Singapore has come a long way since gaining independence in 1965. Once a low-income country lacking in natural resources, infrastructure and housing, investment and jobs, the bustling nation is now one of Asia’s wealthiest – an achievement largely bolstered by its emergence as the highest-performing logistics hub in the region, according to the World Bank. The GDP growth of the city-state has been among the world’s highest, at an average of 7.7% since independence and topping 9.2% in the first 25 years.
Capitalising on this rapid growth is one of the region’s leading logistics service providers, Schenker Singapore. By leveraging the global footprint and 140-year track record of its German parent DB Schenker, the Singapore arm was among the first European logistics businesses to serve Asia from Singapore, and has since played an important role in bridging the West and the East. It is now a top air and ocean freight provider in Singapore in terms of volume and production rate, with extensive global reach and best-in-class supply chain solutions.
Backed by more than 30 years of management experience in international shipping and logistics, Schenker Singapore CEO Charlie Kok started his career as a ship navigation officer, then an airline cargo manager. “However, I didn’t like being constricted by the locations the airline would visit. So, I got involved in the logistics industry where the globe is our playing field. In 1986, I joined the international shipping company BAX Global as its Vice President. After we were acquired by Deutsche Bahn and merged with Schenker Logistics in 2006, I was appointed Managing Director of Schenker Singapore,” he explains.
Growth potential
As one of DB Schenker’s largest markets for integrated freight and logistics services, each day Schenker Singapore handles billions of dollars’ worth of inventory for clients across a wide range of industries. “We’ve grown our footprint in Singapore to become a significant player in Air Freight, Ocean Freight, Contract Logistics/Supply Chain Management, Global Projects/Oil & Gas, as well as Fairs and Exhibitions.”
However, the business soon realised it could not depend solely on its growing air and ocean freight divisions. “Singapore’s manufacturing landscape was evolving,” Charlie recalls. “From low-cost manufacturers producing low-value bulky goods, which provided significant freight volume; we saw the shift to more sophisticated and precise manufacturing of high-value goods, that were physically smaller in size. Therefore, we decided to place a strong focus on growing our contract logistics supply chain. Today, we are one of the largest warehouse solutions providers in Singapore.”
History
The success story of Schenker logistics dates all the way back to the railroads in the 19th century when Gottfried Schenker founded Schenker & Co. in Vienna, Austria, in 1872. German railway giant Deutsche Bahn (DB) laid the foundation for a world-renowned combination of logistics leaders — Stinnes AG and Schenker — in 2002, giving both DB and Schenker a rich history and a promising future.
A key part of this process was the adoption of a top-of-the-line computerised warehousing management system. At the core of Schenker’s offering is its ability to adapt and modify solutions for customers across a wide spectrum of industries and specialised vertical markets. Schenker’s Singapore-based information technology development team has since created a wide variety of applications – from a vendor-managed inventory solution for top global blue-chip electronics and computer manufacturers, to a hospital inventory management system for the healthcare sector.
Through continuing strategic investments, Schenker Singapore works hand in hand with the local government to attract foresight investment and cement the nation’s reputation as a world-class logistics hub and leading distribution centre in Asia. “We have very strong partnerships with our suppliers and customers, but what’s most important when working in Singapore is cooperation with government agencies. Compared with many other countries in the Asia–Pacific, over the past 20–30 years we have always had strong relationships with government agencies including the Economic Development Board Singapore, JTC Corporation, and International Enterprise Singapore,” Charlie explains.
“Singapore Customs is also very supportive of our business and it has been crucial in facilitating our trade flow into other countries where the practices may be slightly different from our own. It gave our Singapore business a dedicated customer officer to help us resolve any challenges we might encounter with our customs processes, particularly now that we’re heavily involved in the Singapore Free Trade Agreement.”
“What’s most important when working in Singapore is cooperation with government agencies.”
Doing things differently
As the main supplier and manufacturing base in the world, the Asia–Pacific has the highest growth potential in terms of consumption. To better serve its customers, Schenker Singapore is committed to providing innovative supply chain solutions that challenge the status quo. “As we move into a new digital economy, our business shifts away from the conventional practices of a logistics company. We’ve collected a lot of data during our course of business so we’re now looking at ways to monetise these assets and equip our people with the skills needed to use this data to better serve our customer requirements,” Charlie explains. “By increasing automation, we’re able to collect more comprehensive data and automate a lot of our physical processes at the same time.”
In his 30 years in the industry, the greatest change Charlie has seen is in the response speed. “Everyone wants things done quickly and at the same time. So, we have to stay ahead of the game,” he notes. Schenker has 14 facilities – six of which are purpose-built logistics hubs – throughout Singapore, with a combined footprint of more than 240,000 square metres. To prepare itself for the non-stop influx of foreign investors in Asia, the business continues to invest heavily in automation to handle growing volumes of goods, while increasing reliability, gaining better data visibility, and reducing manpower.
“Robotic process automation, digitalisation and big data are the three main technology areas we’re focused on. Already, we have adopted automatic weight dimensioning for all our operations, as well as automated packing lines and even RF imaging,” Charlie explains. “We’re also building a new facility, Red Lion. Valued at more than €101 million, it is the most expensive investment in the history of DB Schenker worldwide, and our first air freight and contract logistics integrated warehouse.”
