Kerry Logistics

Company Visit 4

Company Name : Kerry Logistics Network Limited

Company Address :  16/F Kerry Cargo Centre, 55 Wing Kei Road, Kwai Chung, Hong Kong

Date of Visit : 25 March 2015

Schedule :

1. Presentation of company information
2. Q&A session
3. Visit facilities

Company Background:

Kerry Logistics is a leading logistics service provider in Asia. They focus on integrated logistics and international freight forwarding businesses. The company has developed an extensive route network (KART) between China and other countries in ASEAN. KART is an unique road network solution across ASEAN such as  Vietnam, Myanmar.  It across over 35 countries and territories in ASEAN.

They manage approximately 39 million sq.ft. of logistics facilities. As a service provider, they offer a wide range of services to different customers in order to satisfy their need and increase their competitiveness in the industry. The VAS can directly enhance the reliability and flexibility to their clients.

Presentation of company information:

First, the slides show that Kerry logistics have more than 19000 employees. It is a premier logistics service provider in Asia. It has 7 types of warehouse and 12 warehouses such as air-conditioning cargo storage , frozen cargo storage and bonded cargo storage. Also, he has introduced the KART service which is an extensive cross-borders road transportation network connecting ASEAN and China. It will be different from the traditional method which are plane and ship. Kerry Logistics has provided different value added service to their customers, it includes labeling, kitting and GOH. This helps us to know more Kerry Logistic.

Visit facilities:

We have visit Canon's warehouse called Canon Regional Distribution Hub. It is one of the Kerry Logistics' client. First, the staff introduce some service background to us, including incoming shipments, unpacking and outbound shipment. They show us how they add value to their product or service and how they divide the duties to different staff. They also show us how the staff to use the handling machine to move the freight in the warehouse.  After that, we have look around the hub.

Q&A

1.  What are the competitive advantages of Kerry Logistic compare with FedEx, DHL and USP?

Actually Kerry Logistic is different from FedEx and DHL. Kerry Logistic is providing B2B (Business to Business) Service. FedEx, DHL, and SF Express are providing B2C (Business to Consumer) service. Therefore, they are not competitors of Kerry Logistics. Since Kerry Logistics providing the large network service in Asian called KART, Kerry is still the leading logistic company in Asian. Many company will use this services, including FedEx and DHL. Besides, Kerry will invest large amount of money, time in developing their company to have more market share in different region. Therefore, Kerry Logistics have make use of their creative ideas, information technology and their unique services such as KART to be their competitive advantages.

2.   Besides RFID, what technology have you used for inventory tracking?

In Q&A session, the speaker mentioned that the use of RFID is not common for them and their clients due the operation of warehouse. But the RFID technology can  definitely help the company but do not contribute a lot.

Besides, the company is using KerrierWMS for their inventory management system. EDI is used in the system and whole operation. It has bar code and scan pack capability in order to make things more convenient. The unique system has multiple putaway, allocation and picking strategies to  handle different cases. It interlink with web-based logistics operation and offer real time stock movement and the status of inventory.Moreover, various inventory report (eg, inventory adjustment report and cycle count report) can be done in the system.

3.   Unlike your competitors, Kerry is an asset-based logistics company. Obviously, it reduces some uncertain market risk such as the raising rental cost. However, it will potentially reduce the future liquidity and flexibility in long term.  Why do you have this plan or strategy?

Kerry Logistics expressed that hardware is very important to logistic industry. Warehouses are used to store the goods. The capacity of warehouse affects the number of orders that can be handled. Therefore, Kerry Logistics would like to have their own asset to be the warehouses. It can make sure the stability of the capacity of warehouses. As the capacity of the warehouses is stable, Kerry Logistics can depend on the demands and requests to arrange the warehouses.

4.   Recently, Kerry logistic proposes to reconstruct the warehouse to columbaria.  Why does Kerry have this plan instead of expanding the business so that the warehouse capacity can be fully utilized?  Is this action implied that Kerry do have confidence with your core business?

