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Supply Chain Opportunities in China
Amsterdam, June 24th I Sea Palace
2 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China has a HUGE potential…
Area: 9,596,961 km2
• World's 4th largest country (after Russia, Canada & USA)
• Stretching 5,000 km from East to West , 5,500km from North to South
• One-third of China’s land area is made up of mountains
• The Great Wall is 21,196km long, all branches included
China Geography Tropical, Arctic, Desert; China has it all!
3 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China has a HUGE potential…
China Population
Area: 9,596,961 km2
• World's 4th largest country (after Russia, Canada, & USA)
• Stretching 5,000 km from East to West , 5,500 km from North to South
• One-third of China’s land area is made up of mountains
• Length of the Great Wall … 21,196 km all branches
Population: 1,354,040 (2012) Density: 138 per km2
• The population of China is more than 1.3 billion people, the largest national group in the World
• Han Chinese 91.5% (56 different minorities)
• Two-thirds of the Chinese people are farmers, but only 4% of China’s land can be cultivated
• +160 Chinese cities have +1 million inhabitants
4 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China has a HUGE potential…
China Economy
GDP: CNY 52.76 Trillion (2012) (World 2nd largest economy after USA)
• GDP Growth 2013: 7.5%
• GDP per Capita: CNY 55,800 (USD 9,100)
• Labor Force: 795 million (World Largest)
• Oil consumption 9.40 million bbl/day (2012)
• Middle class consumers: +200 million
• Chinese winners are now entering overseas market: Haier, HuaWei, Lenovo, ZTE…etc
5 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China has a HUGE potential…
Shanghai ‘Pearl of the Orient’
Population: 23,019,200
Area: 6,340 km2 (Urban area 2,643 km2)
Structure: Shanghai is divided into 16 districts and 3 counties. There are 205 towns, 9 townships, 99 sub-district committees, 3,278 neighborhood committees and 2,935 villagers' committees
GDP Per Capita: CNY 82,560 (USD 13,474) (2011)
Port : 29,05 million TEU (2010) (World no 1)
Highest Building: Shanghai Tower(2014), 632m (2 in World)
1990
上海
6 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China has a HUGE potential…
China Overview Go West -The Rise of China's 2nd and 3rd Tier Cities
1990 West – East Distance 5,000km
North – South D
istance 5,500km
Chongqing Shanghai
Beijing
Chongqing
Urumqi
Lhasa
Guangzhou
Chengdu
Tier 2 44.5% population
32% of GDP Tier 3
4.5% population 4% of GDP
Tier 1 51% population
64% of GDP
7 | DSV – Sea Palace Restaurant, Amsterdam June 2015
In 2009, China beat Germany for
the first time, $1.2 trillion
exports
China Logistics A few general figures
$400 billion 2 million 3PL in China
Top 6 providers; only 1% MS
6 million trucks on the local market = Avg 3
trucks / company
77,800 km of railway (3rd largest
in the world)
3,600,000 km of upgraded road (2nd largest in the world)
Logistics market was
$400 billion in 2012, with a sharp
yearly increase since
$16.3 billion investment
announced in 2013 to build a network
able to deliver everywhere in 24h
8 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China Logistics
• China is no longer merely considered as a location with cost-saving potential, but rather a strategic mainstay from procurement (8-% already in China) to manufacturing (64%) to distribution (53%)
• Pwc “Logistics companies that think they missed their chance will find the market is still rife with opportunities”
• Outsourcing the warehousing operation is still not common: - 25% only use 3PL services – 6% only use international 3PLservices
63%
44%
28%
23%
8%
20%
36%
35%
13%
9%
27%
36%
16%
27%
9%
6%
0% 20% 40% 60% 80% 100%
Supply Chain monitoring
Warehousing
Customs clearance
Transport managementInternal
External, ChineseLogistics companies
External, non-ChineseLogistics companies2
Unknown, n/a, doesnot apply to ourcompany
Logistics market and customer habits
9 | DSV – Sea Palace Restaurant, Amsterdam June 2015
China Logistics
Price is not always the most important criteria to choose a 3PL provider
6%
40%
46%
46%
54%
56%
69%
76%
82%
36%
47%
41%
46%
36%
42%
29%
23%
16%
53%
12%
12%
8%
8%
2%
2%
1%
1%
5%
1%
1%
2%
0% 20% 40% 60% 80% 100%
Charitable engagement
Environment aspects/sustainability
Nearly location
Tracking & tracingsystems
Security systems
Price
Quality management
Sufficient capacity
FlexibilityHigh Average Low Unknown, n/a
Logistics market and customer habits
