthening J&T Express’ position as a one-stop e-Commerce specialist across each and every touchpoint across the value chain.

    Mr Sim added, “Singapore is an exciting growth market for J&T Express, and we are focused on building our business in the country due to its strategic location within Southeast Asia. At J&T Express, we are committed to providing efficient, secure, and quality express services to our customers and the expansion of our network of warehouses in Singapore and the launch of J&T points will help us to build stronger relationships with our customers and enable us to meet the growing demand for domestic and international delivery not only in Singapore but also across the region.”

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  • European business sentiment inches up

    European business sentiment inches up

    The Business Climate Index of European companies rose 3 percentage points to 18.3 in Q3, showing improving perceptions on Vietnam’s economic outlook.

    The rise from the historic low of 15 points in September came as business leaders were more optimistic about Vietnam’s business environment as the country relaxed social distancing measures and aimed toward a new normal, according to a survey of European businesses by EuroCham.

    Forty-nine percent of business leaders and investors predicted a stabilizing and improving economic outlook next quarter, compared to less than 19 percent in the second quarter.

    “With the pandemic now back under control in Vietnam, the confidence and optimism of European business leaders should continue to climb as companies get back to normal and consumer confidence rises,” said EuroCham chairman Alain Cany.

    However, despite this positive progress, business leaders are still encountering challenges in their commercial operations, he added.

    Sixty-six percent of businesses were affected by staff leaving work after the fourth wave lockdown.

    Thirty-nine percent of respondents said they saw a reduction in operations after reopening.

    Prolonged international travel restrictions affected almost two-thirds of European businesses in Vietnam.

    The online survey polled 154 executives of European companies in Vietnam.

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  • Shipping firms post profit surge

    Shipping firms post profit surge

    Many shipping companies have posted a year-on-year surge in profits in Q3, driven primarily by higher freight rates.

    The Vietnam Maritime Corporation (VIMC) has recorded third-quarter revenues of VND4.127 trillion ($179.4 million), up 71 percent year-on-year, and profits of VND760 billion, compared to nearly VND30 billion in losses during the same period last year.

    The VIMC’s ocean shipping operations transported over 18 million tons of cargo and earned profits of more than VND380 billion.

    The Vietnam Ocean Shipping Joint Stock Company (Vosco), a VIMC affiliate, posted a net profit of nearly VND186 billion in Q3, against net losses of over VND21 billion in the same period last year. Vosco’s total profits in the first nine months rose to VND409 billion, against losses of more than VND139 billion during the same period last year.

    Another VIMC affiliate, the Transport and Trading Services Joint Stock Company (Transco), recorded profits of VND9 billion in Q3, up from VND326 million in the same period last year.

    Meanwhile, Hai An Transport and Stevedoring Joint Stock Company (HAH) made net profits of VND476 billion, up 65 percent, and after-tax profit of over VND100 billion, up 370 percent on-year, the highest profit hike since it became a listed firm in 2014.

    In the first nine months of this year, HAH recorded net revenues of VND1.284 trillion and after-tax profits of VND284 billion, up 50 percent and double year-on-year, respectively.

    A surge in freight rates has been the main contributor to the profit surge, market observers say. The average cost for transporting a standard container from China to the West Coast of the U.S. is $20,586, nearly double that of July and double that of January, Fox Business reported.

    With Covid-19 outbreaks easing in many big economies, import and export activities are surging, and Vietnam is benefiting from the free trade agreements it has signed.

    According to the Vietnam Maritime Administration, seaports nationwide handled over 535 million tons of cargo in the first nine months of this year, a year-on-year rise of 3 percent.

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  • ZIM buys 7 ships in move from charters to owning vessels

    ZIM buys 7 ships in move from charters to owning vessels

    In a clear move away from chartering to owning ships, Israeli carrier ZIM Integrated Shipping Services announced the acquisition of seven secondhand vessels – five 4,250 TEU vessels and two 1,100 TEU vessels – for a consideration of approximately $320 million.

