The nation needs to make radical changes to its business environment or risk losing out to Hong Kong as a regional transport hub, experts said yesterday.
"There are a few disadvantages to locating a regional hub in Taiwan," said Andrea Wu (吳王小珍), co-chair of the American Chamber of Commerce in Taipei's transportation committee.
"You cannot find high-quality English-speaking staff, connections to the world are a little more difficult without direct links to China and the financial system is not as advanced as Hong Kong," she said.
The lack of direct links between Taiwan and China tops the list of complaints raised by transportation companies. The first flights for over 50 years between the two sides of the Taiwan Strait were laid on earlier this year to bring Taiwanese businesspeople working in China back home for the Lunar New Year holidays. Those flights had to make a stopover in Hong Kong.
Another problem is that the country often does not conform to international standards in business practice, Wu said. Regulations force airlines to pay compensation for late baggage delivery even when delays are caused by acts of God such as bad weather conditions, for example. International rules exempt companies from compensation payments when delays are beyond their control.
Officials at international express delivery firm FedEx Express Corp said that due to its geographical location, infrastructure and skilled workforce, Taiwan has the potential to be a global or regional headquarters.
"Such an environment would include making Taiwan's international airports and harbors free-trade ports, establishing innovative procedures for commodity inspections, helping logistics operators establish international logistics centers and nourishing the training of logistic personnel," said Eddy Chan, FedEx vice president for China and the mid-Pacific region, and Jimmy Chen (陳信孝), managing director of FedEx Taiwan, in a joint e-mail statement to the Taipei Times.
FedEx has its regional headquarters in Hong Kong.
The comments come as FedEx celebrated the first anniversary of the opening of a trans-shipment center at CKS International Airport.
At an event to mark the occasion on Wednesday the company extended its cut-off time for package collections from 5pm to 7pm for Taipei customers. FedEx operates 56 flights into and out of the center each week.
DHL Worldwide Express is another express delivery company that has shied away from locating its regional headquarters in Taiwan. The company has six "strategic parts centers" in the country, but its logistics centers are located in Hong Kong and Singapore.
A spokeswoman would not say yesterday why DHL did not use Taiwan as a logistics center. DHL employs 1,000 people here and uses 250 commercial flights every week to deliver its packages.
Taiwan does have a fan in United Parcel Service (UPS) Inc, which made the nation its trans-pacific regional hub in the 1980s.
"Geographically Taiwan is ideal," UPS Taiwan's managing director Benjamin Choi said yesterday.
"It is near most Asian cities and CKS airport is hardly ever closed due to weather problems. There is also a lot of talent here," he said.
UPS operates 70 flights in and out of the country every week and employs 630 people nationwide.
Another expert agreed.
"Hong Kong and Kaohsiung are both well-located in the Asia-Pacific region with a high frequency of services," said Jeroen Rozendahl, co-chair of the European Chamber of Commerce in Taipei's logistics committee.