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Future Freight Networks : Yearbook 2012
62 FORUM 2012 SESSION 6 Linking Australia to the International Logistics Industry ALC Chairman Don Telford chaired the session, which included Paul Graham, Chief Executive, Asia Pacific DHL; Paul Coutts, Group Products Marketing and Sales Director for Toll Global Forwarding; and Prem Ramachandran, General Manager Logistics for Schenker Australia. Mr Graham highlighted that Australia's isolation and small population puts it at risk of being an offshoot from big hubs in Asia, such as Singapore. He shared with the audience a personal anecdote that underscored how efficiency can drive costs and link customers with a larger market. Mr Graham spoke of how his daughter ordered an item from London at the beginning of the week for her mother's birthday. The item arrived four days later and shipping cost £7.50 ($11.50). He said the company is able to use its vast volumes to drive down costs, subsidising shipments for distant tiny markets like Australia. 'I think you would struggle to Express Post a parcel to Brisbane for the equivalent of £7.50,' Mr Graham said. Better infrastructure and access to skilled human resources are key to improving the domestic linkages, he said. As e-commerce gains momentum, logistics companies will need to make customers feel connected to the online world by being able to say when they can ship, locate a parcel and do it cheaply. Logistics companies will be increasingly called on to meet customers' needs -- either with home deliveries or to shops where items can be picked up, tried and returned if needed. Once again, the prospect of bigger and bigger ships entering service was an issue. With some container ships carrying 18,000 TEUs, dwarfing the capacity of Australian ports, the domestic market risks being an afterthought, Mr Ramachandran said. Distancing the domestic market from global supply chains risks boosting costs, Mr Ramachandran says. Mr Coutts said the takeover of TNT Express by United Parcel Service would be a game-changer in Europe. Mr Graham said UPS will phase out the TNT brand as it integrates the business. Toll launched its international expansion strategy about five years ago in Asia, the global hub of manufacturing, just as the global financial crisis was taking hold. 'We've got an interesting fight ahead of us in the European market,' Mr Coutts said. The panellists said they expect the takeover of TNT to help cement UPS's dominant position. Mr Coutts said officials at Apple told him that it shipped 500,000 iPad 3 tablet computers on its first day, and most of those were handled by UPS. During the global financial crisis, logistics companies with a global reach were able to tap into pockets of booming demand to help offset sudden drops in other markets. One example: Asian consumers were seizing on the slumping euro and ordering luxury goods from Europe, Mr Graham said. Australia's resources sector and Asia's growing number of consumers hungry for European luxury products are providing opportunities, he added. His company is struggling to keep pace with demand from projects such as the $43 billion Gorgon gas project. 'The growth is certainly there,' Mr Graham said. Session 6 Panel discussion