    “Since going public our focus has been to allocate capital to strengthen our commercial prospects and create long-term shareholder value,” Eli Glickman, ZIM President & CEO, said. “With the opportunistic acquisition of these much-needed vessels, we have drawn on our strong cash position and our agile approach to maintain and expand our operating fleet to meet growing customer demand, while remaining committed to delivering industry superior profitability.”

    Glickman said ZIM will continue to complement the primary strategy of chartering in the vast majority of vessels by selectively acquiring second-hand tonnage.

    ZIM had earlier this month announced the launch of Ship4wd, a digital freight forwarding platform to offer end-to-end shipping solutions.

    NYSE-listed ZIM had reported a revenue of $4.1 billion for the first half of 2021, an increase of over 150 percent from $1.6 billion in the corresponding period of 2020. Net income had zoomed to $1.5 billion from $13 million.

    For the second quarter, ZIM had reported a revenue of $2.4 billion and net income of $888 million. ZIM carried 921,000 TEUs in the second quarter of 2021, a year-over-year increase of 44 percent. Average freight rate ($/TEU) more than doubled in Q2 to $2,341 from $1,071. For the first half of the year, the average freight rate ($/TEU) nearly doubled to $2,145 from 1,081.

    “Our outlook for the remainder of 2021 and into 2022 is very positive and we are excited about our strategy to further enhance our position as an innovative digital leader of seaborne transportation and logistics services,” Glickman had said while announcing the results.

    ZIM is expecting second-half 2021 results to exceed first-half results.

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  • Singaporean logistics unicorn eyes Vietnam as key expansion market

    Singaporean logistics unicorn eyes Vietnam as key expansion market

    Ninja Van, a Singaporean logistics startup and new ASEAN unicorn, is set to drive a broad strategy in Vietnam to benefit from the country’s strong e-logistics market growth.

    After successfully raising $578 million in Series E funding, Ninja Van has officially become an ASEAN “unicorn,”.Dzung Phan, president of Ninja Van, said while revealing the startup’s expansion plans for Vietnam and his assessment of its e-logistics market.

    Why did Ninja Van choose Vietnam as a key investment market?

    We believe Vietnam is ready for a new phase of growth in e-logistics. According to Agility, Vietnam ranks 8th among the top world’s fastest-growing logistics markets and 3rd among ASEAN in 2021. Vietnam E-commerce Association (VECOM) also stated the number of postal parcels sent through express delivery services shot up by 47 percent last year.

    Also, e-logistics is strongly driven by the rapid growth of e-commerce. Vietnam’s e-commerce market expanded an average of 30 percent per annum during the period 2016-2019, from $4 billion (2015) to $11.5 billion (2019). According to VECOM, the market will grow at 29 percent annually in 2020-2025, to reach $52 billion (2025).

    The strong potential of Vietnam’s e-logistics market is a good foundation for our ambitious plan. A market with 600,000 sellers and 49.3 million buyers across e-commerce platforms and social networks will generate significant demand for logistics.

    Leading a new unicorn in the e-logistics industry, how do you assess its competitive advantage in Vietnam?

    The domestic e-logistics market is competitive with several “deep pocket” players. The market comprises three main segments: local shipping companies, international shipping companies, and e-commerce platforms with their own in-house shipping ecosystems.

    Domestic enterprises only account for 20 percent of the logistics market share; the remaining 80 percent belongs to international firms with strengths in capital, technology, and experience. Local firms may be backed by international groups, including GHTK by Kerry and AhaMove by Temasek.

    Although the e-logistics market is vibrant, its growth potential is not fully invested in. A survey showed that 60 percent of sellers and 80 percent of buyers are not satisfied with the current quality of express delivery services. Buyers are frustrated by late delivery or the inability to track the flow, while sellers expect more parcels to be delivered.

    Is pricing a major competitive edge in the current e-logistics market?

    Except for the inhouse shipping units of e-commerce platforms, domestic and international players are using price competitiveness to acquire customers quickly. Whenever there is a “newcomer”, delivery costs will drop significantly to maintain the market share and retain customers. Notable discounts were given at the entry of J&T in 2018 and Best in 2020.

