High-value goods management
Hong Kong, with its solid legal infrastructure, effective IP protection, clear tax system and speedy customs procedures, is an ideal distribution centre for high-value goods. Hong Kong­ based Hikari has maintained long-term partnerships with many international enterprises, managing the clients' supply chains while controlling cost and risk.

One of Hikari's famous clients is Life Fitness, the global leader in sales of fitness equipment such as computerised treadmills, with worldwide revenues of US$640 million in 2011. Life Fitness, a subsidiary of US-based recreational-equipment conglomerate Brunswick Corporation, serves fitness clubs, hotel chains and residential complexes around Asia-Pacific from its distribution hub in Hong Kong.

"It's great to work with a third-party logistics provider, especially at the size that we are currently in Asia Pacific," explained Gene Harper, Life Fitness's general manager, Asia Pacific. "The advantage of having Hikari is, number one, it saves us on infrastructure cost: warehousing, head counts, technology. We just outsource everything. It's a very easy process to deal with them."

Quick turnaround time
"Hikari is basically our Hong Kong warehouse," said Harper. "They inventory all our finished goods -- our strength machines and cardio machines -- and our service parts, because that's a big part of the business as well."Turnaround time on delivery orders is just a few hours. "So the second advantage is that it keeps our cost at a minimum, but at the same time we're able to react very quickly to a customer's demands." Before partnering with Hikari in 2002, Life Fitness operated its own warehouse in Hong Kong,he said, adding that the company reaped a 30 per cent cost saving in that year compared with 2001 after engaging Hikari, which has helped Life Fitness Asia Pacific's sales grow six- or sevenfold in 10 years.

Harper prefers to use Hong Kong as the company's regional distribution hub for its "ease of use," as he calls it. "You talk about the benefits of 3PLs in Hong Kong, and you compare that to other countries in Asia. We ship stuff into Hong Kong and ship it out, and each transaction takes probably less than four hours from end to end, whereas in most other countries it can take days." Even in developed Australia, due in part to distance and labour costs, it's quicker and cheaper to ship a product to Perth from Hong Kong than from Life Fitness's Melbourne hub.

"We've looked at a lot of other options. We've looked at bonded warehouses in China, but there's just too much paperwork and hidden costs. Hong Kong has a strong legal framework and port infrastructure. We feel it's the most efficient city in the world for transacting our type of business." Moreover, Mainland China is potentially the company's biggest future market. "We try to keep a very lean operating team here, and having Hikari helps take that pressure off us, from a head-count and HR point of view, as well as infrastructure, the computer systems and everything."