Having an existing facility in the right location (sufficient capacity) with a similar running experience (Flexibility + Quality management) is the winning combination
10 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Logistics flows that DSV can serve in China
From Sourcing… • Consolidation center with
inventory • Quality control before export
…to production… • Inbound logistics for production • VAS and kitting before export
…to China domestic market • Import + Delay duty (spare
parts, industrial…) • Quick import for domestic
distribution (Retail) • China Domestic DC • Pure distribution
…and Regional DC • Pan-Asia / Global DC by sea • Pan-Asia / Global DC by air
11 | DSV – Sea Palace Restaurant, Amsterdam June 2015
SHA Waigaoqiao FTZ SHA Yangshan FPA DC Suzhou SIP/Wuzhong DC
Beijing Yizhuang WH Tianjin Industrial Park Wuxi Ehu DC
DSV China – Key distribution centers Warehousing I Distribution I Value Added Services
All facilities operated by DSV Staff, MHE & WMS
12 | DSV – Sea Palace Restaurant, Amsterdam June 2015
DSV Solutions Footprint: China
Logistics & Transport Hub Footprint
Locations Warehouse Space
Shenyang 500m2
Haerbin 500m2
Beijing 7,000m2
Tianjin 18,000m2
Suzhou 13,500m2
Wuxi 5,200m2
Shanghai 58,000m2
Fuzhou 500m2
Chengdu 200m2
Kunming 500m2
Shenzhen 20,000m2
Hong Kong 6,000m2
Total 130,200m2
Chengdu Shanghai
Shenzhen
Suzhou Wuxi
Beijing Tianjin
Shenyang
Fuzhou
HK
Harbin
Kunming
235 team members in 22 locations spread over 12 cities serving 105 customers
13 | DSV – Sea Palace Restaurant, Amsterdam June 2015
DSV Solutions Footprint: China
Logistics & Transport Hub Footprint
Locations Warehouse Space
Shenyang 1,000m2
Haerbin 500m2
Beijing 7,000m2
Tianjin 18,000m2
Suzhou 3,800m2
Wuxi 6,000m2
Shanghai 60,000m2
Ningbo 2,000m2
Fuzhou 500m2
Chengdu 200m2
Kunming 500m2
Guangzhou 3,000m2
Shenzhen 11,000m2
Hong Kong 6,000m2
Total 119,500m2 Transportation hub only
DSV Logistics Warehouse Site
Chengdu
Xi’an
Chongqing
Liuzhou
Shanghai
Xiamen
Shenzhen
Suzhou Wuxi
Qingdao Jinan
Beijing Tianjin
Shenyang
Fuzhou Guangzhou
Golmud
URMQ
Korla
Lanzhou
Wenzhou
Zhengzhou
HK
Harbin Qqhr
Changchun
Dalian Taiyuan
SJZ
Kunming
14 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Case Study: Asia DC in Shanghai
Service Scope
• Danish furniture retailer with 350 stores in 50 countries, central DC in Denmark
• 13 markets in Asia & Middle East, over 20 suppliers in China + DK CDC volume
15 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Case Study: Asia DC in Shanghai
DSV Solutions
• Optimized warehouse layout re-design • Productivity improvement by both process optimisation and RF
operation implemented by Aptar and support by DSV • Performance driven bonus to improve the staff motivation and
productivity
16 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Case Study: Asia DC in Shanghai
Key benefits for the Customer
• Significant cost reduction by closing 3,000m2 JP DC in Tokyo • Significant cost savings to serve all Asian markets – more than half
of product volume manufactured in China. Lower DK CDC cost • Reduced client order fulfillment lead-time to Asian stores (excl. JP)
17 | DSV – Sea Palace Restaurant, Amsterdam June 2015
DSV TMS: Web base order Track & Trace tool
6
Comprehensive operation models (e.g. milk run, hub & spoke)
5
More than 500 final destinations 4 Own transport license 1
Specialized trucks available (side-wing, air-suspension, flatbed, temperature control and box truck)
3
Multi-transportation model: FTL, LTL, express courier, air and rail
2
Transport Overview
18 | DSV - Place, Month Day Year
High-Tech New Energy Retail Auto Industrial
DSV China Logistics clients
19 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Round tables agenda
China as a Regional Distribution Hub (Ralf and Per Sonne)
China Domestic deliveries (Ralf or Kelvin Tan)
Customs and taxation issues while importing into China (Peter Zhou)
Chinese language IT integration challenges (Group IT/ Allen/ External)
Order and stock optimization (Guillaume/ Bugaboo)
Human Resource (Rikke/ Andy)
Legal aspects of setting up and running a business in China (External expert)
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3
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6
7
20 | DSV – Sea Palace Restaurant, Amsterdam June 2015
Contact Details
Thomas van Vliet Marketing Manager +31 (0)61 290 4586 [email protected]
Ralf Bekink National Business Development Manager +86 1 502 170 9896 [email protected]
Guillaume Burette GM Logistics +86 1 801 730 6366 [email protected]