    The average shipping price in the Vietnam market fell continuously by 15-20 percent per year from 2017 to 2020. The trend has a negative impact on smaller domestic players, for example, GNN in 2017 suffered a sharp drop in revenue that led to its liquidation. Even international players without strong financial support cannot survive this market, with DHL e-commerce ceasing operations in Vietnam during 2021.

    How does Ninja Van improve the customer experience? Ninja Van focuses on providing a quality and authentic service experience to customers, rather than on pricing alone. Parcel tracking and recovery services for lost or damaged parcels need to be improved.

    Given a tech-enabled personalization of the customer experience, Ninja Van’s nationwide personal delivery service on the Grab app has stepped up during the Covid-19 pandemic. Additionally, we are strengthening our partnership with e-commerce giants including Shopee, Lazada, Tiki, and Sendo.

    With more than 300,000 orders per day, Ninja Van is among the top three partners on all major platforms in Vietnam. These collaborations brought Ninja Van into the top growth 15 companies in the Asia-Pacific region in 2021 as reported by Financial Times.

    To gain trust, we do all possible to help our customers succeed, such as ensuring timely pickup, prompt delivery without loss. In addition, we understand that our partners are working at a large scale, so we do our utmost to optimize our cost structure and provide an attractive rate.

    As a result, we became the most active provider by offering various value-added services, such as return pickup to Lazada, bulky and super bulky delivery for Tiki, or installation services for Shopee.

    With an additional $578 million in Series E, what is the level of ambition in terms of your expansion strategy?

    – Ninja Van is committed to driving a broad strategy in Vietnam in particular and in ASEAN in general. This strategy will cover all three sectors: operations, technical systems, ecosystems for small and retail customers.

    Specifically, Ninja Van will increase its coverage in 63 cities and provinces to reach 100 percent of the Vietnamese population. We will also prepare an automatic sorting system with a capacity of two million packages at five major cities to increase delivery speed.

    We will build and improve web and mobile application platforms to enhance customer experience. We seek to enable both sellers and buyers to track parcels and make inquiries in real-time.

    Notably, we will broaden our cross-border delivery with two new services: Ninja Direct, which helps Vietnamese sellers look for better sourcing with better rates in multiple countries; and Ninja Crossborder, which helps Vietnamese manufacturers reach out to buyers all over the world.

    Moreover, we will complete business activities for the fourth quarter of 2021. For example, based on our big data analytics, we have opened training courses to detect anomalies and outliers to provide timely resolutions for all customers. In 2020, we created 40 different training modules for our shippers and warehouse staff to avoid recalcitrant buyer behavior on COD free delivery services.

    Ninja Van will launch a promotional campaign in Vietnam “Giao thong suot, Nhan ven nguyen” (Smooth delivery, Parcel intact) to support sellers in the fourth quarter. With all staff vaccinated against Covid-19, Ninja Van will maintain its service delivery price during the pandemic to support hard-hit customers.

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  • Amazon, Ikea commit to using zero-carbon shipping fuels by 2040

    Amazon, Ikea commit to using zero-carbon shipping fuels by 2040

    Nine big companies including Amazon, Ikea and Unilever have signed up to a pledge to only move cargo on ships using zero-carbon fuel by 2040.

    They hope the “aggressive” target will push the heavily polluting shipping industry to decarbonize faster.

    Cargo shipping produces one billion tonnes of climate pollution each year – as much as the country of Germany.

    But critics say shipping firms are not doing enough to meet Paris Agreement goals on emissions.

    The Aspen Institute – the non-governmental Organization coordinating the campaign – expects other retailers and manufacturers that rely on maritime shipping to sign up.

    “Maritime shipping, like all sectors of the global economy, needs to decarbonize rapidly if we are to solve the climate crisis, and multinational companies will be key actors in catalyzing a clean energy transition,” said president Dan Porterfield.

    “We urge other cargo owners, value chain actors, and governments to join forces with us.”

