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   Vol. 16 No. 63
Tuesday August 8, 2017

Dimerco Upward Beat Goes On
Dimerco Upward The Beat Goes On
     Dimerco Express Group is already one of Asia’s largest forwarders and 3PLs, but the Taiwan-based company has global ambitions and air freight is central to its strategic blueprint.
      Last year Dimerco handled 219,000 tons of air cargo, up 8.4 percent year-over-year. Volumes were buoyed by expansion of the company’s North America and European operations, which saw year-on-year growth of 28.5 percent and 29.2 percent, respectively.
      Joey Chou, Corporate Vice President, Business Development, told FlyingTypers that further growth has followed this year. “For 2017 Q1, the year-to-date sales revenue of Dimerco Express Group is around USD $125 million, a 6.9 percent un-audited increase compared to the same period last year,” he said. “By region, we saw 17.9 percent year-on-year growth in our China and Hong Kong operations and 32.5 percent for Europe.”
      Dimerco’s global network now takes in over 140 business locations in 17 countries in Asia, Australia, North America, and Europe, along with more than 190 strategic partner agents covering the rest of the world.

Looking South As Business Adds Up

      Chou said he was optimistic on air forwarding markets for the rest of 2017, not least because Vietnam, the Philippines, Indonesia, and India were becoming key markets for electronics and mobile phone production and/or demand. “Traffic growth has been fastest on international routes within Asia, as well as between Asia and Europe,” he added. “And the reason could be that GDP growth in the ASEAN region is forecast to be 6.4 percent in 2017.”

Protectionism Not Needed

      As for the U.S., he said a possible shift toward protectionism represented a substantial risk, but a risk that had not yet become reality. “Asia is particularly vulnerable to a decline in global trade because the region has a high trade openness ratio, with significant participation in global supply chains,” he explained. “However, since the Asia Pacific region remains the engine of global growth and the economic conditions of major countries are stable, the future of United States’ trade policies and agreements with its critical trading partners, such as China and India, would be the key.”

Strong Market Base

      Dimerco’s home market of Taiwan, with its raft of multinational electronics companies, has also provided strong base cargo flows. “For 2017 Q1, the year-to-date growth rate of overall sales revenue of Dimerco Express Group in Taiwan is around a 7.6 percent increase compared to the same period last year, with the tonnage up around 22 percent,” he said.
      “Semiconductor and consumer electronics are the main industries, which account for more than 50 percent of airfreight services that Dimerco provides to worldwide customers.”

An Ocean Of Opportunities

      Dimerco, like many other global forwarders, has also benefitted from the shortcomings of ocean freight this year. It has prompted modal shift, which saw strong uplift demand out of Hong Kong, Shanghai, Beijing, Guangzhou, London, Milan, Frankfurt, and Chicago. But Chou said shippers were also now looking beyond ocean and air, not least via the company’s Cross-Border Train Freight service, which connects China with Europe, Central Asia, and Russia via train. Dimerco has offered the CBTF for almost seven years now and Chou said clients could benefit from 16-day transit times—around 20 days faster than ocean freight—but with only 30 percent of the cost of airfreight.
      “With the booming of block trains, more and more customers have switched to this service,” he added.

Immature Digital Forwarders

      Chou was also strident when asked how online forwarding companies might disrupt the businesses of incumbents. He said most digital forwarders were “immature at this stage” and would have a limited impact on established players until they learned to fully meet the service requirements of shippers. He also claimed that at present new entrants could “only provide services for general cargo” and could not meet “the complicated requirements” of real world forwarding.

Disrupting The Disruptors

      By contrast, he insisted providers such as Dimerco provided tailor-made solutions and countered the threat from disruptors by investing in new technologies that improved services.
      Supporting his point, Chou said Dimerco had recently launched its own web-based supply chain tracking product called Dimerco Value Plus System.
      “This system includes up-to-date, end-to-end air and ocean freight shipment status tracking, and inventory and warehouse transaction status and reporting,” he said. “To accommodate the specific requirements of industry, we can customize and incorporate any additional information required to optimize visibility of shipments.”

eCall Unifies Data

      To further improve service levels, Dimerco has also developed an “eCall Freight System,” a platform that unifies data streams and information flows with local logistics partners. “Furthermore, Dimerco will create a big data base to improve the safety of cargo freight and maximize the operation efficiency and the service quality,” added Chou.

Future Innovation

      Looking beyond 2017, he said innovation would be critical to the sustainable development of Dimerco’s air freight business.
      “Dimerco keeps pace with consumer demand,” he said. “For example, by employing our innovative IT integration capability and forming solid relationships with reliable last-mile carriers, at the end of 2016 Dimerco started working with Revolve Clothing, a well-known, Los Angeles-based luxury clothing and accessories brand, enabling online consumers in China and Hong Kong to enjoy a comprehensive shopping experience with faster, trackable delivery of their goods.
      “Dimerco also leads the way in establishing a new B2B2C business model, which offers remarkable savings in freight costs and relies on the close co-operation between online fashion retailer, freight forwarder (Dimerco), and local couriers.”


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