Taipei Times (TT): As a growing number of global players enter the time-delivery industry in Taiwan, what has FedEx Express Corp done to impress clients and maintain its sales momentum to fend off stiffening competition?
Michael Chu (朱興榮): Continuing to launch new services is an important measure to add value to a shipping company’s service quality.
To serve that purpose, FedEx Express runs a research and development team in the US to brainstorm new services and possibilities with our major clients.
In Taiwan, we have expanded the SenseAware service since April, which empowers customers to have better management of their supply chains, to enjoy an extra layer of security and to stay connected to their most critical and environmentally sensitive shipments in near real-time.
Taiwan plays a pivotal role in ensuring the security and consistent flow of highly valuable and extremely time-sensitive shipments, from high-technology components to life-saving medical equipment to confidential documents to jewelry to art and antiques.
With this newly launched monitoring service, local customers from the healthcare, life sciences, high-technology, aerospace, the arts, high-end merchandise and financial sectors can have more actionable intelligence at their fingertips.
TT: Have any FedEx Express customers in Taiwan adopted the SenseAware service since April?
Chu: Various clients have discussed with us about feasibility of using this service. We expect some of these customers to adopt it by the end of this year.
TT: Other than the launch of new services, is the flourishing e-commerce industry still the major driver for FedEx Express’ business growth in Taiwan this year?
Chu: Absolutely. Citing the latest data offered by the Institute for Information Industry [財團法人資訊工業策進會], the output value of e-commerce sector in Taiwan reached NT$767.3 billion [US$25.52 billion] last year, and is expected to reach NT$879.6 billion and more than NT$1 trillion this year and in 2015 respectively.
To accommodate the wide range of shipping demands and offer peace of mind for online shoppers, FedEx Express continues to improve its suite of services by providing extra package options and faster return services.
TT: In terms of the time-delivery business, could you share the characteristics of the market in Taiwan when compared with other global markets?
Chu: Unlike other markets, small and medium-sized enterprises [SMEs] are a more important growth driver for fueling momentum to FedEx Express in Taiwan.
Based on government data, SMEs make up 97.67 percent of all businesses in Taiwan, while employing 78.11 percent of the workforce and contributing to 17.9 percent of exports.
For meeting demand from local SMEs — which are more sensitive to prices — FedEx Express offers more flexible services in Taiwan, giving our clients the option to ship their goods in a more economical way, which may not be that fast, but with a more affordable price.
TT: Taiwan has found it difficult to restore the double-digit increases in the growth rate of its outbound shipments following the global financial crisis in 2008. Has the demand on FedEx Express indicated any trend for Taiwan’s exports in the second half of this year?
Chu: The company’s business is kind of like a leading indicator to a market’s economy that can be a measure of the outlook for the next four to six months. Based on the demand over the past few months, we have maintained a bullish outlook for Taiwan’s exports in the rest of this year.
The company is not allowed to provide earnings results for a single market, but in terms of the whole group, FedEx Corp reported earnings of US$2.46 per diluted share, or net income of US$730 million, for the fourth quarter ended on May 31.
TT: Overall, could you share the challenges facing the time-delivery sector in the future?
Chu: Supply chain in this age of the ‘Internet of Things’ is no longer just about cost and speed, but also information. That urged FedEx Express to focus more on the transformation from e-logistics to smart-logistics, with the launch of new services to be an important part of this strategy.
Meanwhile, the concept of green logistics has been more widely adopted in the industry, with FedEx Express also set to continue its fleet upgrade plan to be more energy-efficient and improve cost structure in the long run.
Currently, the company is modernizing its air fleet worldwide by introducing more fuel-efficient Boeing Co’s 757 and 777 series freighters and phasing out less-efficient aircraft, while introducing an increasing number of greener vehicles worldwide on the ground.
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