Editor’s Note | | Decoding the Logistics Supply Chain and Exploring New Opportunities for Investment As an important part of the supply chain, logistics mainly consists of transportation, services, distribution and delivery, warehousing, packaging, and processing. According to the size of the shipment and the distance to the end consumer, the logistics journey can be divided into three segments: the “first mile”, “middle mile” and “last mile”. “First mile” refers to transporting goods from a production factory to a primary fulfilment centre; “middle mile” refers to the transportation of goods from a primary fulfilment centre to a regional distribution hub closer to the end consumer; and “last mile” refers to the movement of goods from a regional distribution hub to the end consumer. In the global logistics supply chain, sea, air, and land freight logistics operate in a strictly controlled and highly co-ordinated environment, in which specialised logistics infrastructure and long-distance transport are used to complete the “first mile” and the “middle mile” transportation. Compared with the above two segments, the “last mile” (from the regional distribution hub to the end consumer) still has room to be optimised in the logistics management. Therefore, there are potential opportunities for the “last mile” to be explored in the supply chain, especially the dedicated return services for the sold goods. | |
| | | Thus, some investors choose to invest in logistics infrastructure, while others invest in the logistics management of the “last mile”. For example, COFCO International, a subsidiary of COFCO Group, held a groundbreaking ceremony for the STS11 terminal expansion at the Port of Santos in Brazil, aiming to become one of the largest terminals at the port. In comparison, JD Logistics has successfully set up its operation centre in Macao through IPIM’s One-Stop Service for Investors and the Investment Committee mechanism, which is focused on expanding its cross-border e-commerce business network. It is worth noting that supported by the Macao Economic and Technological Development Bureau, Hong Kong and Macao Co-operation Affairs Office of Guangzhou Nansha District and the Bureau of Commerce of Guangzhou Nansha Economic and Technological Development Zone, hosted by the Macau Live Association, and in co-operation with Nam Kwong (Group) Company Limited, TikTok Shop and Cainiao Smart Logistics Network Limited (Cainiao), the “One-stop Service for Cross-border E-commerce” has been launched to help solve the problems of the “last mile” logistics management. The development of Macao’s logistics industry is closely related to the demand of import and export trade. In this issue, readers can further learn about the industry trends through the interview with Vice President of the Macau Importers and Exporters Association Mr Wong I Mun. In addition, this issue also shares some business tips on how to improve service to create brand values through the stories of local enterprises. | |
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Industry Topic | | Learning about the Distribution of Global Logistics Infrastructure and Finding Opportunities in Joint Building of the “Belt and Road” The “Global Supply Chain Promotion Report” released on 28 November 2023 pointed out that interconnected logistics infrastructure is the hardware foundation for the smooth operation of the global supply chain. Thanks to the increasingly developed global transportation network and the decrease in transportation costs, and the sea, land and air freight routes linking various economies around the world are able to transport various products to their right destinations, allowing the economic activities in the global supply chain to be carried out in an orderly manner. In the global logistics supply chain, sea freight is the most important mode of transportation, accounting for 80% of the total volume of global trade in physical goods. Currently, there are 20 major maritime routes around the world, mainly in the Pacific, Atlantic and Indian oceans. Land freight is a convenient mode of transcontinental transportation for the global supply chain. At present, there are eight major international railway corridors in the world, namely, the Siberian Landbridge, the Second (New) Eurasian Land Bridge, the Chinese Eastern Railway, the Trans-Asian Railway, the South Asian Railway, the Southern African Railway, the Central Bi-Oceanic Railway, and the Pacific Railroad. Air freight is also an important part of the global supply chain. Currently, the 10 major international routes (North Atlantic Tracks, Far East Air Route, North Pacific Air Route, North America-South America Air Route, Western Europe-South America Air Route, Western Europe-Africa Air Route, Western Europe-Southeast Asia-Australia-New Zealand Air Route, Far East-Australia-New Zealand Air Route, North America-Australia-New Zealand Air Route, Polar Air Route) have formed a global aviation network linking the world. | |
