BRICs should cut red tape and boost infrastructure: DHL chief

DEVELOPING country governments - more than most - would decrease their shipping costs 30 per cent by 2020 if they cut paper work and upgraded infrastructure, says DHL Global Forwarding CEO Hermann Ude.

"Thirty per cent improvement is a big ambition but one that governments, shippers and service providers can achieve and must work towards achieving if countries are to enjoy rising standards of living," Mr Ude said.

Speaking ahead of the Asia Pacific Economic Cooperation CEO summit in Tokyo Mr Ude said that world trade growth, which grew from a third to over 50 per cent is an important driver to economic growth, and that inefficient logistics is a roadblock to market growth.

"For example BRIC [Brazil, Russian, India and China] countries require twice as many export/import documents versus Singapore or Germany," he said. "Paper work can be the single most time consuming element in the life of a shipment, with days lost and costs increasing as products spend time in warehouses."

Of the 60 days it currently takes from order to delivery in a typical ocean freight shipment from India to Mexico, goods were on the move for less than half of that time, with over 323 days spent on export and import documentation and customs.

"Customs and security are of paramount importance in this day and age, but increased physical security requirements alone are not the panacea. BRIC countries do 10 times more physical inspections than best-in-class countries without improving security," said Mr Ude.

"Infrastructure bottlenecks or sub-standard transport facilities can force logistics companies such as DHL to use sub-optimal routes in order to guarantee delivery and this increases costs. For example, insufficient port capacity can lead to 15 per cent to 30 per cent higher sea transportation rates on otherwise comparable routes and these costs come with additional CO2 emission," he said.

"Savings are not the only benefits emerging economies could enjoy. Trade transit times could also be cut by 65 per cent, and 20-40 per cent more trade generated, he said.
(Source:www.schednet.com)