Taiwan on the rise: Asian shipping demand spurs shipping and logistics development

 

Mr. Kenny So
Managing Director – GAC Taiwan

With its reputation for all things high-tech, spurred by the so-called ‘Taiwan Miracle’, Taiwan has increasingly stepped into the spotlight as an important hub for shipping and logistics in the Asia-Pacific region.

As capital and technology-intensive industries flock to reap the rewards of the nation’s business-friendly regulatory regime, there is also an opportunity for shipping and logistics providers to take advantage of this momentum.

It hasn’t always been easy. Recent container industry consolidation saw the government enact a major bailout of the country’s main shipping lines. But demand for quality logistics and shipping services is growing.

GAC Taiwan was established in 1999, with its main office in the capital Taipei. In 2014 the company expanded to the south for business development opportunities in southern Taiwan. And then, in January 2017, this Kaohsiung office was bolstered with a full complement of shipping services to cater to growing ship agency needs at Taiwanese ports. GAC has observed an increase in port calls for breakbulk, tanker and cruise vessels compared to 5 years ago, reflecting the country’s growing demand for raw materials, oil and gas.

Logistics business in the country is performing well, with air freight, door-to-door and project shipment imports and exports all in demand across Taiwan’s four main ports.

Taiwan enterprise is increasingly working across jurisdictions, and internationally – with factories in other Asian countries like Vietnam and China producing goods that are exported worldwide.

In light of the current market conditions, the by-word has been cost reduction. The economical transportation of cargo is still a priority. One recent trend has been a shift away from air freight towards ocean freight to reduce costs – particularly for regular orders by annual contract, suppliers will plan ahead for production based on the total lead time required, from the delivery of raw materials, manufacture, ready for export and the final delivery to the destination.

And this shift has also created the demand for holistic logistics management solutions through single point-of-contact platforms to track deliveries and ensure goods are transported on time. GAC has invested heavily to become a ‘one stop shop’ for a range of shipping and logistics services. So diversified is the demand that GAC Taiwan has one of the largest service portfolios of any company within the GAC Group.

The Group’s size has allowed GAC Taiwan to react quickly to the demands of the market. GAC’s ‘Hub’ concept – where information about customers’ requirements is shared seamlessly between offices – has allowed GAC Taiwan to establish the country as a centre for a variety of shipping services in its own right.

For example, companies are increasingly demanding ship spares logistics. In response to this demand – and to cater to Taiwan’s burgeoning pool of shipowners – GAC Taiwan joined GAC Group’s centralised Marine Logistics team to co-ordinate ship spares delivery to Taiwan from the Group’s hubs around the world.

The demand for spares has been driven by an increase in seaborne imports, particularly in aid of the offshore energy sector.

The Taiwanese government – as part of a commitment to reduce carbon emissions by 50% by 2030 – has recently pledged to develop major offshore wind turbine projects on the island’s west coast. Project logistics demand is also expected to increase thanks to the carbon reduction legislation, as new methods of power generation come online.

These projects are just part of a wider scheme of investment in Taiwan’s infrastructure. A new LNG terminal, set to supplement those already operational in Taichung and Yung An, will increase demand for that fuel in the medium term, as well as other bulk imports like coal.

Above all, the primary focus of Taiwanese companies has always been on quality service. Avoiding a race to the bottom in terms of price at the cost of efficient, reliable service has been integral to GAC Taiwan’s aims.

Furthermore, Taiwan’s strict HSSE requirements – along with GAC’s own stringent set of guidelines – have helped to keep suppliers in check to ensure corners aren’t cut.

Overall – the shipping and logistics sector in Taiwan paints a clear picture; there is opportunity here – for suppliers willing to offer a range of quality services. Continued development of infrastructure and Taiwan’s export market will fuel a renaissance of the shipping and logistics industries in years to come.