| | | The above-mentioned logistics infrastructure has brought a significant impact on the long-term planning of the “Belt and Road” Initiative. , President of Brazil’s Chamber of Deputies Arthur Lira stated that in the international context of globalisation and connectivity, the proposal to join the “Belt and Road” Initiative would be submitted to the National Congress of Brazil and administrative departments for discussion. In August 2023, the subsidiary of COFCO Group, COFCO International, held a groundbreaking ceremony for the STS11 terminal expansion at the Port of Santos in Brazil, aiming to become one of the largest terminals at the port. Since 2012, China Communications Construction Company Shanghai Waterway Bureau Brazil has taken charge of the maintenance dredging and the infrastructure dredging of the port of Paranagua in Brazil, which has elevated the port’s maximum navigational capacity from 50,000 tonnes to 100,000 tonnes, therefore the port’s operational efficiency and capacity has recorded a significant increase since then. In addition, China Merchants Port Holdings Company Limited acquired the Paranagua Container Terminal in Brazil in 2018, and greatly improved the port’s throughput capacity by investing in the expansion of the terminal and additional berths. It is also worth mentioning that at present, China is Brazil’s largest trading partner, with the majority of Brazil’s international parcels coming from China. Due to the high logistics costs in Brazil, the timeliness of delivery was a huge challenge for e-commerce products. To solve this problem, Cainiao, a Chinese logistics enterprise, opened its Latin American headquarters in Sao Paulo, Brazil, by making use of its self-built express delivery network and the strategic co-operation with the Brazil Post. On the one hand, Cainiao set up smart pick-up lockers for the users of Brazil Post, and on the other hand, the national delivery throughout Brazil was realised with the help of the Brazil Post’s logistics network. The company’s international express delivery business is now growing rapidly in the “last mile” logistics of Brazil, and it hopes to expand this last-mile solution model to more countries in Latin America. |
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| Making Good Use of Macao’s Logistics Infrastructure and Seizing Business Opportunities of Cross-border E-commerce The “Second Five-Year Plan for Economic and Social Development of the Macao Special Administrative Region (2021-2025)” points out that it is necessary to expedite the establishment of the China-Portuguese-speaking countries international trade centre in the Guangdong-Macao In-depth Co-operation Zone in Hengqin, so as to set up a platform for cross-border e-commerce, commodity exchanges and displays, international trade, digital trade development, and SMEs incubation services of the Portuguese-speaking countries, as well as the countries and regions along the “Belt and Road”. Since Macao has a well-established freight network, it is possible for the local logistics industry to explore more opportunities offered by the Plan. In terms of the sea freight transportation, there are a number of cargo ships travelling between Macao and Hong Kong every day. In addition, Macao maintains close freight connections with the seaports of Pearl River Delta region and Singapore. In terms of air freight transportation, the land reclamation area close to the Macau International Airport has substantially increased the capacity of the freight terminal of the airport, and has provided the infrastructural conditions, such as land and warehouses for the future construction of the aviation logistics park. In terms of land freight transportation, the Hong Kong-Zhuhai-Macao Bridge Macao Cross-Border Cargo Transfer Terminal (Cargo Transfer Terminal) was officially put into operation in August 2023. By providing container and bulk cargo transfer services to Hong Kong and Macao goods vehicles, the Cargo Transfer Terminal has opened up a direct land cargo transport channel between Hong Kong and Macao. It is worth mentioning that the Cargo Transfer Terminal basically operates 24 hours a day throughout the year, providing logistics companies with more convenient and efficient land freight transportation. |
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With this well-established logistics infrastructure, it is suggested that investors should seize the opportunities related to the supporting services of Macao cross-border e-commerce. The E-Commerce Promotion Incentives Scheme launched by IPIM aims to motivate SMEs in Macao to grasp the opportunities enabled by the e-commerce development, such as expanding cross-border market and opportunities through effective B2B E-Commerce platforms and exploring the market through the “Internet+” promotion and the innovative sales model offered by B2C E-Commerce platforms. In addition, supported by the Macao Economic and Technological Development Bureau, Hong Kong and Macao Co-operation Affairs Office of Guangzhou Nansha District and the Bureau of Commerce of Guangzhou Nansha Economic and Technological Development Zone, hosted by the Macau Live Association, and in co-operation with Nam Kwong (Group) Company Limited, TikTok Shop and Cainiao Smart Logistics Network Limited (Cainiao), the “One-stop Service for Cross-border