Slice and dice to meet e-commerce shipping needs

The full container load (FCL) is dying, declared IDS Medical Systems North Asia regional md Tommy Lui. With e-commerce worth some $1.9trn at comprising slightly less than 9% of total retail sales globally and predicted to make up 15% by 2020, this is would seem like a debatable claim.

Lui however clarified that these figures are significantly higher in the China market, which was the crux of the discussion on the changing dynamics of supply chain movements into China at the TPM Asia Conference. The corresponding figures for China are 19% currently and will rise to 30% in three years, he pointed out.

The upshot of all this is that consolidation of cargo, less than container load (LCL), free trade zones and distribution centres will be the way forward.

Other factors that will contribute to the rise of smaller parcels of cargo will be the increasing prominence of emerging markets in the sales plans of major exporters, Lui added. The reality of these markets is that many cannot afford to buy in the huge volumes developed markets can. "LCL, small order sizes and diverse geography will be the logistics pattern of the future," Lui said.

Another phenomenon of the modern e-commerce age is the constraint on working capital. The squeeze on inventory, drive for supply chain optimisation will mean smaller but more frequent movement size, Lui predicted.

While not completely agreeing with the demise of the FCL, Dachser Asia Pacific air and sea logistics md Edoardo Podesta agreed that "speed will become even more important" in the supply chain.

Posted 12 October 2017

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Vincent Wee

Hong Kong and SE Asia Correspondent, Seatrade Maritime News