Content

1.0 Introduction -----------------------------------------------------------------------------------------------2

1.1 Operation BY Hock Cheong Transportation-------------------------------------------------------2
1.2 SWOT Analysis of Hock Cheong---------------------------------------------------------------------3
1.3 Challenges Faced By Hock Cheong Transportation in Its Operation------------------------3
1.3.1 Long Lead Time due to Unavoidable Delay----------------------------------------------------4
1.3.2 Fluctuation of Petrol- Crude Oil Price----------------------------------------------------------4
1.3.3 Exchange Rate-------------------------------------------------------------------------------------4-5
2.0 Becoming A Truly Global Company in Providing Total Supply Chain Solution-----------5
2.1 Total Supply Chain Solution------------------------------------------------------------------------5-6
3.0 Technologies That Assist Hock Cheong in Realising Its Potential-----------------------------7
3.1 E-commerce--------------------------------------------------------------------------------------------7-8
3.2 Global Positioning System (GRS) System--------------------------------------------------------8-9
3.3 Automated Warehousing and Material Handling System--------------------------------------9
3.4 Online Tracking-----------------------------------------------------------------------------------------9
4.0 Conclusion---------------------------------------------------------------------------------------------9-10
5.0 Reference----------------------------------------------------------------------------------------------11-12

1.0 Introduction
Hock Cheong Transportation Company started it operation back in 1945. The company started it operation by
delivering and distributing newspaper, trailers and movie films in Malaya and Singapore (Hock Cheong,
2014). Since its establishment, Hock Cheong Transportation has grown dramatically and strongly by
providing one-stop integrated logistics services to business in Peninsula of Malaysia, Sabah and Sarawak,
Singapore and Brunei. The one-stop integrated logistics services provided includes door-to-door and project
cargo deliveries; warehousing and distribution; land, sea and air transportation delivery and other logistic
related value-added services (Hock Cheong, 2014). Growing of Hock Cheong Transportation has made the
management to organize its business into different subsidiaries such as Hock Cheong Logistics Pte Ltd and
Hock Cheong Forwarding Pte Ltd (Figure 1). It makes the management of business easier and efficient and
effective because different employees and subsidiaries in charge of different business.
Figure 1: Affiliate Companies of Hock Cheong Group

Hock Cheong Forwarding Pte Ltd

Hock Cheong today Pte Ltd

Hock Cheong Logistics Pte Ltd

Source: Hock Cheong (2014)

Hock Cheong Transport Co. (S) Pte Ltd
Source: Hock Cheong (2014)
1.1 Operation BY Hock Cheong Transportation
Hock Cheong Transpiration is an effective company whereby its businesses in three different countries:
Malaysia, Singapore and Brunei is facilitates its operation by its own network branch in each countries. In the
late 1990s, Hock Cheong Transportation provides additional services to its existing and potential clients in
ASEAN regions such as warehousing, distribution, and freight forwarding. Moreover, Hock Cheong also
partners with other logistics companies in other ASEAN regions as well. Although its 69 years in pioneering
logistic services, Hock Cheong Transportation also faces intension competition from local and foreign
2

competitors, namely DHL, Li and Fung Logistics and Tiong Nam Logistics and others. Moreover, there are
also challenges faced by Hock Cheong in its operation.

1.2 SWOT Analysis of Hock Cheong

Despite Hock Chong business efficiency and effectiveness in operation for almost 7 decades in business.
There are weaknesses in Hock Cheongs business and opportunities and threats. Therefore, the SWOT
analysis provides a deep understanding of Hock CheongTransportation. By fully utilizes strengths and
opportunities to overcome weaknesses and minimize threats, Hock Cheong is in a big step in becoming a
truly global company and practicing total supply chain management to its clients.
Table 1: SWOT Analysis of Hock Cheong
Strengths

Weaknesses

1. Has been in operation for 69 1

Family owned business.

