CWT: Asia’s No.1 freight forwarder sees higher NVOCC demand

Elson Ng, CEO of GMG Global, presenting. Photo by Sim Kih

Financial PR organised a conference featuring presentations by the management of three companies yesterday, the first of a two-day event.

The first day featured CWT, GMG Global and Westminster Travel.

Over 30 analysts, fund managers and investors attended.

Westminster Travel finance director Henry Chu presenting. Photo by Sim Kih

Today, the second day of the conference, four companies will make presentations - Thomson Medical, Leeden, Marco Polo Marine and Sinotel.

Below we present a report on CWT.

Singapore's logistics players players offer the best value-for-money in Southeast Asia, says CEO Loi Pok Yen. Photo by Sim Kih

THE OUTLOOK FOR Singapore's logistics players will improve over the next few years, said CWT CEO Loi Pok Yen.

Interestingly, as a result of the global trade finance crunch, he envisages rising demand for CWT's 'less-than-container load' freight forwarding.

But first, some background on the logistics industry.

Generally, commodity producers ship their goods using bulk carriers while manufacturers ship their goods using containers.

What happens when a manufacturer needs to ship an overseas order that is not big enough to fill the smallest standard container size, which is the TEU or twenty-foot-equivalent unit?

The TEU has space for about 5.7 meters X 2.3 meters X 2.3 meters of cargo with net load of up to 28,200 kg.

The global trade-financing crunch is spawning more and more shipment sizes that would leave much unused space in the TEU, according to Mr Loi.

He sees demand for CWT’s “less-than-container load” freight forwarding service increasing.

That is because manufacturers need not hire an entire container from a shipping line, but can rent shipment space measured by the pallet from CWT Globelink. A pallet base can be as small as a meter by 1.2 meters, with cargo stacked up to several meters.

Also known as “Non-vessel Operating Common Carrier” (NVOCC) because it provides shipping services but does not own vessels, the NVOCC books cargo space in bulk on container vessels and resells the space in smaller sizes.

While there are thousands of cargo consolidators, CWT Globelink is one of less than 10 in the world with an international destination network, said Mr Loi.

It is currently Asia’s No.1 NVOCC freight forwarder. NVOCC freight forwarding contributes about half of CWT revenues.

Logistics supply chain management contributes another one-third to CWT’s top line. This includes import and export processing, warehousing, inventory management, local, regional and global distribution, collateral management services, and record management services.

Mr Loi said CWT is focusing on chemical and commodities logistics where it is “king of the hill”.

CWT builds all its warehouses. Above: its 545,000 sq-ft logistics hub in Singapore with a wide vehicle ramp, making the facility many times more efficient than cargo lifts.

The company is Asia’s no.1 chemical logistics player, serving world leading chemical companies such as BASF, DuPont, Shell Chemicals, ISP and Sumitomo Chemicals.

It is also one of a few supply chain management companies licensed by the London Metal Exchange to warehouse non-ferrous and non-precious metals.

Indeed, it manages over 7 million square feet of warehousing space across the globe - in Singapore, China, Thailand, the UAE, Belgium, Netherlands, UK and Africa.

With the slowdown container shipping, one area where demand is looking up is container depot rental. CWT is Singapore’s largest container depot owner with capacity to store over 20,000 TEUs.

Previous related story on CWT:
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CWT: Asia’s No.1 freight forwarder sees higher NVOCC demand

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