    The companies pledging zero-carbon shipping by 2040 are:

    • Amazon
    • Brooks Running
    • Frog Bikes
    • Ikea
    • Inditex (owner of Zara)
    • Michelin
    • Patagonia
    • Tchibo
    • Unilever

    With about 90% of world trade moving by sea, maritime shipping accounts for 3% of all global emissions. That could rise to 10% by 2050 if the industry continues to rely on carbon-intensive fuels, experts say.

    The shipping industry also produces 10-to-15% of the world’s manufactured sulfur oxide and nitrous oxide emissions, which can cause respiratory illness.

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  • Vietnam eyes $13.7 billion port upgrade to boost trade

    Vietnam eyes $13.7 billion port upgrade to boost trade

    Vietnam needs VND313 trillion ($13.77 billion) by 2030 to upgrade and optimize its port system to reduce dependency on road transportation and boost trade.

    There will be two special graded terminals: Nam Do Son in the northern city of Hai Phong and Cai Mep in the southern province of Ba Ria-Vung Tau, according to a government plan for the 2021-2030 period with a vision until 2050.

    These terminals will act as international hubs for Vietnamese goods to be transported directly to Europe and the U.S. (the two biggest export markets) so businesses no longer need to send their goods to intermediate hubs in other countries.

    The remaining 34 ports will be divided into three categories: tier 1, 2 and 3, depending on their capacity and location.

    Special graded and tier 1 ports will be connected with smaller ports by newly prioritized railways and roads.

    The smallest ports located deep inland will be removed.

    Deputy Minister of Transport Nguyen Xuan Sang said the new plan will focus on developing a shipping route between localities instead of relying on roads.

    For example, Chinese imports could be shipped to Quang Ninh ports in the north and then to other localities along the coast, instead of being transported via road as in the current case.

    “Our country has a long coastline, why do we need to use roads while we can use sea routes?” he said, adding that on average shipping costs are lower than road delivery.

    The use of ports would also lower logistics costs and reduce pressure on roads, which would increase transport safety.

    The majority, around 95 percent, of funding for this plan will come from private companies and other legal sources, according to the transport ministry.

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  • Korean firms to use petrol stations as logistics hubs

    Korean firms to use petrol stations as logistics hubs

    With the expansion of the ‘quick commerce market’, which offers guaranteed delivery within an hour, South Korean firms are employing gas stations as warehouses and logistics hubs.

    It has become a new alignment of interest between the quick commerce industry that needs logistics hubs in the heart of the city, and gas stations in search of a breakthrough as they struggle from dwindling sales with the emergence of eco-friendly cars.

    Shinsegae Property, property development unit of retail giant Shinsegae Group, signed an agreement with Koramco Energy Plus REITs to begin the development of gas station sites. The plan is to turn idle spaces at 187 gas stations owned by REITs into logistics hubs.

    Major logistics company CJ Logistics also signed an agreement with oil refinery and gas station operator SK Energy late last month to use their gas stations as logistics hubs.

    The plan is to set up small to medium-sized warehouses at these gas stations to keep stock of popular consumer goods to ship them out as soon as an order is placed.

    GS Caltex, South Korea’s second-largest refiner by sales, teamed up with local food delivery firm Mesh Korea last year to come up with plans for establishing logistics hubs at gas stations nationwide that will focus on short-range deliveries.

    This trend is partially the result of gas stations struggling to remain profitable. There were 11,290 gas stations in South Korea as of May and 109 gas stations had closed down in the first five months of the year, according to the Korea Oil Station Association.

    The Korea Energy Economics Institute said in a report published in January that number of gas stations in the country has been shrinking by an average of 1.3 per cent annually in the last 10 years, claiming that only 3,000 gas stations will be operational by 2040.

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  • German companies in Vietnam look to diversify supply chain due to Covid

    German companies in Vietnam look to diversify supply chain due to Covid

    Ninety percent of German companies in Vietnam are seeking new or additional suppliers in Asia Pacific due to mobility restrictions in the country.

    The majority of respondents, 83 percent, reported supply bottlenecks and price increases caused by transport problems, according to a survey by the Association of German Chambers of Industry and Commerce (DIHK).

    What has led to the current transport problems is a lack of freight capacity and containers.

