interview
Business in China is obviously important to you, but will theTollGroupalso continue topursue take-over opportunitieswithin other parts of Asia?
“The Chinamarket should be farmore important than it is at the moment. China is one of the world’s most important growth engines and demand for consumer products domestically and internationally is an important part of that expansion.We had been treading water in our joint venture in China andwe have felt for some time thatwe had either to growour business in the country by acquiring the 49 percent of ST-Anda that we didn’t own or selling back our share. We are now 100 percent in control of that business and are very confident that we can push forward quite aggressively and growthe quality and size of the business.”
Were the recent acquisitions in the UK ofWT Sea Air Group and Genesis Forwarding Group part of a strategy to expandToll's global presence bymoving into this area as a hubmarket, or was it to improve the company’s links between Asia and Europe?
“We believe the Asia Pacific region is generally devoid of good global forwarding services. The global forwarders who are already in place in that region are there to flesh out their global networks rather than to despatch goods fromAsia. “To build that sort of forwarding business, I believe it is
going to be more effective to acquire businesses at the destination of goods rather than at origin. In the freight forwarding business, decisions aremade at the point of destination andwe have therefore been able to build up our business out of China by acquiring businesses in the UK, theMiddle East and in the US. “We will do a lotmore than land the goods in the UK,
we want to operate warehousing and offer intra- European transportation … an integrated service offering. I think there is a real opportunity for us to grow the business in that part of the world.”
Air freight rates have soared as carriers remain slow to reintroduce capacity. A strong air freight market able to provide the marketplace with reliable
The China market should be farmore important than it is at the moment.”
services is important to the freight forwarder, but can the end-consumer learn to pay the price required?
“I think there is nowadays a real hard-core understanding of the cost of shipping goods by air and the cost of shipping goods by sea. It is a very conscious decision… there will be more companies requiring air freight and the customer that requires air freight services is the sort of customer that is going to pay up for the service levels that air freight provides.”
Are there lessons to be learned from the downturn and as business returns tomore normal conditions, will some of the cost-cutting measures remain in place?
I don’t think there is any doubt that an efficient organisation will have emerged from the downturn leaner and stronger. Some will hang around until the next fullmarket and then they’ll forget about the lessons they have learned, but I seriously hope not. “The smarter companieswill be the oneswho utilise IT
and can guarantee transit times, freight tracking and all the other thing that are sought after in terms of service levels. I think we’ll see a greatermove to outsourcing.”
AIR LOGISTICSCHINA 19
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