Interview

“Ensuring a smooth process”

South-East Asia’s consumer markets are growing steadily – in tandem with rising demand for cross-border trucking. How can shippers benefit from this way of shipping goods, and what do they need to look out for? Arjun Kohli, Head of LANDbridge for DB Schenker’s South-East Asia Cluster, provides the answers

Born in India in 1985, Arjun Kohli started his career more than twelve years ago, working for DB Schenker in his home country. Since 2013, he has been involved in cross-border transportation. He is now based in Thailand. Kohli studied in the UK and has a degree in Logistics & Supply Chain Management. Photo: DB Schenker

Mr. Kohli, why should customers consider cross-border trucking for international shipments in your region?

It can save them money and time. Depending on the cargo and the destination, trucking can be faster than ocean freight and cheaper than airfreight shipments. Moreover, it is more flexible, as it can take advantage of new transport routes between neighboring countries or regions and effect fast door-to-door deliveries. With airfreight and ocean freight you rely on fixed schedules. With trucking you can be much more flexible about the route and departure times. Yet to ensure a smooth process, customers should know a few things before organizing their first shipment.

 


What are the things they need to bear in mind?

Firstly, vehicle restrictions bar cargo trucks from entering other countries. Unlike in the EU, where trucks can easily cross borders, commercial vehicles in South-East Asia that are registered in one country are not permitted to enter the other country. For example, Chinese trucks cannot enter Vietnam, and vice versa. There are two exceptions: trucks from both Vietnam and Thailand can enter Laos, and Malaysian trucks are allowed access to Singapore.

 

What are the consequences, in terms of freight handling?

Due to the above restrictions, the cargo needs to change trucks at the key border points, which results in an increased risk of damage. To minimize this risk, logistics providers use the Lift On/Lift Off (LoLo) method, where entire containers are lifted off one truck and set down on another, using a crane. DB Schenker overcame these challenges by implementing efficient cross-border security procedures. Our cargo damage rate is less than one percent, and we ensure smooth daily transportation across borders for many customers, for example in the consumer electronics and telecoms sectors, and also in the fast-moving consumer goods sector.

Cross-border shipments by truck in South-East Asia may have their challenges, but they are often an option worth considering. Shown here is the Chinese border station of Pingxiang, an important link to Vietnam. Photo: Egill Bjarki


What about the formalities?

The countries are working on initiatives to put coherent customs processes in place, especially around regulations concerning consolidation and in transit cargo. We believe that once this is addressed, there is tremendous value to be added, due to the flexibility road transport offers. The standard customs formalities today are similar to those for other modes of transportation. However, border crossings on roads are often quite remote from the regular country-entry points, such as air and sea ports in the main cities. For this reason, and also due to the fact that most customs headquarters are located in the cities, in case of any complications, it could take time to resolve issues like incomplete paperwork or license requirements.

 

How does your team make sure this doesn’t result in delays?

DB Schenker customers benefit from the fact that we have established offices at most key road border crossings, that are staffed by specialized customs teams in each of the South-East Asian countries. This ensures that the shipment is in conformity with all customs regulations before the truck departs for its cross-border journey. With an established provider, the shipper can also take advantage of secure storage and parking facilities at the key border crossings, in case of unforeseen delays.

 

Which other issues need to be taken into account?

The peak seasons! At specific times throughout the year, certain border crossings deal with exceptionally high volumes, resulting in long waiting times. For example, this happens around Chinese New Year, or at end-of-month closing, when some industries push out more cargo than usual. Besides longer lead times, shippers may have to deal with a lack of truck availability and manpower because drivers may not always come back to work straight after the holidays. However, our specialists are familiar with local market conditions and are good at forecasting traffic flows. In addition, DB Schenker partners with other trucking companies to efficiently manage demand fluctuations.

 

What are your plans for developing customer services further?

DB Schenker already has a strong presence at key border crossings. As a team, we continuously monitor the border situations across the network, and this includes keeping an eye on potentially new border crossings: these might result in reductions in lead times or costs, in infrastructure development at borders, and in future trade growth potential for emerging markets like Myanmar and Cambodia. Accordingly, we will continue to invest in and strengthen our network and our team.

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