First of all, the warehouse is the asset of the parent company of Kerry Logistics. The strategy of changing the purpose of the warehouse is decided by the parent company. However, it is not because there is any problem of the business of Kerry Logistics.The staff of Kerry Logistics said that the warehouse capacity were almost utilized. As the warehouse, which is planned to reconstruct to be columbaria, is used to store the documents and help the company to scan documents into electrical form, it is easy to transfer this service to other warehouses. Also, parent company may think the columbaria service is more profitable. Therefore, it would like to reconstruct the warehouse to columbaria.

5.  How can Kerry Logistics use the information system to enhance its effectiveness and efficiency?

Kerry has developed a platform called KerrierVISION. It combines with KerrierWEB KerrierSCV KerrierVBO KerrierTrack KerrierEPOD Kerrier T&T. The platform is customized to meet various types of customers. Inventory management, order making and tracking system and other functions are included in the IT systems. Not only the company can use it to manage and monitor their operation but also provide and platform for clients to receive the updated information and data sharing. It can greatly enhance the company's effectiveness and efficiency. It also increases cost effectiveness to their customers.

On the other hand, Kerry has created an application for customers to use their services. Customers can track their parcel through their smartphones and receive the latest information. By using the apps, users can scan the barcode and use electronic signature to handle the parcel. It can directly shorten the operating time and reduce paper work. 

6.   On your official website, you stated that you’ve provided exemplary cleaning and repair services for "your" ISO tanks. It's not clear here if the ISO tanks are provided by Kerry itself or the customer.  Could you please elaborate?

ISO tanks are provided by customers themselves. The ISO tanks can transport bulk liquids of both the hazardous and non-hazardous varieties, in an environmentally friendly way, as well as efficient and safest mode. In Kerry Logistics side, it provides an ISO tank solutions for customers to enjoy full cleaning and repair services of their ISO tanks in order to keep the ISO tanks at the highest standards in the industry.

7.   What do you do to protect the goods from being damaged during transport?

Kerry Logistics has given great care to all the things they handle especially for the high valued goods. For example, they put some bubble paper or blanket into the space of the boxes that can absorb shock so as to avoid the product being hurt. Some will add a stand to fix the product position in the boxes such as Garment on Hanger (GOH) in order to maintain the garment at their best situation.

8.   How does Kerry Logistics compensate their customers for loss due to the damage of goods?

Every time when they sign a contract, they will set up a maximum limit for the liability they can bare for. If there is a damage or loss of goods, they will first check carefully how and why will the damage/loss happened. If they find it is their fault after inspection, they will compensate to customer and try their best to recover the trust from the customer.

9.   How does KerrierVISION support your operation?

The main function of KerrierVision is similar to its mobile app, which is designed to meet the individual needs of every customer. It provides an online platform for users to check the inventories, freight, purchase order and delivery tracking, in order to increased cost effectiveness of the users. Through KerrierVision, users can connect all parties of the supply chain, aims at  monitor the situation well. The usage of KerrierVision is mainly for International Freight Forwarding, it can let users to check the inventory status, even the users are from overseas.

Reflection

It is a great experience for us to learn about the logistics industry and how they can add value to their services. Although we have already known that Kerry Logistics is a very complex and huge company through the pre-visit research, it is still be amazed by the presentation of Kerry Logistics. We understand more deeply about their business structure, operation flow and their different aspect of services. Also, it gives us a chance to learn to work with others and develop interpersonal skill and leadership skill.

References:

PowerPoint presented by Kerry Logistics

http://www.kerrylogistics.com/eng/OUR_EXPERTISE/InternationalFreightForward/iff.jsp

http://www.hktdc.com/services-suppliers/Kerry-Logistics-HK-Ltd/en/1X00L9KP/

http://www.kerrylogistics.com/eng/OUR_EXPERTISE/InternationalFreightForward/roadrailfreight/kart/kart.jsp