Given all the derision we heap on “the Hub” plan, lets give some credit to encouraging DHL in investing a further $75 million into its Asian hub operations in Incheon.
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45 Comments
The Red Barron buys a piece of the ROK, or The Nazi loving Koreans invite the Luftwaffe.
“The Nazi loving Koreans invite the Luftwaffe.”
Your pithy, racist comments always nearly make a point. They are in all cases close to being thoughtful.
Sin crock non,
If you had a modicum of intellect, you would soon find out that my comments are satirical in content, and context. If you head east you will eventually run into the Gofuckyourself Sea, bring a towel.
DHL’s investment is the exception that proves the rule of the Hub’s failure, even as a scaled-back freight depot. Even all the Korean papers have widely reported the bankruptcy of the Hub vision thing. Korea is the Terry Malloy of East Asian hubs: it could have been a contender; it’s not even a lightweight.
And just to keep things clear, The Nazi’s are not a race. Moron.
Play nice, children.
“If you head east you will eventually run into the Gofuckyourself Sea, bring a towel.”
And this comes disappointingly close to being intellectually stimulating repartee.
With your free hand give autoerotic asphyxiation a go.
I come here for the witty and always entertaining comments, which give all the proof you need as to why pot should be legalized.
i can be witty too
9-11
ha ha
LOL subtraction
good one dlatn
“And just to keep things clear, The Nazi’s are not a race. Moron.”
Actually, the Nazis would have disagreed with you (then again, they believed in all sorts of stupidity).
http://en.wikipedia.org/wiki/Aryan_race
http://en.wikipedia.org/wiki/V.....h_movement
http://en.wikipedia.org/wiki/Nazi_Mysticism
typical for this administration. Much talk but little substance.
btw, warum sprechen wir jetzt ueber die nazi partei?
ggoma,
http://en.wikipedia.org/wiki/Goldwin%27s_law
http://de.wikipedia.org/wiki/Majuskel
SomeguyinKorea, of course they would. The facts are they were a political party.
I actually wouldn’t mind a little discussion about hubs and DHL’s investment. Would it be possible to delete all this nonsense and start over again?
Sounds like China will kick Korea’s butt in logistics anyway:
http://english.chosun.com/w21d.....30004.html
Regardless, N. Korea is the main obstacle, literally, to S. Korea being a logistics hub.
Yes, and I believe I warned commenters in this thread to behave. Ignored warnings usually lead to banned commenters.
Thanks once again for your cooperation.
i wasn’t gonna say anything, but DHL seems to have a bigger market share in South Korea than the US.
I say this, because a relative of mine used to send my family some documents by express mail speed every now and then. Whenever they had a choice, they used DHL.
I think the price, reliability, and service was more satisfactory for them than EMS by the South Korean govt postal service.
So, does DHL have a bigger share there reflective of their investments or am I just off again? I just don’t remember a South Korean package from UPS or FedEx…
Ah yes, back on topic, The Hub. As we all know our neighbors have a pathological need to be seen as the hub nation of North East Asia. One problem queers this dream, China. China has a captive labor force and the non-market economy to cook the books as they see fit. Watch China with its air logistics market! An enlightened move on the part of the Chinese is to enter into a joint venture with Korean Airlines to create Grand Star Airlines.
railwaycharm, is that satire? I assume cooking the books is true, though?
If they do cook the books, some people will be crying bloody murder several years down the line…
Mr. Marmot, I can’t find your email on the blog now–it was in the “about me” part before, no?
Anyway, this might interest some folks: Asian-American actors making it big in Asia, a few Koreans mentioned.
http://www.nytimes.com/2007/02.....11ito.html
Global logistics is what spreadsheet jockeys call an Optimization problem. The spreadsheet takes weeks to create, inputting all the variables for possible routes, fuel costs, berthing costs, cost of ‘time’, costs of secondary service providers, future growth expectations… . But the result takes only a millisecond to calculate: Hit ‘Enter’. Lowest cost option wins. Naturally, the lack of a rail link to Korea makes many of those costs higher relative to Chinese ports of entry.
For Korea to be a competitive logistics hub would literally require moving mountains. The potential for a financial hub is theoretically much brighter, all it takes is deregulation. Allow foreign law firms to open here, allow financial firms to hire foreign analysts, flush Korean accounting rules and insitutute international disclosure standards… Anyone ever look around Yeouido’s crowded sidewalks at lunchtime on a weekday? Korea’s financial district is the most foreigner-free area in all of Seoul, I’m sure. Homogeneity and Hub are incompatible concepts.
railwaycharm, is that satire? I assume cooking the books is true, though?
If they do cook the books, some people will be crying bloody murder several years down the line…
No satire on this post. China is notorious for funding their State Owned Enterprises by siphoning monies from pubic holdings. Profits be damned.
Marmot, don’t ban me. I am right in the head. I’m shaking it boss…… Please don’t ask me to eat all those boiled eggs……
Linkd, that’s what I said above, no land access to China and Russia because of N.K.=no hub.
You have an interesting site there by the way.
Another problem is freight rates are globally low. This plays into the hands of China as they can make profits from low margin operations. Korea with her heavy-handed unions can not compete.
Gracias, Michael.
