TNT tames Southeast Asia’s roads

TNT tames Southeast AsiaÆs roads Expands Asia's first over-the-road network with day-definite delivery, security and a price between air, ocean freight.

By Eric Johnson

      It's hard to find many similarities between Europe and Southeast Asia.
      But in at least one respect, there's a common trait ' a dedicated over-the-road network from TNT.
      First launched in 2005, the network has grown into a mammoth service offering, encompassing seamless road transport across six countries, 127 cities and 7,620 kilometers.
      For shippers, the service falls into that growing 'in the middle' space between high-cost air freight and low-speed ocean service. Like the transpacific day-definite services provided by partnerships between ocean carriers and truckload companies that have sprung up in the last few years, the road network is aimed at a shipper who wants delivery certainty, security and one point of contact.
      That last point shouldn't be understated, for in the realm of over-the-road transport in Southeast Asia, things can get dicey. While shippers using less-than-truckload carriers in North America have Canada and Mexico border crossings to deal with, in Southeast Asia there are five such crossings, and the regulatory framework isn't quite so cohesive. The ASEAN bloc has not matured to the extent the North American Free Trade Agreement has.
      When comparing the constraints of trucking in Southeast Asia to Europe, the differences are even more striking. TNT's European network touches more than 30 countries, and even extends to northern Africa, but European Union regulations provide for largely uninterrupted service, especially relative to border crossings in Asia.

Karel van de, Pijpekamp sales and marketing director, TNT Asia
'Unlike in the EU, where cross-border barriers have been removed to smooth the flow of goods, each country within Southeast Asia has its own customs regulations which need to be understood and managed by TNT for our customers.'

      'With a pioneering service, a lot of aspects had to be taken into consideration prior to the setup, such as customs clearance, and ensuring utmost security in transporting the goods,' Karel van de Pijpekamp, sales and marketing director for TNT Asia, told American Shipper. 'Unlike in the EU, where cross-border barriers have been removed to smooth the flow of goods, each country within Southeast Asia has its own customs regulations which need to be understood and managed by TNT for our customers.'
      The key facet of the service is that the trailer is never unloaded from origin to destination, even if border restrictions call for a change of vehicle.
      'The same drivers and trailers will be transporting the shipment throughout the process, unless there are border restrictions,' van de Pijpekamp said. 'If the border restrictions apply to the vehicle used, TNT will make the necessary arrangement to move the cargo container to the next authorized TNT vehicle, without unloading the container. The contents of the truck/trailer need not be unloaded and/or reloaded, thus saving time, and preserving the security of the goods.'
      TNT also maintains 12 inland customs clearance depots along the network.
      'This is the first-ever network in Asia such as this to be introduced, and that meant that we were entering uncharted territories,' van de Pijpekamp said. 'But, we were equipped with the know-how from Europe, and the determination to work closely with the officials involved to make the network happen.'
      As for what's moving on the network, it's mostly high-value items.
      'The demand is mainly driven by customers in the high-tech, equipment and machinery and health care sectors,' van de Pijpekamp said. 'They are increasingly moving large volumes of high-value goods between Southeast Asia, China and Europe.'
      Much of the volume is based on shipments headed to other parts of Asia for final assembly or secondary manufacturing.
      'Asia is the manufacturing base of the world,' van de Pijpekamp said. 'Goods being moved on the network are largely 'semi-finished goods.' That is, components from Malaysia and Thailand may be transported to a factory in China, for example, where the finished good is pieced together. The finished goods will then have to be transported to the next location, either in Asia or anywhere in the world, like Europe, to be sold.'
      TNT trumpets its security on the network, a vital characteristic, van de Pijpekamp said, because of the high-value nature of the goods being transported.
      'Security is essential in this starting part of the supply chain, because if goods get lost or delayed, it has a domino effect on the rest of the supply chain,' he said.
      From the company's Asia Security Control and Command Center in Malaysia, shipments are tracked 24/7, and communication links are constant with TNT drivers and law enforcement agencies in Malaysia, Singapore, Thailand and Vietnam. Shipments are tracked via GPS and trucks can even be stopped remotely if a container is suspected of being compromised, TNT said.
      Aside from security is the issue of connectivity. With a large proportion of the goods moving on the network intended for final assembly in other Asian locations to be moved to final destinations in Europe or North America, TNT has tried to take advantage of road-air supply chains by linking to major Asian air hubs like Singapore, Kuala Lumpur, Bangkok, Guangzhou and Ho Chi Minh City.
      TNT, which took delivery of its first two Boeing 747 freighters in 2006 and 2007, has a direct service between Singapore and Shanghai and its European hub in Liege, Belgium.
      In terms of cost and time savings, the road network presents a compromise of sorts for shippers ' a break in price from air but with shorter transit times than ocean. Van de Pijpekamp said the service is 30 percent cheaper than air freight and three times faster than ocean freight. He couldn't specify how much more expensive it is than ocean freight, but said it is particularly advantageous in areas in developing regions where ports might be congested or air capacity inadequate.
      It's not surprising that TNT was the pioneer when it came to the trucking segment in Asia. The company got its start as a domestic trucking company in Australia then later developed the largest road and air network in Europe. That blueprint was eventually transferred to Asia.
      It hasn't been a quick project. The timeline for development of the Asia Road Network has stretched three-a-half years and counting. In 2007, the network expanded from Thailand to Vietnam, then from Singapore to northern Malaysia, then from Vietnam to two regions in southern China.
      In May, TNT added Cambodia to the network, a critical development that literally allows coverage throughout the Southeast Asian peninsula, from Guangzhou through Vietnam and Thailand to the tip of Singapore.
      Another major development occurred in April, when TNT opened its Singapore integrated road-air hub, which van de Pijpekamp said 'will significantly increase the capacity for time-sensitive freight passing through Singapore.'
      Another issue potentially working in favor of the company's road network is the economic downturn. Many shippers are finding that a reliable service at a reasonable price saves more than simply going with the best rate. The company said it has seen double-digit growth in volumes on the Asia Road Network in the last six months, something that not many transportation providers can boast of these days.
      'As the economic climate remains uncertain, customers will constantly review their business and supply chain needs, balancing the cost and service trade-off, to make sure their transportation mode is cost-effective,' van de Pijpekamp said. 'For TNT, this means continuing to constantly innovate to identify cost-effective alternatives to conventional solutions for moving their goods. This has prompted customers to look more closely into road transportation. This is where TNT has an edge over the competition in Asia.'
      And he said that if the recession worsens, the company will continue to develop the network because it sees long-term value in Southeast Asia.
      'Despite the current economic challenges, TNT remains committed to Southeast Asia ' a robust region that holds strong potential in the long term,' he said. 'Trade flows within the region and other key markets in China and Europe offer tremendous growth potential.'