years.
2. Has its own strategic partners in

ASEAN regions

Main market: Malaysia, Singapore

and Brunei

Opportunities
1. Incentive

Threats
by

Malaysian 1 Fluctuation of the petrol price

Government.
2. ASEAN Intra-trade

3. Dramatic expansion of external

trade in ASEAN regions such as

China, Singapore and Vietnam

Compete directly with international

logistics companies

3.Natural disaster

1.3 Challenges Faced By Hock Cheong Transportation in Its Operation

3

There are many challenges faces by logistic providers today (Logistics Quarterly, 2014). However, there are
only few prominent challenges faced by Hock Cheong will be discussed in this section. (1) long lead time
due to unavoidable delay, (2) fluctuation of petrol- crude price oil, (3) exchange rate

1.3.1

Long Lead Time due to Unavoidable Delay

Unavoidable delay from controlled and uncontrolled circumstances such as natural disaster and uncertainty in
transportation will lead to long lead time and thus incur high operation cost to the company. Lead time is
crucial for logistic provider as shorter lead time will affect customers satisfaction. According to Luck
(2006), lead time is crucial in determining consumers satisfaction.However, delivery of goods to other
companies in other countries out of Malaysia might take longer time. This is because of different procedures
at custom check point and documents required for submission are different as well. Sometime, the address
given by the customers is incorrect and it will also lead to long lead time.
1.3.2

Fluctuation of Petrol- Crude Oil Price

Figure 2: Crude Oil Price

Source: InfoMine.com (2014)

Figure 2 shows the fluctuation of crude oil and it is crucial for logistic provider as it will impact the
profitability of the Company. Therefore, increase of crude oil price is one of the challenges for Hock Cheong
Transportation. Increase of operation expenses means increase cost to do business. Eventually the increase
cost will be transfer to the customers. Some of the customers might change its logistic service providers
when it can provide same service at cheaper price.
1.3.3

Exchange Rate

Political, economic, social and technological factors that happen in the country will affect the rate of
currency. Therefore, fluctuation of currency is also one of the challenges for Hock Cheong Operation as the
company involves cross-boundary delivery to Singapore and Brunei. According to Investopedia (2014),
weaker domestic currency stimulates exports and makes imports more expensive or otherwise.Therefore,

logistic providers need to adjust their rates in order to ensure that they remain economically viable. The
exchange rate of the country might also impact Hock Cheongs performance and growth.
2.0 Becoming A Truly Global Company in Providing Total Supply Chain Solution
According to Sum et al. (2001), the potential for growth for logistics companies is very promising in Asia
Pacific region. This is due to the expansion of external trade in countries such as China, Singapore and
Vietnam. For example, Singapore; strade in February 2014 increased 8% compared to January, and it is
boosted by higher exports of pharmaceuticals and petrochemicals (Trading Economics, 2014). Therefore,
Hock Cheong can grape the opportunity and compete directly with other local and international competitors
such as DHL and Tiong Nam Logistics by adopting total supply chain management. Objective of adopting
total supply chain management is expected to help Hock Cheong to explore international market, becoming
more effective and efficient in its operation and reducing operation cost.
Moreover, the total supply chain solution has also been provided by local and international players in the
logistics industry. Example, Fedex, ODW Logistics, Spincer Boy Transportation, Shin Shin Japan and
Transways Logistics Sydney. It shows that total supply chain solution is a best practice to gain more market
share and become a truly global company. In addition, Hock Cheong needs to also releasing its business
based on other SMART objectives as well. This will help Hock Cheong to growth stronger and becoming a
truly global company. The example of SMART objectives apart from adopting total supply chain
management is shown in Table 2 below.
Table 2: Objectives That Might Be Set by Hock Cheong transportation
1. Fully providing total supply chain solution to its clients by end of 2014.
2. Achieve ISO 14000 environmental management in 2016.
3. Maximizes the use of technology in business and increase revenue by 10% at the end of 2014.
4. Expend international market share by 5% in 2015.
5. Making Hock Cheong a preferred brand by business and individual clients.
5