E-commerce” was launched in October 2023, providing a one-stop service of cross-border e-commerce logistics for SMEs in Macao. Thanks to this assistance, the goods sold by Macao merchants on e-commerce platforms will be received by the e-commerce fulfilment centre in Macao, and then the customs clearance process of cross-border e-commerce will be carried out, so that Macao’s goods in the categories on positive list of cross-border e-commerce of mainland China can be directly delivered to the end consumers in the mainland. In addition, Macao SMEs that has participated in the “One-stop Service for Cross-border E-commerce” can receive one-on-one consultation services from the Macau Live Service Centre, including platform matching, business training, cross-border logistics, e-commerce warehousing and other services. Also, daily goods transportation will be guaranteed if the merchant can receive purchase orders from the platform, in order to enhance the service timeliness and competitiveness for local merchants’ e-commerce business, and to lower the costs and thresholds for local merchants to participate in cross-border e-commerce. |
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| In this issue, Vice President of the Macau Importers and Exporters Association Wong I Mun, was invited to provide information about the development of Macao’s import and export industry and the opportunities of the logistics industry in view of the development and the history of the association. Based on this interview, the logistics industry trends are also analysed and summarised. |
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“We must use ASEAN (Association of Southeast Asian Nations), Portuguese-speaking countries and the Greater Bay Area to expand our trading scope. “ “The re-export trade via Macao is a way to expand international business.“ “Macao’s customs clearance capacity must be improved.“ Macao has experienced a transformation from a light-industry-dominated economy to service-industry-dominated economy. At the start of the 20th century, Macao had already formed six major labour-intensive industries, namely incense, firecrackers, matches, tobacco, weaving, and shipbuilding. In the 1980s, Macao’s economy evolved into a light industrial system dominated by the garment and knitting industries. At that time, affected by the internal and external economic environment, Macao’s foreign trade was basically in surplus. From the late 1980s to the early 1990s, a large number of local production companies moved to mainland China, resulting in a decreased proportion of the production industry in the economic structure, which then caused Macao’s foreign trade to become a deficit. To this end, the Association was renamed from the “Macau Exporters Association” to the “Macau Importers and Exporters Association” to adapt to the needs of the industry development. With the implementation of the free independent travel policy, the service industry in Macao continued to grow rapidly. In order to promote the appropriate economic diversification, the Macao SAR government has formulated the “1+4” industries development strategy, that is, to continuously facilitate the development of four major industries: traditional Chinese medicine (TCM) big health, modern financial services, high technology, convention, exhibition, trade, culture and sport, in line with the objective of building a World Centre of Tourism and Leisure. At the same time, the national inspection and quarantine regulations for Macao’s exports to mainland China have been gradually revised, in order to promote Macao’s integration into the overall development of the country. According to data from the Macao Statistics and Census Bureau (DSEC), from 2013 to 2022, Macao’s re-export value accounted for an average of 82.5% of the total export value (see Table 1). According to Law No. 7/2003, amended by Law No. 3/2016 - “Foreign Trade Law”, re-export refers to the outbound shipping from the Macao SAR of any goods previously imported, without processing, or of any goods that have been processed but are not enough to acquire the qualification of using the Macao SAR as the place of origin. In other words, Macao’s export trade is mainly re-export trade. In fact, Macao has a variety of advantages in foreign trade, such as its simple and low taxation system and its status as a free port. Through the connection with mainland China, Portuguese-speaking countries, the European Union, ASEAN countries and other regions, it is possible for Macao to become a transit point for multilateral trade exchanges, bringing new opportunities to the development of the logistics industry of cross-border e-commerce. In addition, Macao Trade and Investment Promotion Institute (IPIM) also planned to organise delegations to visit the above-mentioned regions in 2024 to further promote bilateral economic and trade co-operation. |
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All in all, investors should take advantage of the opportunities in ASEAN, Portuguese-speaking countries and the Greater Bay Area to promote the development of Macao’s re-export trade, which could expand our international business and our trading scope. |
