ATK中远项目建议书(ppt)

COSCO IPO SUPPORT MATERIALS
Table of Contents
Executive Summary
Market Size & Growth
Global
China
Service Demand
Global Trends
China Trends
Competitive Environment
Global
China
Regulatory Environment
Information Technology
Appendix
Executive Summary
A.T. Kearney’s definition of the logistics services industry

The China logistics industry will be shaped by China’s entry into the WTO and the subsequent opening of the market to foreign competition

The global logistics services market reached an estimated US$ 190 Bn in 2000
The global logistics outsourcing market is estimated to US$ 190 Bn in 2000
The transportation and related expenditures market reached an estimated US$ 3.8 Trillion in 2000, and is expected to grow at an annual rate of 2.3% over the next 5 years
The Asian logistics outsourcing market is estimated to reach US$ 31 Bn in 2001 and is expected to grow at CAGR 39% over the next five years
The greatest opportunities for outsourcing are in transport, warehousing, and transport management
The growth of the global logistics services industry is mainly driven by shippers’ propensity to outsource logistics services and organic transportation market growth
Customer electronics, automotive and apparel represent the most attractive opportunities for logistics services in China
The China market is still small at US$ 0.61 Bn, but will be growing rapidly at CAGR 35% over the next five years
The China logistics services market is still small at US$ 0.61 Bn, but will be growing rapidly over the next 5 years
The logistics services industry is still at an early stage of evolution in China
The transportation and related expenditures are proportionately higher in China than in most developed countries and NIEs - indicating a major improvement opportunity
In Coastal China, demand for logistics services is expected to be strong in Guangdong and Shanghai
In Inland China, the largest demand potential is in Sichuan and the Hubei/Yangtze river region
Growth in the logistics services industry in China will mainly be driven by continued macro economic growth and increased propensity to outsource logistics
Favorable macro economic outlook
Public policy and spending
Increasing interest in outsourcing for logistics needs
Growing IT and E-business

The global logistics outsourcing market is estimated to US$ 190 Bn in 2000
The transportation and related expenditures market reached an estimated US$ 3.8 Trillion in 2000, and is expected to grow at an annual rate of 2.3% over the next 5 years
The Asian logistics outsourcing market is estimated to reach US$ 31 Bn in 2001 and is expected to grow at CAGR 39% over the next five years
The greatest opportunities for outsourcing are in transport, warehousing, and transport management
The growth of the global logistics services industry is mainly driven by shippers’ propensity to outsource logistics services and organic transportation market growth
Consumer electronics, automotive and apparel represent the most attractive opportunities for logistics services in China

The China logistics services market is still small at US$ 0.61 Bn, but will be growing rapidly over the next 5 years
The logistics services industry is still at an early stage of evolution in China

Transportation and related expenditures are proportionately higher in China than in most developed countries and NIEs – indicating a major improvement opportunity
In Coastal China, demand for logistics services is expected to be strong in Guangdong and Shanghai
In inland China, the largest demand potential is in Sichuan and the Hubei/Yangtze river region

The Chinese economy is expected to grow at CAGR 7% over the next five years
Demand for logistics services comes from both international and domestic trade
The State Economic and Trade Commission has established a master plan for developing logistics services in China
A wide array of government supported logistics infrastructure development programs are under way across China
Interviews with SOEs and foreign invested enterprises in China indicate a relatively strong interest in outsourcing logistics services
China-based companies have a positive attitude towards purchasing advanced logistics services and quality, speed, and price are the most important purchasing criteria
Online transactions provides an additional source of growth for logistics services

Customers are increasingly demanding high value logistics service solutions, requiring global reach and advanced supply chain management capabilities
Service Demand - Global Trends
Traditionally, cost reduction has been the main reason for companies to outsource logistics
Today, customers are increasingly demanding more advanced services and end-to-end solutions
“Demand-Pull” logistics requires the logistics service providers to be flexible and to ‘control’ a large part or the entire supply chain
Leading logistics service providers are developing logistics one-stop-shops - from raw material sourcing to delivery of finished goods
Customers are increasingly interested in contracts with both fixed and variable pricing schemes - based on risk sharing
The opportunity for risk-sharing contracts is considered to be greatest in transportation and inventory management
Service Demand - China Trends
In the China market, logistics demand is still composed of basic services, such as transportation and warehousing
Going forward, demand for logistics services in China will mainly come from Transportation/Distribution, Warehousing/Consolidation as well as Customs Brokerage and Forwarding
The quality of logistics services offered in China are not good – as indicated by poor performance on on-time delivery, cargo loss and document accuracy
However, satisfaction levels for logistics services in China are relatively high, possibly indicating low expectations


