TNT, the world's leading provider of express, logistics and mail services, yesterday announced that it will launch its logistics flagship suite Matrix transportation management system in China as a powerful technical support for its business expansion on the Chinese mainland.

"By using this advanced IT solution, TNT can be more competitive in the market as well as better serve its clients," said Karl Mackey, operating director of Automotive Logistics TNT China.

The ineffective IT infrastructure has become one of the main reasons for China's high logistics costs and increased use of advanced IT tools like Matrix will drive down logistics costs, Mackey said.

Logistics costs, which amount to an average 7 per cent of sales at large companies, are being pushed up by rising fuel prices, transport capacity shortages and increased security checks on international cargo because of the threat of terrorism, TNT insiders said.

According to TNT's experience in North America, TNT can usually take 10-15 per cent off a customer's logistics costs and increase efficiency by a large percentage when the Matrix system is adopted.

By using the system, the flow of parts from suppliers all over the world will be shown on the TNT managers' computer screens. Managers can micro-manage the supply chain in a way their customers have not had time to do before, said Mackey.

"We know where every part is, right down to a gear. If something hasn't left a supplier, we're on the phone to them," he said.

China is expected to grow into the world's third largest automotive market by 2010, following North America and Japan.

"However, the majority of companies still do most of their logistics in-house, so there is huge potential to grow," he said.

TNT insiders said China's logistics market is estimated at around US$215 billion at present, with an annual 20 per cent growth rate.

(China Daily March 12, 2005)