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| Invest in Macao | The development of Macao’s logistics industry is closely related to the demand of import and export trade. According to data from DSEC, from 2013 to 2022, the average ratio of Macao’s import value to export value was 8.49. It can be seen that Macao’s foreign trade today is mainly based on imports and the market has the practical demand for channels to import overseas goods. In 2022, Macao’s imports from mainland China accounted for 30.4% of its total imports. Among all source regions for the imported goods, mainland China is the region from which Macao imports the most goods. In other words, it is necessary to strengthen the function of the logistics chain between mainland China and Macao. At present, Macao already has adequate logistics infrastructure in terms of sea, air and land freight. Since Macao is located at the core of the Guangdong-Hong Kong-Macao Greater Bay Area and is positioned as the co-operation service platform for the trade between China and Portuguese-speaking countries, it is possible for Macao to develop its re-export trade from a long-term perspective. Investors interested in the logistics industry in Macao will be welcomed, because the Macao market has room for their sustainable development. |
| | In fact, the Macao operation centre of JD Logistics, a logistics and supply chain company from mainland China, has successfully settled in Macao through the IPIM’s One-Stop Service for Investors and the Investment Committee mechanism. Based on its supply chain network and cargo transportation capabilities, and thanks to the automatic, digitalised, and smart decision-making logistics solutions, JD Macao has successfully achieved self-operation throughout the entire transportation process and the optimisation of sorting and transportation, providing users with intra-city express delivery, mutual shipping and door-to-door delivery services in mainland China, Hong Kong and Macao. Coupled with improved terminal delivery, such as online shopping, JD Macao has brought more convenience and excellent service experiences to the local users. |
| Company Name: JD Logistics Macao operation centre
Services Used: IPIM’s One-Stop Service for Investors and the Investment Committee mechanism. Contents of Services: Assistance in following up on the implementation of the project, including the consultation with the investor, co-ordination with other departments, local recruitment and importing non-resident workers. |
| | For more information, visit the IPIM Services |
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Business Tips | | The services provided by traditional logistics companies are mainly based on the single payment settlement. In order to provide customers with better service experience, some logistics companies offer exclusive tailor-made solutions to create their brand value. For instance, based on the transparent internal operating procedures, some companies offer different charging methods to their customers, allowing them to select the services according to their real needs. This model not only improves the customers’ service experiences due to their better understanding of the entire logistics procedure, but also reduces the operating costs through the rational use of the companies’ equipment and resources. With the advantages of low-cost and high-efficiency, this innovative solution could successfully attract young consumers. Along with the development of the society, innovative thinking is essential for the development of all walks of life. In response to the rapid development of the society, a young team is needed in the company. By making use of the innovative thinking of the young staff and their desire for new things, through team-building and brain-storming, the company could closely keep up with the trends of society. In addition, the company can pro-actively invest in a series of IT systems, including WMS, TMS, HRMS and other systems, to improve its operation efficiency. Such investment could also enable the company to maintain a competitive advantage in the market. Further, advertising in different regions and channels, pro-active participation in promotional activities and exhibitions, and business matching with large enterprises and government agencies can also improve the company’s brand image. | |
| | Interviewed Company: Macan Logistics Limited Every year, a great deal of international companies come to Macao to participate in the Macao International Trade and Investment Fair (MIF) organised by IPIM. Aiming at the opportunities brought by this platform, Macan Logistics actively promotes their logistics and transportation services to potential customers at MIF. Based in Macao, Macan Logistics has its own transportation team to provide customers with tailor-made and information-based logistics solutions. With a business covering every corner of the world, the company provides one-stop logistics services, such as international freight, customs clearance, warehouse management, fleet delivery and cold chain logistics.
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