Traditionally, cost reduction has been the main reason for companies to outsource logistics
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage/out of control
8. Make capital funds available
9. Share risks
10. Cash infusion
Today, customers are increasingly demanding more advanced services and end-to-end solutions, such as supply chain integration
“Demand-Pull” logistics requires the logistics service providers to be flexible and to “control” a large part or the entire supply chain
Leading logistics service providers are developing logistics one-stop-shops - from raw material sourcing to delivery of finished goods
Customers are increasingly interested in contracts with both fixed and variable pricing schemes - based on risk sharing
The opportunity for risk-sharing contracts is considered to be greatest in transportation and inventory management

In the China market, logistics demand is still composed of basic services, such as transportation and warehousing
Going forward, demand for logistics services in China will mainly come from Transportation/Distribution, Warehousing/Consolidation…
… as well as Customs Brokerage and Forwarding
The quality of logistics services offered in China are not good – as indicated by poor performance on on-time delivery, cargo loss and document accuracy
However, satisfaction levels for logistics services in China are relatively high, possibly indicating low expectations

Increasing demand for global reach and capabilities fuels consolidation as large logistics service providers are positioning themselves for success
Competitive Environment - Global
The logistics services industry is composed of a number of different types of players
Four factors are shaping the competitive environment in logistics services and drives the accelerating pace of consolidation in the industry - Economics of scale, demand-pull logistics, new capabilities & global reach, and “one-stop-shops”
The importance of scale has become evident as only large players can capture the high value end of the business that is emerging in large, complex and long-term contracts
Thus, M&A activity has surged dramatically in the last couple of years
Going forward, Asia is likely to experience increased M&A activity - especially as China enters the WTO
Container shipping companies are aggressively developing logistics capabilities and APL, Maersk, Hapag-Lloyd and NYK line have built separate business units to focus on the market for value-added logistics services:
Case study - Maersk Logistics strategy
Case study - APL Logistics strategy
Global players are positioning themselves for success:
Case study - UPS Logistics
Case study - FedEx Logistics
Case study - C.H. Robinson
A new type of internet-based logistics service provider has recently emerged
Internet-based logistics services companies are offering a multitude of value-added services, e.g. automated tracking and tracing
Increasing demand for global reach and capabilities fuels consolidation as large logistics service providers are positioning themselves for success (cont’d)
Competitive Environment - China
In China, the transportation and forwarding sectors are dominated by domestic, mainly state-owned, companies
Six types of service providers are competing - transportation companies, China Post, manufacturing enterprises, domestic logistics companies, foreign logistics companies and e-commerce provider
Case study - SinoTrans
Case study - China Post
Case study - Maersk Logistics
Case study - PG Logistics
Case study - Haier
Case study - www.56net.com
Currently foreign companies have limited presence outside China’s free trade zones. This is largely due to current restrictions on foreign participation
The logistics business of major global service providers is expanding aggressively in China and will represent a significant threat to domestic players

The logistics services industry is composed of a number of different types of players
Four factors are shaping the competitive environment in logistics services and driving the accelerating pace of consolidation in the industry
Drivers - Scale and “Demand-Pull” logistics
Drivers - New Capabilities and “One-Stop-Shops”
The importance of scale has become evident as only large players can capture the high value end of the business that is emerging in large, complex and long-term contracts

