Bolloré Logistics Adds Aerospace to Consumer Goods Offering

Global freight-forwarding and warehousing concern Bolloré Logistics has seen the sheer unpredictability of Covid-19’s impact on its logistics operations in the Asia-Pacific region create the full gamut of effects on its fast-moving consumer goods (FMCG) business. While some units managed to respond, others struggled with delays, and the requirement to ship goods to MRO operations in a variety of global locations sometimes saw lags Bolloré would have preferred to avoid.

At its regional headquarters in Singapore, Bolloré manages around 2,000 people and close to 250,000 square feet of warehousing at 15 Regional Distribution Centers (RDCs), often with the ability to add value through light manufacturing. Key vertical markets include aerospace, perfume and cosmetics, healthcare, fashion, and flavor and fragrances.

“In Singapore, our turnover is approximately €300 million ($340 million), which is divided 50-50 between freight-forwarding and international cargo, and logistics and warehousing activities,” Frédéric Marcerou, managing director for Singapore and Brunei, said. “From there, we dispatch goods to different countries in Asia-Pacific.”

Global shipping-line container rates have soared by a factor of six during Covid-19. “On-air freight, it’s difficult to say, but it’s in the same kind of range,” he said. “The changes in capacity levels on Singapore to Shanghai route affect pricing accordingly. Market pricing for Singapore to the U.S. has increased by a factor even greater than six.”

Most disruptions have arisen due to unpredictable border restrictions in destination markets. In some sectors, Bolloré saw volumes dropping, while in others, such as flavor and fragrances as well as healthcare, it had to ramp up capacity very quickly. New regulations also affected all those areas.

Marcerou believes that while Hong Kong can compare as a base for airlines, Singapore stands as the undisputed regional hub for MRO. However, the pandemic has blighted the outlook. “Back in November 2021, the MRO industry saw 2022 as the year of recovery,” he said. “Now, with the new variant and the fact that some airlines have parked aircraft, 2023 is seen as the more likely recovery year.”

Cyrille Roux, the company's Asia-Pacific regional aerospace director, said Bolloré Logistics enjoyed mature business in China, Korea, Japan, Australia, Singapore, and Malaysia, as well as in emerging countries like the Philippines and Indonesia. However, Covid-19 hit tier-two and tier-three airports hard.

“We faced a real test in our ability to handle fluctuating capacity and frequency,” Roux said. “The most difficult issue has been secondary airports. Airlines have reduced frequencies to major airports while canceling most of their capacity to secondary airports. This meant we had to combine air freight with a truck or train. We had to explain to Singapore-Shanghai AOG customers that while we normally deliver in one day, under the circumstances, it often took two days or more.”

Most MRO consignments in the Covid period were AOG or less critical. “For routine shipments today, if payment problems exist, lead times are at least a week,” Roux said. “We offer a 24/7 service from Singapore. During Covid, we also opened up services in Korea, Japan, and Australia, to ensure real-time customer service.”

Bolloré Logistics’ aerospace strategy is central to the business. “Despite the pandemic, we have continued to invest in the aerospace industry in Asia and are committed to supporting our clients as the sector recovers in the near future,” Marcerou said. “We are convinced that aerospace will recover within months and flourish in the years ahead. We want to be part of the aerospace story in the long term. We consider the pandemic to be a bump in the road; we are still bullish on the sector.”

Marcerou sees many companies leaving Hong Kong to move to Singapore. “Some are going to Dubai, but others are coming to Singapore—I am still very confident in Singapore as an Asian hub in the years to come,” he concluded.

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