FocuS Events
3PL Luncheon
with Havi Logistics
illiam O’Brien, Presi- bers present during the discussion.
W
dent of Havi Logistics “If it’s the price that customers are look-
in Greater Asia, sees ing at, how do you show them your value?”
one major trend in the asked one participant. “Our customers are
world of 3PL services constantly comparing price versus service, as “But I don’t see it working in China.” He
in China. Price is no longer the most im- if these were two opposing concepts.” went on to say that warehouses like Yantian
portant thing to customers. In a recent 3PL O’Brien continued the discussion by ob- failed because of outrageous expectations
luncheon hosted by the Global Supply Chain serving that despite the perceived trend of of land. He also mentioned that places like
Council, O’Brien cited two surveys, one from customers demanding more, there has been Hong Kong should afford huge opportuni-
AT Kearney, the other a joint collaborative no perceivable market impact in terms of ties in terms of warehousing, especially for
between GSCC and FM Logistics. He says infrastructure. In fact, he says it’s moving things like cold storages. “It’s scary, these
both come to the same conclusion as he has. in the opposite direction because rules and places are 40 years old, but no one can invest
“Anyone can build a warehouse and anyone regulations of regulatory bodies are focused in Hong Kong,” he said. “You’d think you
can build a truck,” he said. “The expectation on assets instead of the value a company could build a warehouse, but if you did this
of us is that we create value and examples.” adds. “There’s a load of trucking companies as your business you’d never get a return.”
However, Dominic Gates IDS Logistics said out here and there are a lot of warehouses,” O’brien said that the environment in China
that he has noticed companies taking a much said O’brien. “Creating value out of all these is moving in the wrong direction in terms of
harder line on costs in the past two years in trucks and warehouses are not something cold chain facilities (in terms of quality and
the face of the economic recession, which that Chinese companies are that good at, due total integration), but yet the expectation of
means that they are less willing to pay for to lack of incentives.” companies like Havi are getting higher and
pricier services that have better “intangible” “You get economies of scale if you deliver higher without the proper investment mate-
values. This view was shared by several mem- better value to the customer,” he continued. rials to support them.
58 MARCH/APRIL 2010 www.supplychains.com
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