Red Lion will provide an innovative end-to-end supply chain solution that will allow Schenker Singapore to meet its customer’s need for highly repetitive and fast-paced operations as well as integrated air freight and contract logistics services, while also offering competitive costs.
“We strongly believe we can improve the shared storage of air imports and exports and contract logistics, helping us to reduce dependency on labour, resolve pooling and optimise warehouse storage space. This is all located in the Free Trade Zone,” Charlie explains. “The idea behind the name Red Lion comes from the fact that Singapore has previously been seen as the little red dot and commented on as such. However, I believe Singapore is a lion city – it’s fierce and able. Now, when people hear the name Red Lion, they immediately associate it with Singapore – the fierce, bright red spot in Asia.”
Spotlight on Singapore
Business
According to the World Bank, Singapore provides one of the world’s most business-friendly regulatory environments for local entrepreneurs and is ranked among the world’s most competitive economies – with a gross national income of US$52,600 per capita in 2017. The country’s Economic Development Board suggests that around 37,400 international companies base their operations in Singapore, including 7,000 multinational corporations – with more than half of those running their Asia–Pacific businesses from the city-state.
Trade
While it may be geographically small – 700 square kilometres, to be exact – Singapore’s trade value amounts to a massive 3.5 times its GDP. Not only is it home to the world’s largest transhipment container port, which is linked to some 600 ports worldwide, but Singapore’s Changi Airport has also been voted World’s Best Airport 2018 by Skytrax for the sixth year running – served by around 6,800 weekly flights to 330 cities.
Passionate people
While automation is changing the face of the logistics industry, Charlie believes it’s important to remember that people come before technology. “Our biggest challenge is also our greatest strength, and that is helping our people to embrace a digital mindset so we’re able to fully harness employee potential. We want to equip our current staff with a new set of skills so we can embrace the digital age together. At the same time, we’re working hard to acquire and retain a new generation of skills and talents that will help us transform and thrive in this new digital logistics environment.”
Schenker Singapore’s workforce comes from all corners of the world and includes people from different cultures and backgrounds, who bring a wealth of international talent and experience. “We have people from India, Germany and France, as well as Taiwan, Korea, Malaysia and China. Our diversity is one of our greatest strengths,” Charlie explains. “We’re also strong supporters of gender equality. In the Singapore business, we have four women in the top management team, including Chief Financial Officer, Chief Commercial Officer, Chief HR Officer and Vice President of CL/SCM.”
Charlie leads his team with the belief that its biggest competitor is itself. “I tell them not to compare themselves or their work to others, and instead focus on leading and always improving. We can’t do the same thing we did yesterday – we have to be better. Our ability to deliver the highest quality of service is what makes us the market leader. We believe in keeping our people motivated and passionate in achieving their best. If we take care of our people, they will take care of our business. This is the secret to business success,” he explains. “We call Schenker Singapore a family because when you think about it, we spend more time at work than we do with our families. So, we aim to build a culture where everyone who joins Schenker Singapore feels like this is their second home.”
Schenker Singapore’s success as a service company relies on the attitudes of its people and their relationships with customers. “We are obsessed with our customers. I always tell my staff, ‘Bring your customer home for dinner’. It’s my favourite tagline and it means that you should be such good friends with your customer that you could invite them and their family over for dinner,” he laughs. “We are a service company, so we don’t own a physical product – we own a service. So, it’s about putting the right people in place to help us achieve our vision. This passion and positive energy is so evident throughout the company that the customers can feel it as well. They can sense the strength of our team and the quality in their service.”
“If we take care of our people, they will take care of our business. This is the secret to business success.”
A sustainable mindset
As the emphasis on sustainable practices continues to strengthen, the global transportation sector is being called on to make a considerable contribution to these efforts. As a leading green logistics service provider, DB Schenker knows that as transport grows, CO2 emissions can be reduced.
“Going green is one of our top objectives, and it’s a mission passed down from our German parent company. A lot of consideration and hard work has gone into making sure our new facilities meet the highest international sustainability standards for our industry,” Charlie explains. “We believe in doing our part for the environment. In our existing facilities, we apply our mantra of constant improvement to make sure we update our operating processes and machinery to the latest in green energy-saving technology.”
“Going green is one of our top objectives.”
In 2006, DB Schenker vowed to reduce specific CO2 emissions by 30% before 2020, and CO2e emissions by 50% before 2030. To reach this goal, it has since launched a variety of initiatives and continues to expand its range of eco-friendly solutions for every mode of transportation, allowing customers to reduce their emissions along the entire supply chain. As a result, the business has successfully cut CO2 emissions by up to 20% in air freight and up to 50% in ocean freight.
A standout in terms of its commitment to the environment, Schenker Singapore is a recipient of the Green Mark Platinum Award, the highest possible accolade from the Building and Construction Authority, for its development at its Tampines LogisPark facility. Schenker Singapore leverages the latest green logistics technology to calculate its customers’ carbon footprint/CO2 emission, and offer recommendations for improvement and optimisation based on the data.
“In Singapore, we are very much encouraged by our head office, our local government and even our customers to focus on both external and internal sustainability practices,” Charlie explains. “We are a leader among transport and project logistics companies abiding by the latest emission regulations for our vehicles. Internally, we encourage our people to avoid paper and plastic use and to recycle correctly. These might be minor changes, but it’s about setting them up in that sustainable mindset.”