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APL Logistics President predicts challenges for Chinese hinterland supply chain

APL Logistics President predicts challenges for Chinese hinterland supply chain

Shenzen: Plans to widen the scope of China's current trade boom from the East coast to the untapped hinterland are likely to face a logistical nightmare, warned Brian Lutt (pictured), president of Neptune Orient Lines subsidiary APL Logistics, speaking at the first Transpacific Maritime Asia Conference in Shenzhen today.

"The main production and consumption zones are still clustered in the east of the country," Lutt said, "so the challenges we face today will be multiplied many times once China's vast hinterland is unlocked. Getting products to market from China quickly, reliably and cost-effectively already keeps logistics providers and their customers up at night."

Although he praised the Chinese Government's ability to plan and invest in infrastructure to keep pace with the skyrocketing growth - particularly its 11th five year plan (2006-2010) that is largely dedicated to road and railway development, Lutt urged the authorities to focus on greater and more precise interconnectivity "with ocean transportation and other value-added logistics services."
During his speech, Lutt said that he believed that China's currently outsourced logistics, worth about $140bn, will grow substantially as the country's supply chain moves further inland. Accordingly he stressed the need for China to draw on the knowledge and expertise of international transportation and logistics players to create a world-class and highly integrated inland transportation system to match its ports.
Outlining several supply chain connectivity strategies currently being implemented in China - such as time-definite ocean-truck services for regular shipments, Lutt said, "Players who have a range of ways to take products from China's interior and transport them quickly to domestic or international destinations, while completing all the value-added logistics services along the way, are set to make the biggest gains."
He concluded his presentation stating that APL Logistics' OceanGuaranteed service, reported to have achieved 98.6% delivery reliability since its launch last year, offers, "a viable airfreight alternative by guaranteeing space and highly synchronising shipping, terminal and truck movements."  [18/09/07]