By Darwin G. Amojelar Senior Reporter

SINGAPORE: A market leader in the global logistics industry wants governments in developing countries such as the Philippines to relax customs procedures to gain from the expected growth in trade intra-Asia, with the Middle East and Latin America—or the so-called triangles.

In a presentation, Hermann Ude, chief executive of DHL Global Forwarding Freight said governments in developing Asia should remove trade barriers around customs, administration and inconsistent regulation.
Ude said complicated customs and regulatory procedures around international and domestic trade, lack of efficient infrastructure and substantial lack of qualified logistics expertise increase the price of exports and imports.

He said that almost 15 percent of the supply chain costs are related to customs and trade administration procedures compared with 3 percent for trade between European countries.

Ude said trade growth in the triangles, which is expected to contribute almost 40 percent of global trade by 2028, needs efficient logistics.

“There’s no doubt Asia and the emerging markets will shape the direction and future for economic and commercial expansion. If we look at the global logistics market in 1999, Asia’s share of it stood at 34 percent or $15.57 billion. By 2008 to $339 billion, making up 46 percent—or nearly half of the worldwide market,” he added.

Ude said that by 2015, more than 550 million people in emerging economies will have an annual income higher than $4,000 per year, translating to a household income of $12,000 to $16,000, enough to fuel demand for things such as cars, consumer durables, tourism and higher education.

He said China will contribute 45 percent of the consumer market and other Asian emerging economies will contribute 15 percent.

Within intra-Asia trade, DHL expects China to be responsible for about 40 percent of trade, led by the import of raw materials into China and the export of textiles, industrial machinery, telecommunications, office equipment and foodstuff. Of these, China’s trade with Korea, Taiwan, Japan, Hong Kong and Thailand will continue to dominate trade volumes. Rapidly growing are Chinese exports to India, Indonesia and Malaysia.

While a significant part of the trade within the Middle East-Africa-Asia growth triangle is because of oil and gas exports from Middle East to Japan, South Korea, Taiwan and Singapore, growth on these lanes is stagnant.

“Trade growth within the triangle will come from China’s trade with South Africa, Saudi Arabia, UAE through China’s imports of raw materials—crude oil, iron—and exports of textiles, apparel, machinery and metal products,” DHL said.

Between 2008 and 2012, DHL said Latin America -Asia trade is also expected to grow 4.2 percent or more than double the world trade growth of 2 percent, registering the fastest growth within the three growth triangles.

As an industry leader in the triangle of trade, Ude said DHL will support trade growth with continuous investment in infrastructures and innovation.

He said that DHL has invested $2.2 billion in Asia. Of this amount, $645 million was invested in Hong Kong; $615 million, China; $300 million, India; and $640 million, the rest of Asia.

DHL operates in 42 countries and territories in the Asia Pacific region, servicing 400,000 customers every year. It operates three Express hubs and nearly 50 gateways in Asia Pacific, and has three multinational gateways for less-than-container load shipments.