He is young and always neatly dressed, and even his job is about getting the details right. Koay Peng Yen "pushes boxes," millions of them, all the way across the Pacific.

"Boxes" are what people in the shipping and logistics industry call containers, he tells China Business Weekly.

Koay, the Malaysian president of APL (American President Lines) Greater China, oversees activities connecting some of the world's busiest container ports. He always needs to manage the constant imbalance in equipment.

"For every four boxes we move out of China, there's only one coming back loaded with goods," he says.

"The rest are all empty."

Koay says this trend is evident across Asia, and it is set to intensify as China, India and other countries on the continent export more goods to the world.

"Back in the 1980s, inbound and outbound exchanges were fairly equal. Since 1993, the imbalance has been getting increasingly more serious."

Containers are appropriate for moving manufactured goods, while bulk ships are the preferred vessels for iron ore and agricultural products, which China is now buying more than ever before. The problem is that shipping companies must shoulder the costs of moving empty boxes and empty ships back to where the next shipment is.

Koay says that APL, one of the world's earliest Chinese trade facilitators (since 1867), has not fallen victim to the industry it helped create, however.

He says he is pleased with what he is doing, and is proud that APL has tripled in size since it merged with Singapore-based Neptune Orient Lines (NOL) in 1997. Now APL and APL Logistics have become NOL Group's global container shipping and logistics units.

The board remains decidedly international, and Ron Widdows, APL's chief executive officer (CEO), is a well-known industry veteran from the United States.

APL is a global container transportation company offering more than 60 weekly services and nearly 300 calls at more than 90 ports in Asia, Europe, the Middle East and the Americas.

APL is sitting where the world's supply chain begins, which has helped to fuel its growth. China is a goldmine, and approximately 45 per cent of APL's US$7 billion global revenues in 2004 involved the country in same way or another.

Sixty-five per cent of trade between East Asia and North America touches China, and between East Asia and Europe, the rate is as high as 68 per cent.

Efficiently managed networks can control costs from imbalances, Koay says, as well as the connections between different links in the supply chain, and between different modes of transportation.

APL has traditionally been strong in its services on the US west coast. Its largest facility is a 240-acre terminal in Saint Pedro, near Los Angeles. It is equipped to reload containers onto trains. Up to 40 to 50 per cent of containers loaded on the California coast are moved out of the state.

Since the beginning of this decade, particularly in 2002 and 2004, port facilities in the Los Angeles area have been under tremendous pressure from Asian trade. Ship operators have now been diverting some of the trade flow to the Pacific Northwest, and even Mexico.

"Singapore is an advantageous trade route, because it is equal distant to both the US west coast and the east coast. (A container ship) travelling either route would take roughly 22 days."

Koay adds that electronic networks, or logistic services based on the technology of supply chain management, can generate greater savings and even profits.

Nearly half of Koay's Greater China team, based in its Shanghai regional head office, is already focusing on logistics and supply chain services, apart from a round-the-clock separate order processing centre for North Asia and the Americas.

The key to supply chain management is to understand clients' business environments, which helps them improve inventory management, he says.

Koay says Michael Dell chose the company as his partner in the shipping side of its famous supply chain. Dell has a major manufacturing facility in Xiamen,which locates at East China's Fujian province.

The government's foresight and continuing infrastructure investment also reinforces APL's confidence in China, Koay says. Since the mid-1990s, many new port facilities have been built along the Chinese coast. The construction of Shanghai's Yangshan terminal, which is ongoing, will further establish the city as one of the world's most important container ports.

APL has the freedom to choose, but not necessarily own, four container hubs on the Chinese mainland. The southern hub, based in Chiwan, Shenzhen, is already in operation. The central hub is Shanghai.

A northern hub has yet to be chosen, he says. Dalian, Tianjin and Qingdao are under consideration, but the catchment areas of all of them are somewhat small. The fourth hub will be near the Yangtze River delta, to move goods from upstream cities to coastal ports, most likely Shanghai.

This will all be matched by even more advanced technologies. Koay is particularly enthusiastic about radio frequency identification (RFID), an electronic label with capacity to hold more commodity information, that industry experts hope will be replace the manually operated barcode system.

In July 2005, APL started to equip its marine terminal in southern California, perhaps the most congested sea transport area in the developed world, with the RFID technology to speed up cargo container processing.

APL claims it can reduce the time it takes to track a container in the yard and prepare it for transport by as much as half a day, by using Real Time Locating Systems at its Global Gateway South (GGS) terminal. This improves terminal efficiency and ensures punctual deliveries to customers.

The innovation at GGS followed the launch of an RFID test centre in Singapore, a NOL initiative in partnership with Sun Microsystems to evaluate RFID applications in a live supply-chain environment.

This test centre was, according to the company, the first RFID facility of its kind in Southeast Asia to provide a full range of packaging and tag testing, compliance and integration services. This also includes training and entry-level 'tag and ship' solutions for customers.

"RFID is admittedly still too expensive for suppliers in the developing world, but large retail merchants will begin demanding it more."

Despite its obvious advantage over barcodes, one RFID sticker costs US$1.

"If that can be lowered to an ideal level, say three cents, then it will change the world. It's all a matter of economies of scale," says Koay.

It boils down to whether having enough users to generate demand. No one knows how much longer it will take for that to happen, but judging from what APL is doing, it looks as if it could come along with the next box to the United States.

(China Daily 09/19/2005 page3)