Date
23 January 2017
Small and medium-sized logistics operators always try to stay flexible to make room for fluctuating demand while keeping costs down. Photo: Bloomberg
Small and medium-sized logistics operators always try to stay flexible to make room for fluctuating demand while keeping costs down. Photo: Bloomberg

How small logistics operators push flexibility to the limit

Janco Logistics’ office has only two walls. The other two sides are plastic curtains.

This is just one of the many ways the company ensures maximum flexibility.

“If there are too many goods, we can move the desks closer together and create a bigger warehousing area,” manager Tim Lai says.

Global demand for logistics services are constantly changing and hard to predict.

Unlike big industry players such as Kerry Logistics, SMEs like Janco do not have deep pockets.

They have to be very careful about deploying their limited financial resources.

Residential, office or warehouse rental is costly in Hong Kong.

SME logistics operators try not to get tied down by an expensive lease.

Instead of rushing to invest in a bigger facility during good times, they keep only a certain amount of space and supplement it with short-term contracts on additional floors when there is a sudden surge in orders, Lai says. 

The same approach applies to its human resources.

Operators with multiple warehouses often shuffle staff to meet fluctuating business volumes, thereby keeping the overhead down.

A similar thinking goes for IT infrastructure.

Big firms won’t mind spending a large sum to buy a software license.

Smaller logistics players may start with monthly license schemes and expand the number of users according to the volume of orders.

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RA

EJ Insight writer

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