2.1 Total Supply Chain Solution

According to Levi et al. (2008), supply chain management is a set of approaches utilized to efficiently
integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed at

the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while
satisfying service level requirement.
The possible total supply chain solution by Hock Cheong is shown in Figure 3. Hock Cheong Transportation
can provide total supply chain solution to its clients. Hock Cheong has already an one-stop integrated
logistics services providers whereby it is specialize in door to door and project deliveries, land transportation
with air freight and sea services, warehousing, distribution, customs documentation and port clearance,
freight forwarding and total logistics. Moreover Hock Cheong can other value added services which is useful
in realizing its potential to become international player as well. Example of value added services that can be
provided by Hock Cheong.
1. Supply of ISPM-15 compliant pallets
2. Fumigation services
3. Project cargo crating
4. Stuffing &unstuffing of containers
5. Haulage services
6. Port-to-port bonded transshipment
7. Heavy lift & special transportation
8. Escort traffic services
9. Cargo consolidation
10. Short term warehousing services
11. Shrink wrapping & packing
12. Labelling& marking
13. Insertion of warranty card & manuals
Figure 3: Possible Total Supply Chain Solution by Hock Cheong

Overseas

Distribution Office

Warehousing
Receiving

product

Import Freight

Customs

Purchase order

Management of

Landed costs

management

Ocean & Air

Electronic entry

Warehousing

Bonded
warehousing

Consolidation

Purchase order

(cross

follow up

docking)

Liaise

Store packing

suppliers

Labeling,

&organize
&

packing

Preparation

of

documents

Full

Internet

tracking system

of imports

Storage

Pre clearance

Pick & Pack

Draw

back

processing

Technical

valuation

Full

classification

domestic

Delivery to end
user

transport
coverage

Internet
availability

with

scanning

transportation

and

Internet
tracking

Dynamic

Internet

cartage

tracking

delivery

and

solution
A lot of the total supply chain solution that can be provided by Hock Cheong requires the help of technology.
Therefore, Hock Cheong needs to invest heavily in technology to help the company to realiseits potential.
3.0 Technologies That Assist Hock Cheong in Realising Its Potential
According to ODW Logistic (2014), Technology is able to manage customers distribution effectively and
correctly and it helps to solve supply chain problems.At the same time, Marchet et al. (2009) mentioned that
Information and Communication Technology has several tools that helps logistic companies in realising total
supply chain solution to its clients.Cheetah (2014) also stated that technology helps logistics companies
prosper. Therefore, Hock Cheong can invest heavily in technologies in order to realise its potential to
becoming global logistics company.
3.1 E-commerce
Hock Cheong needs to invest in E-commerce in order to penetrate more market share. Giant logistics service
provider such as Fedex is also adopting e-commerce in its business. E-commerce is the trend of doing
business today. It brings a lot of benefits to both companies and consumers. The benefits of adopting Ecommerce will be enjoyed by Hock Cheong are as following. Tseng et al. (2005) stated that a successful E7

commerce is determined by the optimal logistic operation as well.

A. Expend the market from regional to global
B. Promote companys efficiency and competitiveness
C. Number of single trip/ delivery is reduced

D. Reduces warehouse and the stock cost

In terms of the benefits to customer, customer can access to logistics services at anytime, anywhere without
physically appear at the logistics service providers company. Moreover, it helps customer to save time and
money as well. The figure 3 below shows the differences between traditional trade and e-commerce.

Source: Tseng et al. (2005)

3.2 Global Positioning System (GRS) System

Tsai (2005) stated that GPS system enable tracking physical goods at real-time greatly improves logistics
performance, cost efficiency and customer satisfaction. Moreover, Malladi and Agrawal (2002) mentioned
-that GPS system is a space-based radio positioning system that provide 24 hour X 365 days, 3 dimensional
position, velocity and time information to suitably equipped users anywhere on the surface of the Earth.
Other benefits of applying GPS by Hock Cheong (1) increase security of company asset, (2) allows
consignments to be tracked faster and easily, (3) improve drives safety and enhance productivity. In order to
be a global players in providing total supply chain solution to client, GPS will give extra confidence to its
clients and help to minimize operating cost to Hock Cheong. Other giant players such as DHL, FedEx is
applying GPS in their vehicles as well.
8

3.3 Automated Warehousing and Material Handling System

In order to achieve objective its potential, Hock Cheong needs to also invest the automated warehousing and
material handling system in its warehouse. The example of automated warehousing and material handling
system are conveyor system and stacker cranes. Those effective material handling equipment is useful in
transportation of bulky and heavy materials and reducing picking error (Industrial Storagemhs, 2014) and
thus reduce time of handling materials and increase productivity. Heavy investment need to be made by Hock
Cheong, however, Hock Cheong it will help Hock Cheong to increase its revenue and customer base in longrun.

