Asia Pacific contract logistics seen to drive growth in Singapore's manufacturing sector

Singapore’s contract logistics business is expected to grow faster than that in most of its Southeast Asian neighbors.

Manufacturers in the Asia Pacific are very positive about the potential impact of contract logistics on their business. Nearly 47% of manufacturers in Asia Pacific believe the development of the contract logistics business will boost their growth by at least 10% over 2011-2012, according to an industry poll conducted by Global Intelligence Alliance (GIA). This compares with manufacturers in Europe (36%) or in North America (48%).

This projected growth rate of contract logistics for industrial manufacturing players is about double Singapore’s 2011 GDP forecast of 5%. This means that the contract logistics industry could be a strong contributor to Singapore’s growth in 2011 and beyond, if industry players here such as APL can tap into the regional logistics needs of manufacturers.

GIA, a global market intelligence consultancy, measures and monitors the contract logistics industry in Asia Pacific. Amongst other findings, GIA also states that:

• Singapore’s contract logistics business is expected to grow faster than that in most other major Southeast Asian countries over the next few years, with the exception of Vietnam.
• The industry trend is reflected in Singapore’s biggest home-grown contract logistics company, APL Logistics, which reported year-on-year growth rates of around 30% during 2010, more than double the rate of growth in overall GDP.
• On average, 46% of all the manufacturing companies in Asia Pacific, Latin America, North America and Europe that were polled believe that growth in contract logistics will drive growth in their business of up to 10%. 

“The industrial manufacturing sector is one of the fastest growing aspects of contract logistics within Asia Pacific, second only to retail. With the strong push by manufacturers to outsource supply chains, improve efficiency levels and capture additional margin in the value chain, contract logistics companies such as Toll, CEVA, DHL, Expeditors, Fedex and UPS should see strong growth in 2011-2012,” said Pete Read, Senior Vice President, at Global Intelligence Alliance in Singapore.

Conducted in late 2010 by, the manufacturing industry poll asked 95 decision makers at global manufacturers of steel, testing and measurement equipment and agriculture and construction products about their main growth opportunities and challenges or threats for 2011-2012.