    Other issues that caused supply bottlenecks are increased demand or insufficient production capacity (67 percent) and halted supplier production (58 percent).

    The impacts of supply bottlenecks on German companies are longer waiting times, higher purchase prices, and production halts or downsizing, according to 58 percent of respondents.

    Half of the respondents have no choice but to either increase or plan to increase the manufacturing prices of their products.

    Two-thirds of German companies are also considering relocating their production to the E.U.

    The Vietnam survey is part of the global inquiry by DIHK, which polled 3,000 business leaders from Jul. 22 to Aug. 9.

  • AusPost secures record revenue

    AusPost secures record revenue

    Australia Post has announced its group revenue of $7.499 million, a new record up seven percent, and a profit before tax of $53.6 million. The Group credits its revenue was boosted by further eCommerce growth during COVID-19.

    Growth in e-commerce has been a strong driver behind Australia’s Post 2020 financial result that was released on Thursday, August 27.

    While total revenue grew by more than $500 million during the period, boosted by a boom in e-commerce, growing losses in the letters business and increased network costs resulted in a profit before tax result up only $13 million compared to FY19.

    Australia Post’s parcel and services revenue at $5.503 million was up 15 percent, adding $729 million to the full-year result, highlighting that 73 percent of total revenue is now generated from highly competitive markets.

    Domestic Australia Post branded parcels rose 25 percent to $2,456 million. In the second half of the year parcel revenues were boosted by the continued growth of eCommerce as consumer demand grew as families adapted to lockdown restrictions and more businesses went online as their physical stores hibernated.

    Costs increased over the period by $477 million including higher operational network costs to support growth in parcels and AP Global, additional processing facilities and chartered air freight to meet customer demands, as well as personal protective equipment for workers.

    Australia Post Group Chief Executive Officer and Managing Director Christine Holgate said the result highlighted the critical need for temporary regulatory relief announced by the Federal Government in April this year, as the business quickly adapts to changes in consumer behavior accelerated by COVID-19.

    “We understand the important role our Posties and Post Offices play in serving Australia.  Protecting their roles, whilst meeting new community and business expectations, is critical as our business adapts to significant market changes,” Christine stated.

    “And while the growth in eCommerce has been a strong driver behind this year’s financial result, we have had to make changes to ensure our workforce and network can operate as efficiently and safely as possible.”

    Christine said the pandemic has also severely impacted the Group’s ability to deliver across the country on time.

    “We had to make temporary changes, including new parcel pop-up facilities and chartering planes for air freight, to continue to serve the country during what has been a very uncertain year,” she said.

    Letter revenues were $2.0 billion for the period, down $220 million or 10 percent for the full year.

    “Although traditional services such as letters, passports and Billpay fell in the period, due to travel restrictions and as businesses switched to digital communications, parcel revenues grew and have become their most important income source.  Over-the-counter parcel transactions have increased as people looked to send care packages and parcels to stay connected with loved ones through the COVID-19 crisis.”

    Christine said international business has been impacted by global conditions, due to a significant fall in air freight capacity to and from Australia, as well as many countries closing their borders in the second half of the financial year.

    “Although international letters and packets volumes were down 16 percent year on year, the strong performance of AP Global, our cross-border eCommerce business, saw revenue grow by $146 million to $225 million, ensuring our total international portfolio remained strong,” she said.

    Christine highlighted that domestically, the Group’s focus on investment in growing capacity in the parcels network has “served us well”.

    Australia Post opened the largest parcel processing facility in the Southern Hemisphere opening last October in Brisbane.

    “This facility, along with 16 temporary smaller sites, has ensured we were able to support small and large businesses in connecting them with their customers, proudly contributing $2.4 billion in eCommerce economic activity in the fourth quarter,” she said.

    “Of course, this result would not have been possible without the continued hard work and dedication of our people – particularly our posties, delivery drivers, parcel and mail processors, contact center and both corporate and licensed Post Offices teams. They continued to show up for work each and every day through uncertain times and worked hard to ensure the community had sustained access to essential goods and services.”

    The 2020 Annual Report will be tabled in Federal Parliament in October 2020.

