Superb geographic connectivity makes Singapore home to some 7,000 logistics companies. The 20-odd biggest players of the global supply chain business have also set up their regional headquarters here.
Yet Pan Asia Logistics managed to prise a slice of the pie for itself amid the competition. Incorporated in December 2002 with $20 million in the first-ten-month revenue, the company reached $150 million in annual revenue a decade later and is aiming to hit $1 billion by 2020.
The success factors
Founded in Singapore by German-born logistics veteran Christian Bischoff, Pan Asia Logistics has its core competencies in comprehensive logistics services covering airfreight, ocean freight, projects and heavy lift, and contract logistics. Blending German precision with Asian efficiency, the company obtains its competitive edge through cost advantage and customer orientation.
For one thing, Pan Asia Logistics mitigates the disadvantages of its smaller market power by carefully selecting its target segments, such as the right combination of clients. The automotive industry, for example, forms the core of Pan Asia Logistics' clientele and generates 40 per cent of its revenue. Other key verticals include electronics and high tech, oil and gas, fashion and lifestyle, as well as food and beverage.
The company is highly customer-oriented in its business approach. This explains its commitment to understanding the competitive landscape of its customers, so that it is able to provide customised one-stop logistics solutions that add the most value to its varied multinational (MNC) clientele.
One-stop service support is the key here. While traditional freight forwarding is still very much at the heart of its services, Pan Asia Logistics has been transforming itself into a provider of fully integrated supply chain solutions with information technology (IT) and contract logistics at its core. The ultimate aim is the optimisation of the client's supply chain and distribution processes.
The use of information systems is also highly emphasised. The firm has invested heavily in such technologies for the benefit of its clients. With Web-based technologies, clients have real-time access to information on their shipments or inventory levels. This helps make the whole logistics process more resilient and convenient.
Another intricate part of Pan Asia Logistics' business model is innovation and flexibility in its service offerings. A good example is the innovative freight forwarding options such as the tailor-made combination of sea/air transportation that the company provides. Sea-air transport has the benefit of lowering costs while still allowing clients to benefit from the speed that comes with airfreight. The company also offers storage space for a diverse selection of goods, and it is equipped with air-conditioned and dangerous goods facilities.
Regional expansion is an equally important pillar of Pan Asia Logistics' growth. As the company's business consultant Monika Bischoff explains: "Venturing into new markets will be essential for reinforcing the company's market presence, and will position it strategically and solidly." Pan Asia Logistics started in Singapore and now has more than 40 branch offices across Asia in Indonesia, South Korea, Hong Kong, China, India, Malaysia, Thailand, Taiwan, Vietnam and Japan. In 2009, it opened its first subsidiary in Stuttgart in Germany. More presence is to be established in Laos, Cambodia, Myanmar and Bangladesh this year.
Expanding warehouse capacity "will further contribute to Pan Asia Logistics' strategic growth", notes Mrs Bischoff. The company opened a 170,000 sq ft facility in South Korea in 2008, and another 200,000 sq ft warehouse and office building in Changi in 2011. Two warehouses - one of 480,000 sq ft in west Singapore and another of 420,000 sq ft in Tanjong Pelepas in Malaysia - are currently under construction and will be operative later this year. To be opened in 2014 is one more 300,000 sq ft logistics centre in South Korea. This is not all - over the next few years, the company plans to add another 1.5 million sq ft warehouse space in the region.
Pan Asia Logistics also has an extensive support network of partners, alliances and agents throughout Europe, Middle East, North Africa and the Americas. This helps to improve its responsiveness towards the needs of international customers for fully integrated logistics solutions.
Pan Asia Logistics conducts its operations based on eco-friendly principles. Every effort is taken to reduce its carbon footprint. For example, the company reduces waste by reusing packaging materials and supplying them to other industries as secondary raw materials.
Outstanding business achievements have brought Pan Asia Logistics numerous accolades. It has been consistently placed among the top 500 small and medium enterprises (SMEs) in Singapore since 2004. In 2010, the company won both the Enterprise of the Year Award and the Entrepreneur of the Year Award which are prestigious hallmarks of success honouring consistent excellence in business performance among Singaporean SMEs.
With the introduction of the revised Singapore Green Plan (SGP) in 2012, the environmental blueprints of the local firms are now facing increased review and scrutiny. With a growing amount of green legislations requiring original equipment manufacturers to recall and recycle or dispose of their end-of-life products, Pan Asia Logistics sees a potential for a new business model. It is exploring the possibility of launching niche services by establishing reverse logistics and remanufacturing networks to enable clients to take back their used products.
Increasing operational costs due to the volatility in the economy, over capacity and rising labour costs are some key problems that have significant repercussions for logistics firms worldwide. As Mrs Bischoff reflects: "It will be of vital importance to monitor the changing markets and be able to react swiftly and adjust to the changes, such as the shifting of modals and trade lanes, as well as the trend towards regionalisation (of the logistics industry)."
According to Mr Bischoff, the founder, Pan Asia Logistics is to become the largest Singapore born and grown global logistics provider. Clearly, the company is progressing well to achieving this goal.