As the ocean freight industry becomes increasingly commoditised, shippers and Beneficial Cargo Owners are looking for innovative ways to improve efficiency and add value in the supply chain. In response to this growing demand Hutchison Ports is developing its own logistics services throughout its global network.
“In each of our regions we have found unique opportunities to provide additional logistics services, for example in the Netherlands at Hutchison Ports ECT Rotterdam our European Gateway Services (EGS) business can offer tri-modal services incorporating road, rail and barge to reach inland terminals for efficient distribution throughout mainland Europe,” said Mark Taylor, Director of Hutchison Logistics Europe.
“Hutchison Logistics is uniquely positioned to help shippers around the world make better informed decisions and add value to their cargo, including arranging for containers to be unpacked and products stored and cross-docked in warehouses close to our ports and final delivery arranged.”
“We provide a neutral end-to-end service from origin to destination and we work with shipping lines, trucking companies, warehouse operators and inland logistics centres to expedite cargo.”
Hutchison Logistics is also investing in its own asset base which includes an 80,000 sq. ft. bonded warehouse in Felixstowe in the UK which will provide container deconsolidation services.
With further expansion planned of 1.4m sq. ft. of space at the new Logistics Park development at the Port of Felixstowe, the warehousing is being developed to cater for shippers wanting to deliver directly to their final customers or via national and regional distribution centres for final delivery.
There is also growing demand for palletisation of cargo at the port which means that cargo can be processed for onward transportation using standard trailers. The benefit is that the cargo is palletised when it lands at the port, saving the cost and time of an additional container move to a third party for devanning and processing and restitution of the empty container. Similarly, the reverse works well for export cargo which can benefit from consolidation at port.
“For outsize or project cargo that does not fit on a standard trailer we can prepare the shipment at the port, working with project forwarding companies to arrange special trailers for onward road, rail and barge transportation depending on the location. We have special loaders and equipment at the terminal to handle these shipments.”
Hutchison Logistics flexible cargo services also means that shippers have alternatives to mitigate for unforeseen disruptions in the supply chain, such as vessel delays, labour disputes affecting ferry operations, truck driver shortages as well as seasonal road traffic congestion.
“Increasing congestion on roads in Europe and the UK has led to an increase in short sea operations, which are both cost effective and environmentally a better option to trucking. More cargo is arriving by sea from our sister port in Gdynia in Poland for example, as shippers look to smarter supply chain options.”
“Many shippers are also looking for alternative routes to and from the UK as there is uncertainty regarding Customs arrangements post-Brexit.”
One of the potential choke points could be for trucks at English Channel ports and ferry crossings as additional Customs procedures and checks may be implemented once the UK leaves the European Union.
The services provided by Hutchison Logistics vary from port-to-port around the world depending on demands of customers and are there to help advance global supply chains.
“We are part of the shipping and logistics communities within our network of ports we operate in and have the local expertise, network and relationships to provide customised services and solutions to support our customers and deliver benefit to all concerned,” said Taylor.
Providing a diversified product offering, including logistics facilities, is a natural progression, according to Andy Tsoi, Managing Director – Middle East and Africa (MEA) of Hutchison Ports: it promotes customer loyalty and allows Hutchison Ports to diversify its income base.
He said, “I think the key for us is still customer loyalties, creating stickiness with our customer, meaning we are going to go one step further than just handling the boxes.”
The most mature project in the MEA region is a government initiative in Oman to establish a logistics park close to Muscat. Hutchison Ports has been working closely with the local authorities for over a year on this huge logistics project.
His colleague, Eric Ng, Business Director – MEA of Hutchison Ports added, “We are considering each of our business units to see if there is such kind of inefficiency in the market. We will act as a facilitator, for example in Karachi, to improve connectivity to the country’s hinterland. We are planning for a rail terminal in our new terminal in Karachi, hopefully by the end of next year we can start the service on a small scale and grow the business gradually.”
In the MEA, Tsoi concedes that there is much catching up to do to mirror what Felixstowe has achieved over the last fifty years. However, he says that in the Middle East they are trying to create a business model where ports can grow faster and be more competitive in terms of product offering. At their facilities in the United Arab Emirates, he described the variety of specialist warehouse facilities, including: temperature-controlled warehouses, or facilities where the taxes are paid on import duty when the cargo is distributed. It is not only about trying to create an integrated service for the customers across the region, but recognising where they cannot be price competitive.
There is a push to see how they can add value from the cargo landing in the port to reaching the shelf in supermarkets. Tsoi said, “We just have to be cautious where we invest, where we can create value.”
However, in the Middle East the growth of internet shopping as a major trend and the demand levels are high. This demand Tsoi wants to tap, adding, “There’s thirty-three million population in Saudi Arabia, so the connection between the customers and the warehousing facility and the ports is something that will require a lot of warehousing logistic connections. We will require local partners.”
Logistics development is a long-term project. Tsoi said, “If the cost does not justify the means now it will justify in five or ten years’ time.”
For Vincent Yuen, Managing Director of Hutchison Logistics (HK), there are many ways to build relationships with shippers and consignees.
He said, “We are offering intermodal services for shippers and consignees, which include trucking, feedering and even rail services in various areas. It depends on the location and what we can offer; we are even doing custom clearance for some of our customers in Myanmar. ”
He added, “Aside from the intermodal or near port solution which we offer locally in each port – we are also looking for solutions which we can offer as a total chain instead of customers having to contact freight forwarders, truckers, carriers, or custom brokers, we can link up these services together with the terminal to offer a full total logistics solution.”
Yuen added, “In this region, we are more focusing on intra-Asia solutions and imports into China.”
Within Asia, the company is exploring many ways where our terminals can add value towards the supply chain. The company is offering a total logistics solution in Myanmar for cargoes moving in and out of the country. With our self-owned trucking fleet and our strong custom clearance partner, we provide a one-stop service for customers looking for logistics services to and from Myanmar.
The global presence and financial wherewithal of Hutchison Ports allows the company to link the distribution chain from source to destination, such as, for an international trader reselling copper from Amsterdam to a manufacturer in China.
Yuen explained, “We cut, packed, and stored the cable in the container, and then shipped those containers back to China. With us handling all the cutting and transportation of these cables, we can provide weighing and value-added services in our ports. This also facilitates the trade by justifying the amount of cable under such trade.”
He cited another example for import cargo coming to Hong Kong, where Hutchison Logistics is providing a door-to-warehouse service.
Yuen added, “We are always exploring ways to scale our solutions; we are looking at ways to duplicate these solutions to link up port pairs and develop tie-ups within our network of ports.”
Hutchison Logistics in Mexico has developed extended gate services at the ports located at Lázaro Cárdenas, Veracruz and Hidalgo, according to Saul Cucurachi Bello, General Manager at Hutchison Logistics Mexico.
“We have moved beyond traditional terminal services and we are focused on what is inside our customers’ containers and we know who the final consumer is. We are able to offer value-added logistics solutions including warehousing, pick and pack, labelling, kitting, end-user distribution, cargo security and inland transportation tracking,” said Bello.
In Mexico, Hutchison Logistics also offers ocean and air freight forwarding services, trucking and door-to-door delivery.
“We offer intermodal operations (rail-truck-rail) connecting our customers to inland destinations through our port-to-door services in Mexico and into the US and Central America. We are also helping customers navigate through complex customs clearance working with our network of custom brokers,” he added.