What is logistics hubs?
In simple words, logistics hubs are “warehouse” where “LCL” cargo is consolidated (Singapore) or “FCL” cargo deconsolidated (Rotterdam).
LCL cargo stands for Less than Container Loads, which means the cargo is not large enough to fill standard cargo container. In this case, the “LCL” term is used for a small number of container that is not enough to fill a container ship.
FCL stands for Full Container Loads. In this case, the “FCL” term is used for a large number of container that is enough to fill a container ship.
For example, French demand for Indonesian shoes maybe too low for direct FCL (Full container load) shipments, thus the cargo must be sent to Singapore to be consolidated with other containers with the same destination. After the “LCL” becomes “FCL”, the “FCL” container ship go to Rotterdam where the cargo will be deconsolidated and sent to each final destination in Europe.
Why Netherlands and Singapore? It is because they have this common advantages to be a logistics hub:
1. Strategic central location
2. Stable business environment
3. Business oriented customs
4. Extensive network of infrastructure (including its IT infrastructure)
5. Flexible, well educated, multilingual, productive labor force
6. Good living conditions
How about Indonesia? can we replace Singapore as a logistics hub in Asia? Hmm,,
It depends on how eager Indonesia wants to change for a better condition,,
At least Indonesia has the first criteria, strategic central location in Asia,,
But we are still far away from Singapore in the rest of the criteria to be a logistics hub,,
However, we can still catch them, and why don’t we start from the infrastructure, human resources, and customs performance?