  • Alphabet Owned Wing Has Over 100,000 Drone Deliveries In Two Years

    Alphabet Owned Wing Has Over 100,000 Drone Deliveries In Two Years

    Alphabet-owned Wing has said that it will hit a landmark of 100,000 drone deliveries over the weekend. This news comes after two years of the launch of service in the Australian city of Logan which only has 300,000 people. This is happening at a time where there are reports stating that Amazon’s plans of drone deliveries are collapsing. Wing has said that it will be entering new markets in the coming months.

    “I think we’ll expand quite a bit. I think we’ll launch new services in Australia, Finland and the United States in the next six months. The capabilities of the technology are probably ahead of the regulatory permissions right now,” said Jonathan Bass, the comms head at Wing.

    Of all the deliveries more than half were completed in Logan itself in the last eight months. In the first week of August customers have placed orders for over 4,500 deliveries that works out to be one order every 30 seconds during its delivery window. Over 10,000 cups of coffee have been ordered, alongside 1,700 children’s snack packs, 1,200 hot chooks, 2,700 sushi rolls, and 1,000 loaves of bread.

    These drones have a range of 9.6 kms as they are limited by the capacity of their batteries and larger batteries are not possible because that will inhibit their ability to fly. This means the short trips are ideal for food delivery which happens in a package that resembles a McDonalds happy meal. Batteries add weight but apart from that, even parcels add weight, so these drones cannot carry anything more than 1.36 kg. But the system works well with fragile objects like eggs which don’t break.

    The drones cruise at a height of 100 to 150 feet in the air and lower down to about 23 feet when they reach the destination. There is a tether that lowers the package to the ground which is unhooked. No person is required to receive the package, something that Amazon’s solution needed.

  • Fees for transporting goods to HCMC nearly quadruple

    Fees for transporting goods to HCMC nearly quadruple

    Many HCMC residents have reported paying higher fees for transporting goods from their hometowns to the city compared to the pre-Covid period.

    Hoa in Ho Chi Minh City’s Go Vap District said that amid the city’s strict social distancing order, she had recently told relatives in the Central Highlands province of Kon Tum to send her a 15-kilo parcel of groceries including vegetables, meat and fish through an interprovincial coach company.

    The fee for transporting the parcel from Kon Tum to a coach station in HCMC was VND200,000 (nearly $8.77), instead of the typical VND50,000. On arrival, the coach company hired a shipper to transport the parcel to Hoa’s home for VND150,000, instead of VND50,000.

    An in HCMC’s Binh Thanh District said she had to pay total transport fees of VND600,000 for a 20-kilogram parcel sent from Kon Tum to her home in the city. “I have lived in HCMC for 10 years, and have never seen such high transport fees,” she said.

    Traders also have to pay higher fees to interprovincial coach firms. “Sometimes the value of goods is over VND1 million, but the transport fee is nearly half of that,” said Loan, a seafood trader in the central province of Phu Yen.

    Mai, a potato trader in the central highlands region, said transport fees for goods from the region to HCMC have surged four times to VND800,000 from VND200,000. There are fewer interprovincial coaches running between the region and HCMC, so coach firms have increased their fees, she explained.

    Tan Anh Coach Company in Kon Tum said passenger coaches are banned from running to HCMC, so lorries are used to transport goods with longer travel times and larger freights. “In the past, it took vehicles 10-12 hours to run from Kon Tum to HCMC. Now, it takes 18-20 hours. We have to cover Covid tests, and more expensive fuel,” the coach company revealed.

    Coach firms in other provinces, including Phu Yen and Khanh Hoa also said goods-transporting vehicles consume more fuel than passenger coaches.

    Meanwhile, shippers in HCMC explained that tightened social distancing, including travel restrictions, upped transport fees. “Each shipper is allowed to operate in a certain district, passing through many checkpoints,” Thanh from Go Vap District said.

    Ho Chi Minh City has recorded nearly 135,500 local Covid-19 cases since the fourth coronavirus wave hit Vietnam in late April. It is now the country’s pandemic epicenter.

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