Schenker is lending its support to South Korea in its ambition to be a North Asian hub. The integrated logistics group was the first to establish its regional hub at the Incheon Logistics Center, a free trade zone, just minutes from the country's main airport at Incheon.

  
"This is a strategic investment building on the policy of the government to build Korea as a regional hub," said Rainer Kloberg, General Manager, Logistics, Schenker Korea.

The Korea Logistics Center (KLC) serves as a key hub for Schenker in North Asia and a distribution centre for Korea, to complement its network of integrated logistics centers throughout the region.

"For regional distribution, Korea is ideally located and is a complementary facility to Schenker's Regional Hub for Asia Pacific in Singapore for regional distribution," Mr Kloberg.

South Korea's airport and seaport are some of the busiest in the world. Opened for business in early 2001, the Incheon International Airport is the fifth busiest cargo gateway handing in excess of two million tons a year. The country's biggest seaport Busan is the third largest seaport globally in terms of cargo volume, offering the level of connectivity, which few terminals in North Asia can provide.

The good transport infrastructure is backed by the government's willingness to work with industry to develop South Korea's as a regional logistics hub. "Korea is in a learning phase. We are working with the authorities to establish regional hub procedures, providing them with our wish list," said Mr Kloberg.

So pleased was the government with Schenker Korea for its active participation in developing Incheon that President Roh Moo-Hyun presented the Presidential Order of Industrial Service Merit to its CEO Martin Bongard at the official opening of the Incheon International Airport Free Trade Zone on March 30, 2006.
 

The KLC was built and equipped at the cost of US$10.5 million on a 10,000-sq. metre plot leased from the authority. The one-stop facility serves as the base for it's growing contract logistics and  of its bread and butter business - ocean freight and airfreight and the project business related to ocean freight.

The strategic investment into this facility underscores Schenker's confidence in the future of its contract logistics operation in South Korea. With a warehouse and handling capacity of 9,000 sq. metres, it is many times larger than the 1,000-sq metre rented facility it had when it started its contract logistics two years ago.

"The decision was to proactively develop this market. The minimum viable facility to operate is at least 5,000 sq. metres. We are leveraging on our global network, on cross selling of services to our customers," said Mr Kloberg. The KLC also plugs a gap in the company's Asian logistics network, which over the past 10 years has expanded from a single location in Australia to 100 locations across the region providing a total of 800,000 sq. metres of warehousing space.       

Since the company's well-publicised official opening on October 27, 2006, the company has received a flood of enquiries from interested parties and clients have signed up shortly after the opening. "Everyone read in the newspapers that a company like Schenker has invested into the facility. We are very pleased with the number of requests and enquiries for our service offerings," said Mr Kloberg.
 

The main storage extends over two levels, with a temperature controlled room on the mezzanine level targeted at semiconductor clients.

The ground level is fitted with the Schaefer Selective Racking System, which provides a total of 2,434 pallet locations.  Schaefer was selected after a competitive bid, which attracted five companies - two Korean , one Chinese and two international. The Schaefer bid convinced by quality, technical features and compliance with international standards where some face difficulties. "For a facility like this, the reputation and experience of equipment suppliers are important," said Mr Kloberg.

"The choice of Schaefer was due to a mix of reasons," he added. "I've been in the industry for 20 years. My background is engineering. Besides commercial aspects I keep an eye for good construction. I've been working on numerous projects and numerous installations. If you want good quality and good construction, testified compliance with international standards, there are only a few companies here in Asia. I have had experience with Schaefer. As long as the price is right for the quality, Schaefer racks are preferred products."

Configured with a 3.6-metre beam to accommodate three pallets of 1-metre length or four Euro pallets of 800 mm, the racking system has the versatility to meet the broad range of customer requirements.

Painted in Schenker's distinctive red and blue, the racks are equipped with enhanced safety features such as pallet rail to support the pallets and spring post protectors to safeguard the posts against being hit by trucks and forklifts.

The two other levels will be equipped in accordance with customer needs. The three floors are connected by two cargo lifts of 1.6 and 4 tons. Schenker has also made provisions for the installation of an inter-floor conveyor system linking level 1 and 2.   

The KLC is designed with a sizeable handling area, providing a much bigger area than those of comparable facilities. "Many people look at space but they don't look at work flows," Mr Kloberg noted. At 2,200 sq metres, it provides the company with ample space to provide value added services to customers such as kitting, price tagging and localisation, as well as forwarding.

As winter temperatures often dip to -10 degrees C, KLC is heated to 12 degrees C to make it comfortable for warehouse operation.  

With all the systems in place, Schenker is open for business, with the first customers booking in early 2007.    

For more information, please contact:

Schaefer Systems International Pte Ltd

Ann Ng

Tel:    +65/6863 0168

eMail: ann.ng@ssi-schaefer.sg