Manufacturing efficiency has out-grown logistics efficiency, causing a major problem for the industrial sector.

According to Simon Hsu, chairman and chief executive of E-Commerce Logistics (ECL), production processes are twice as fast as they used to be.

"Although the logistics sector has also been growing, third party e-logistics operators have not been able to close the gap between manufacturing efficiency and logistics efficiency," he said.

Mr Hsu said ECL was closing the gap through its IT system and was providing customers greater transparency and information flow.

Against such a scenario, ECL was acting as an electronic and physical bridge, linking global brands and direct marketers to customers in Asia-Pacific, Mr Hsu said.

"Our fully integrated solutions aim at resolving back-end logistics problems for merchants who want to do business in Asia-Pacific," he said, adding that ECL offered merchants anywhere in the world the complete logistics solutions for immediate access to key markets in Asia-Pacific.

He added that ECL solutions eliminated substantial investments and time delay for merchants by providing a turn-key transaction management infrastructure.

ECL provides 24-hour customer care with its warehousing, order processing, transport and logistics, seamless real time data management and technology expertise to meet the varied needs of each link in the supply chain -- from suppliers through to manufacturers, distributors, direct marketers and consumers.

Mr Hsu said that by outsourcing non-core business, a company could increase efficiency and speed by 20 per cent.

ECL has been able to reduce delivery time from five to four days, he said.

With its head office in Tsuen Wan, ECL has two logistics facilities in Hong Kong and a brand-new custom-built 200,000-square-foot facility in Taiwan, five kilometres from Chiang Kai Shek International Airport.

The company will open a 17,500-square-metre facility in Shanghai next month, with a planned Phase II expansion by another 20,000 sq metres in the near future, as demand picks up.

ECL is constructing two 100,000 sq ft warehousing facilities for multi-users, one each in Guangzhou and Tianjin, which is scheduled for completion by the end of the year.

Mr Hsu said China and Taiwan were the only two major power-houses not in the World Trade Organisation, but when the mainland entered WTO in the next 12 months, foreign company access to Chinese consumers would be much easier, and tariffs would be much lower.

He said ECL enabled customers to manufacture different components of a product, such as a mobile phone, from five to six different factories in the mainland. Parts are brought to ECL's logistics centre where they are re-packed and reassembled for distribution.

Mr Hsu stressed that time was vital, especially for certain types of hi-tech components.

"Without a good warehouse management system to ensure that first in is first out, products can become obsolete very quickly."

Mr Hsu said ECL had about 30 customers, 85 per cent of them business-to-business customers and the balance business-to-consumers.

Traditional forwarders found it difficult to move into e-logitics as all functions had to work as a whole under one IT system, providing the industry greater transparency.