The benefits of lower costs, higher efficiency and limitless scale continue to drive multinationals to manufacture, invest and outsource services in emerging markets – particularly in Asia.
The world’s largest and most populous region is also growing as a consuming base, with spending power set to approach Western Europe’s within 10 years, according to McKinsey & Co.
The NOL Group’s association with Asia began 140 years ago and our strength in this dynamic region continues to be a differentiator.
We serve Asia via three distinct regions: Greater China (China, Hong Kong, Macau and Chinese Taiwan); South Asia (India, Pakistan, Sri Lanka, Bangladesh, Afghanistan and Nepal) and Asia/Middle East (Japan, Korea, Australia, the ASEAN countries and the Middle East).
Collectively, this geography registered the strongest year-on-year revenue growth in logistics, accounting for 19% of total APL Logistics revenues.
GREATER CHINA
China is the starting point of an enormous – and growing – number of global supply chains. As in previous years, it was a main driver of our cargo volumes in 2006, with strong demand for China-made products in the Americas, Europe and within the broader Asian region.
To harness the global demand for China-made products, we provided new and enhanced shipping connections between China and both coasts of the US, Australia and Vietnam, among others.
We moved the origin of our showcase Pacific South 2 Transpacific service to the port of Chiwan to better serve sourcing hotspots in the West Pearl River Delta.
Our China presence was further strengthened in early 2007 when we entered into an agreement to build and operate a container terminal in Qingdao, northern China.
In logistics, OceanGuaranteedSM became the industry’s first expedited ocean freight service for less than container load shipments when it launched for China-origin cargoes in August 2006.
SOUTH ASIA
Led by India, South Asia became an increasingly powerful contributor to the global economy, and to our business, in 2006. Anticipation of the region’s potential lay behind our decision to create a new South Asia region.
Over the course of the year, we consolidated our leadership positions in Bangladesh, Pakistan and Nepal, as well as Sri Lanka – where we recently received major customer service awards from the Institute of Chartered Ship Brokers.
To help alleviate the chokes that characterise India’s landside infrastructure, we began building a business to run container freight trains on all routes, which we expect to be operational in 2007.
Our container freight station near New Delhi also began providing excellent services to customers in 2006.
ASIA/MIDDLE EAST
This diverse region encompasses markets from Egypt to Japan and has registered robust revenue and volume growth in 2006 across both our liner and logistics businesses.
In north Asia, renewed dynamism of the Japanese economy means that this country will remain a key engine of global trade. Of our top 50 global customers for liner and logistics, about 20% are Japanese.
We also gained traction in the Middle East with logistics revenues more than doubling in 2006 over the prior year, on the back of new business wins.
There was also an increasing demand for fresh produce in the Middle East with the Philippines, another emerging market where we are a leader, a major beneficiary of this demand.
Through 2006, we worked to develop the twice-weekly Mindanao Express (MDX) service, which was launched in February 2007. The MDX provides increased capacity and frequency for perishables moving between the Philippines and global markets.
Fresh produce demand also grew in the China-Australia trade. In response to this demand, we unveiled the China-Australia Service (CAS), which featured significant refrigerated and climate controlled capacity.
Vietnam was one the fastest-growing markets in Asia/Middle East in 2006.
During 2006, we became one of the first shipping and logistics companies to be granted a licence to establish wholly-owned operations in Vietnam (see below).
First in. Staying first. | |
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Vietnam’s GDP is forecast to grow by around 8% annually for the next decade, so it is hardly surprising that it has been the focus of a high level of international business interest. NOL has been involved in Vietnam for more than 16 years and given the current robust economic forecasts, our first mover investment in the Vietnam International Container Terminal (VICT) in 1994 looks set to pay even bigger dividends. |
To accommodate the anticipated growth in containerised cargo, an upcoming expansion will increase the berth length at VICT to 678 metres and expand capacity to 900,000 TEU a year by 2008. The establishment of wholly-owned operations in Vietnam in late 2006 will enable NOL to continue providing our customers with the best-possible services as they place an increasing amount of their sourcing and manufacturing in Vietnam. |
The Shanghai skyline: China is the starting point for an enormous number of global supply chains. It was the main driver of our cargo volumes in 2006, with strong demand for China-made products in the Americas, Europe and within the broader Asian region.