I was indeed redundant. I hadn’t read #18 when I wrote #24.
then, … Why is DHL investing more in South Korea? Is it just to strengthen the profitable business in South Korea ?
Well, you explained it more fully than I did Linkd
There’s a whole range of areas that need reform here.
wjk,
In my experience, DHL is better price and service wise than its American alternatives. I’ve been burnt far too many times by American couriers with surcharges that were as greater than the quoted shipping cost to use anything but DHL or Korea Post’s EMS service.
My guess is that it’s due to their different business models. The Times article says DHL ‘operates storage facilities’, so they probably have an advanced tech-based system to manage huge high-turnover warehouses more efficiently than local companies, and they supply services to other logistics companies using their warehouses. FedEx on the other hand is closer to the consumer, through partnership with Kinko’s branches. So DHL can subidize its market entry using warehousing profits, and FedEx using multi-store printing profits. Time will tell who chose the better strategy in Korea.
Interesting thoughts. Fed-Ex left Asiana at the alter last year by not purchasing Asiana Town at Gimpo. Perhaps they saw the wood for the trees?
Good to see this thing come back around, ja wol?
Linkd> I can agree with you, but think its important to add every company is a bit diffrent. The “spreadsheet” is certiantly a factor, yet even within that every company places diffrent weights on things. And on top of that there are other conisderations, otherwise Kazakstan would be prime “Hub” territory.
ALso you have to think of the organizational history. FedEx was burned pretty bad when they took over Clark in the PI. The story must haunt strategic planning at FedEx every time “Asia” is mentioned.
I think what is really going to make or break Incheon is if the market develops to such a point where more hubs, or specicaly smaller hubs, are needed. Incheon can play better in this space since it would likely be a “major” for one and a “minor” for another. The problem here though is one of regulation and/or nationalism. Can you see say Korean Air Cargo operating a hub out of the new airport in Bangkok for SE Asia (ok perhaps bad example given now)? Or alternatively can you see the Korean govrenment allowing Singapore Air Cargo to run a region hub in Incheon including domestic operations?
Operations not so linked to countires have more flexiblity, but there are only so many of them.
Interesting points, Linkd, railwaycharm and others. Isn’t Korea somewhat on the way to seriously improving their financial markets, though? There has been alot of consolidation in the industry in recent times. Mind you, it’s still probably far behind Hong Kong, Singapore, Tokyo and others (Shanghai?). Could Korea actually become a hub of anything?
What makes Kazakhstan so great? 15 million people, and a population dropping fast because anyone with the brains or means to escape is doing so? It takes more than geography to be a hub. Winnipeg is not the hub of Canada, Kansas city not the hub of America. Australia? Hm. Is there anything in the center? Hubs need one or more of: access to customers, access to suppliers, access to talent, access to complementary businesses, favorable regulatory environment, and, uh, a certain amount of general momentum. Of course Korea could do it. Just about anyone could. Singapore’s Lee Kuan Yew wrote two books about how to do it. Guarantee business an open labor and financial market where foreigners and locals are treated equally, support it with an irreproachable civil service and legal regime, and force a high personal savings rate on the population (which serves to underwrite their quality of life, public services, home ownership, etc.). Of course, I wouldn’t want to live there again. Boring as hell…
Oh, and controlling the media while keeping all political opponents either in jail or in court probably helped in some way, too.
Dram: FedEx took over Subic and lost an MD-11 hull off the end of the short runway into the drink for their troubles. Plus, Subic never got off the ground. Brown is putting a hub in at Clark, which makes a lot more sense.
Snow: “Could Korea actually become a hub of anything?”
Someone, not me, once mentioned it was already the hub of global prostitution.
It’s the hub of hubs.
Hub a huba?
Wedge> Thanks, for the correction. As I recall regardless of crashes FedEx got burned due to corruption and back turning on the part of the transition of Ramos to Estrada.
Linkd> Lets be fair, St. Louis was the “fortress” hub of TWA for a long time. Then again look what happened to TWA. On the other hand KC is/was a HUGE rail hub largely based on its geography.
DHL has been in Asia a lot longer than either FedEx or UPS, largely because its roots were in the Flying Tigers and its once owner found Asia a lot more conducive to both his business ambitions and his chicken-hawking because of the absence of effective competition and law-enforcement, respectively.
Korea’s distinct lack of progress in making itself the hub of anything has less to do with topography (except in the case of rail and road transport) than other factors. One thing they got right in the hype was its position relative to the demographic center of East Asia. UPS’ US hub of hubs is located in St. Louis, of all places, because it is the demographic center of the States. But in East Asia, UPS, e.g., operates its hubs from Taipei, Hong Kong and Singapore - each targeting a slightly different service area, not only for obvious political reasons, but because of the relative freedom each affords it to operate on its own terms rather than those dictated by the local govt, and/or the local
leeches“partners” that govts in places like Korea and Japan effectively foist on foreign entrants to the domestic market - even just the domestic location as a platform for int’l, as opposed to local, commerce. (UPS has a lot of institutional experience with these sorts of issues from its long history of having had to obtain both interstate and intrastate operating rights back in the days when the US trucking business was much more highly regulated than it is now).that’s a great comment, Sperwer.
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