The Star – CEO Outlook 2006

What are the challenges facing the services industry, in particular in the area of transportation?

The challenges in the services industry, particularly in transport, are multi-dimensional. They include the following:

• Amalgamation or merger of institutions, resulting in a bigger customer base, which in turn gives stronger bargaining powers to the customer.
• Rising expectations of service standards as well as lower prices, forcing the industry to be more productive and efficient.
• Customers looking for more sophisticated, customised one-stop solutions. This poses a challenge to resource planning and human competency of the organisation.
• Rising costs of doing business, particularly among energy-based businesses, whose operations are affected by higher fuel costs.
• Human factor in services industry. Matching human expectations to what they can get and what the organisation can provide.

What is the outlook for your company and the Malaysian economy?

We see the above challenges as the driving force for us to improve. Everyone in the industry faces the same challenges.

The courier service, for the first and last mile, has existed for hundreds of years and will continue to exist. Those who can meet the challenges will make it but those who cannot will drop out of the race. For us, challenges are also opportunities.

The Malaysian economy is quite diversified today and less subjected to the vagaries of any particular sector.

While we see “harsh” challenges in the manufacturing sector coming from countries like China and India, other sectors such as commodities, agriculture, oil and gas, and financial services continue to register healthy growth.

Unless there is a severe recession in the developed economies, the country should continue to progress well towards the Vision 2020 target.

What would be your key strategies and top priorities for the coming year?

We will focus on customising our logistic solutions to such a level that we are able to provide tailored answers to the varied logistic needs of our customers.

Our key priorities, as such, are to continue to invest and develop our infrastructure and facilities, in particular IT, network, processes and fleet team; improve our service standards by continuous improvement in various quality controls; and develop our human capital so that we have a team of excellent service providers.

Do you think local express carriers can compete on an equal footing with foreign carriers on the global market and do you foresee any domestic carriers expanding beyond Malaysian shores, given the difference in the level of technology employed by local and foreign players?

At the moment, it is not possible. This is because most foreign players have a large field in which to grow and expand their businesses, unlike Malaysia, which has a limited population.

Some of the leading foreign express carriers are more than 100 years old and they have evolved from domestic to international operations. The size of a country, population and ability to go global determine the company’s opportunities for growth.

It is also easier for express carriers in developed economies to raise capital to fund their expansion.

For local companies, we have to find our niche market by cooperating with the more established foreign express carriers, learn and grow with them.

The local express carriers possess good knowledge of the local terrain and, hence, are strong in the first and last leg of the express carrier operations. We should capitalise on this advantage.

To expand overseas, we need to build a strong management team and have a global vision.

GDEX has the potential to go regional and replicate its systems and processes in countries that have a similar culture and level of economic development. We are building the necessary human resources to fulfil our plans to expand regionally.