Supply chain company CHEP to increase investment in nation

Commonwealth Handling Equipment Pool, known as CHEP, expects to deliver over 20 percent of revenue growth this year, which will be buoyed in large part by the promising China market, its global executive said.

"CHEP's revenue in China is estimated to increase 20 percent to 30 percent in 2019, compared with last year," said Qian Yu, Asia president of CHEP, which is a London-based global provider of supply chain solutions listed in Australia.

She said such a growth rate is relatively high compared with CHEP's other markets.

"We feel that for our business, China will usher in a high-speed development period in the next two or three years. Now the economy remains in the process of warming up," she said.

CHEP will continue to invest in the market to enlarge its unit load equipment pool, expand operational networks, and promote products and service innovation and digitalization, Qian said.

For instance, devices enabled by the internet of things will be installed in all of CHEP's equipment to enable digitalized and more agile supply chains. This can help clients better analyze and optimize their logistics and supply chain activities.

Since its entry into the Chinese market in 2006, CHEP has established more than 80 service centers nationwide. The business in China is divided into fast-moving consumer goods and automotive businesses.

In developed countries, 70 percent to 80 percent of shipments for fast-moving consumer goods and retailers are using shared equipment, such as pallets and containers.

"China can deliver a significant improvement in this regard. In the future, China's consumption industry will demand higher-standard stability and flexibility of the supply chain," Qian said.

Asked about the impact of the China-US trade dispute, Qian said the trade friction has damaged the global supply chain to some extent, but companies in the industry can tackle the challenges and mitigate potential risks in a flexible manner.

The Belt and Road Initiative has brought fresh opportunities for CHEP, Qian said, citing the fact that Chinese carmakers and electronic manufacturers who entered the new BRI markets have created demand for the company.

There has also been stronger demand for efficient supply chain solutions, as e-commerce has flourished in China.

It is estimated that the daily express delivery volume generated by e-commerce in 2020 and 2030 will exceed 100 million units and 200 million units respectively in the market, according to a report prepared by the Development and Research Center of the State Post Bureau.

Liu Zicheng, an analyst with logistics information provider tucmedia, said: "Traditional circulation channels have restricted the digitalization of the entire supply chain. If brand owners have no real sales data, they cannot make consumption predictions."

Data will play a more crucial role in the fast-growing consumption industry, and the entire supply chain will undergo tremendous changes in the future, Liu said.