3.4 Online Tracking

Reviewing Hock Cheong Transportations website found that Hock Cheong does not has any online tracking
system in the website. However, many other local and international logistics providers have already provide
online tracking conveniences to their customers. Therefore, Hock Cheong needs to benchmarking other
business approaches for better growth and transportation of its business. Online tracking allows customers to
easily trace the status of their shipment using the Internet.

4.0 Conclusion
After reviewing Hock Cheong operation, Hock Cheong needs to adopting benchmarking strategy in order to
compete with local and international. Moreover, Hock Cheong Transportation needs to invest heavily in
technologies and applying total supply chain solution to its clients and at the same time aligned with other
objectives in order to become a truly global company. It is crucial as Hock Cheong needs to enhance its
existing performance to create its own competitive advantage and its own customer base. It is a win win
situation for both Hock Cheong and customers. With those investment and approaches, Hock Cheong is able
to deliver better value and helping its customer to reduce costs. Delivering value and reducing costs will be
shown in the Table 4 below. The tangible and intangible benefits which will be enjoyed by Hock Cheong is
shown in Table 5 below.
Table 4: Delivering Value and Reducing Costs
9

1. Reducing clients acquisition cost

2. Reducing clients transactional costs

3. Reducing clients down time through improve deliveries

4. Reducing clients inventory costs and capital invested
5. Reducing clients transport and logistics costs

Table 5: Possible Tangible and Intangible Benefits

Tangible
1. Reducing operating cost
2. Increase profit
3. Enhance companys reputation
4. Increasemarket shares
5. Explore global market

Intangible
1. Save time
2. Better customers

experience

and

satisfaction
3. Better relationship with clients
4. Increase productivity

10

5.0 References
1. Cheetah (2014) Technology helps logistics companies prosper. [online]
Available at: http://www.cheetah.com/news/technology-helps-logistics-companies-prosper

(Accessed 17 March 2014)

2. InfoMine.com (2014) Historical Crude Oil Prices and Price Chart. [online]
Available at: http://www.infomine.com/investment/metal-prices/crude-oil/all/
(Accessed 17 March 2014)
3. Investopedia (2014) Interesting Facts About Imports and Exports. [online]
Available at: http://www.investopedia.com/articles/investing/100813/interesting-facts-about-importsand-exports.asp
(Accessed 17 March 2014)
4. Hock Cheong (2014) About Us. [online]
Available at: http://www.hockcheong.com.sg/about
(Accessed 17 March 2014)
5. Induatrial Storagehms (2014) Advantages of using material handling equipment for industry storage.
[online]
Available at: http://industrialstoragemhs.blogspot.com/2011/02/advantages-of-using-materialhandling.html
(23 March 2014)
6. Levi, D.S., Kaminsky, P. and Levi, E.S. (2008) Designing and Managing the Supply Chain. Concepts,
Strategies, and Case Studies. 3rd edn. The United States: McGraw Hill.
7. Logistics Quaerterly (2014) The impact of exchange rate on supply chain management. [online]
Available at: www.logisticsquarterly.com/issues/10-1/article3.html
(Accessed 17 March 2014)
8. Marchet, G., Perego, A. and Perotti, S. (2009) An exploratory study of ICT adoption in the Italian
freight transportation industry, International Journal of Physical Distribution and Logistics
Management, 39(9), pp. 785-812.
9. ODW Logistics (2014) Technology. [online]
Available at: http://www.odwlogistics.com/technology/index.htm
(Accessed 17 March 2014)
10. Sum, C.C. and Teo, C.B. (2001) Strategic Logistics Management in Singapore, International
Journal of Operations and Production Management, 21(9), pp. 1239-1260.
11

11. Trading Economics (2014) Singapore Trade Surplus Increases in February. [online]
Available at: http://www.tradingeconomics.com/singapore/balance-of-trade
(Accessed 17 March 2014)

12. Tsai M-C (2006) Constructing a logistics tracking system for preventing smuggling risk of transit
containers, Transportation Research Part A, 20(2006_, pp. 526-536.
13. Tseng, Y.Y, Yue, W.L, and Taylor, M. (2005) the role of transportation in logistics chain,
Proceedings of the Eastern Asia Society for Transportation Studies, 5 pp. 1657-1672.

12