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Taiwan is well-poised to be regional logistics hub

"Taiwan has an absolute edge."

Steven Kuo, corporate director at Dimerco Express Corp

Taiwan is well-suited to be a regional logistics hub, given its superior geographical location in the Asia-Pacific region, adequate capacity and logistics infrastructure, logistics experts said yesterday.

"Taiwan has an absolute edge to become a logistics pivot in the region in terms of location, capacity and infrastructure," said Steven Kuo (郭海山), corporate director at Dimerco Express Corp (中菲行航空貨運), a Taipei-based company offering freight-forwarding services.

There are seven logistics centers and 183 bonded warehouses and distribution centers in Taiwan, offering services ranging from inventory management, distribution, pick and pack, and after-sales support, Kuo said during a workshop at the 2003 Taiwan Business Alliance Conference.

Low tax rates, the custom's declaration measure and 24-hour customs service are particularly helpful in enhancing the efficiency of the flow of goods, he said.

Just last week, Hewlett-Packard Co announced that its products made in the greater Shanghai area will be transported to Taiwan before redistributing to the global market because of Shanghai's limited shipping capacity.

United Parcel Service Inc (UPS), which chose Taiwan to house its first air-hub operations in 1996 over other ports in Asia, said that the country has many advantages, including business environment, government transparency, global competitiveness and market access.

But there is still room for improvement, said UPS regional vice president James Goh.

Political considerations, which Goh indicated are always an influence in formulating Taiwan's trade policies, should be lifted. For example, he said, in order to protect local industries, the government imposes barriers on certain imports, which may end up increasing production costs of those items.

A more extensive transportation infrastructure is needed to prepare for the constantly growing demand for global trade, Goh said.

Denn Hu (胡殿選), tax partner at PricewaterhouseCoopers LLP's Taipei branch, pointed out that more specialized personnel in the logistics sector are needed.

"We found that Taiwan has highly educated workers, but few are specialized in this industry," Hu said. "We hope the government will improve this [situation] through the education system."

One subject that interested investors was whether foreign companies will be able to run cross-strait transportation businesses if direct links with China are opened, given that both governments have indicated a preference for local carriers.

Frank Huang (黃志鵬), director general of the Bureau of Foreign Trade, said the subject of transport companies will depend on the agreement the governments reach.
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