Thus, M&A activities surged in the last couple of years
Container shipping companies are aggressively developing logistics capabilities and ...
… APL, Maersk, Hapag-Lloyd and NYK Line have built separate business units to focus on the market for value-added logistics services
Case Study - Maersk Logistics Strategy is providing comprehensive “all-time, all-space, and all-mode” solutions to attract customers
Case Study - APL Logistics Strategy is focusing on IT capability and selected industries with aggressive development of logistics operating terminals worldwide
Case Study - UPS Logistics Strategy is leveraging a well recognized parcel services and strong financial position to develop comprehensive global supply chain solutions
Case Study - FedEx Logistics Strategy is building an integrated transportation, information and logistics solution on strong global network, control of air freight and key customer relationships
Case Study - C.H. Robinson Logistics Strategy is seeking ways to reposition itself and its 14,000 motor-carrier fleet
A new type of internet-based logistics service provider has recently emerged


In China, the transportation and forwarding sectors are dominated by domestic, mainly state-owned, companies
Six types of service providers are competing – transportation companies, national postal operator, manufacturing enterprises, domestic logistics companies, and foreign logistics companies and emerging e-commerce providers
Currently, foreign companies have limited presence outside China’s Free Trade Zones. This is largely due to current restrictions on foreign participation
The logistics business of major global service providers is expanding aggressively in China and will represent a significant threat to domestic players
Has been in China since 1995, offers a wide range of logistics services through centers in 13 locations,
Opened its first national distribution center in Shanghai, as an important first step in Maersk's "fully controlled pan-China distribution network"

APL Logistics is expanding on its strong Asian base (e.g., 10 logistics centers in China) through major acquisitions of logistics companies in America and Europe
APL Logistics will focus on China and India, where the company is moving to retail business and local distribution

OOCL operates 4 major logistics centers in China and is seeking to leverage Cargo Smart technology


Started China business in 1988, first JV with Sinotrans in 1996
Planning to double its offices in China to 40 in year 2001 and is now operating 6 flights to China this year

Plan to expand its service area in China from about 200 cities currently to 300 cities in the next 5 years, plan to open JVs in Shanghai and Shenzhen this year
China business grew over 30% in year 2000
Case Study - Sinotrans is aspiring to become a national logistics leader by leveraging its established customer base and national reach
Case Study - China Post is seeking to enter the logistics market by leveraging its brand and extensive network
Case Study - Maersk Logistics is investing heavily in China and has established a relatively large presence
Case Study - PG Logistics, a pure domestic logistic integrator, has invested heavily in IT capabilities and provides a range of SCM services
Case Study - Haier, a leading domestic consumer goods manufacturer, is leveraging its extensive network and capabilities to grow in logistics
Case Study - Domestic Chinese logistics e-commerce companies, such as 56net.com, are emerging as logistics information platforms

China’s entry into WTO is expected to have two main implications - (1) the logistics market will grow rapidly, and (2) competitive intensity will dramatically increase


Strong IT capabilities is becoming a core capability of logistics services providers and is critical to building a logistics services business
As the supply chain becomes increasingly digitised, IT based services are becoming a core competency for any major logistics services provider
Leading logistics players have dedicated extensive resources to making web-based supply chain solutions a key priority:

Maersk has invested heavily in IT through its on-line system, M*Power, which enables integrated and customized logistics solutions
APL is a leader in shipping related on-line services and has extensive IT capabilities to supply chain management solutions
Danzas has invested in a number of B2C and B2B solutions to support a full range of supply chain service offering
UPS has invested in NetCel360, formed an alliance with Network Solutions and developed a set of on-line tools to improve e-commerce capabilities
FedEx has created a portal, invested in TradeCompass, and formed alliances with SAP and KPMG to boost FedEx capability to manage digital supply chains



As the supply chain becomes increasingly digitised, IT based services are becoming a core competency for any major logistics services provider
Maersk has invested heavily in IT through its on-line system, M*Power, which enables integrated and customized logistics solutions
APL is a leader in shipping related on-line services and has extensive IT capabilities to supply chain management solutions
Danzas has invested in a number of B2C and B2B solutions to support a full range of supply chain services
UPS has invested in NetCel360, formed an alliance with Network Solutions and developed a set of on-line tools to improve e-commerce capabilities
FedEx has created a portal, invested in TradeCompass, and formed alliances with SAP and KPMG to boost its capability to manage digital supply chains

Maersk Logistics
NOL/APL
NYK
P&O
Hapag-Lloyd
MOL
OOCL
General comments from COSCO and A.T. Kearney Remarks

ATK中远项目建议书(ppt)