The Star - GD Express Emerges Stronger from Slowdown
Jul 09, 2001
( Darshini M. Nathan )
LOCAL courier firm GD Express Sdn Bhd (GDex) has emerged stronger following the economic slowdown of 1997-98 and is now well positioned to deliver professional services on par with those offered by international industry giants.
The idea of starting GDex took root in 1996 when its operations director Yong Phie Loong saw the huge potential of establishing a domestic express delivery outfit. Yong, who is considered a pioneer in the local industry because of his experience as chief general manager of Nationwide Express, saw the potential for another express delivery service.
"In the mid-90s, the industry was growing at an average rate of 20% annually," he said, adding that the new company thus had planned to ride on the strong growth momentum.
Yong told Star Business that at the time, there were three prominent domestic competitors - Pos Malaysia, Nationwide and Citylink - apart from the international giants like Federal Express, UPS, DHL and TNT.
With RM3mil as initial paid-up capital, and the vision of providing the next prominent domestic courier service in the country, GDex started it operations in March 1997. The company, however, did not bargain for being caught in the midst of a regional financial crisis.
Despite rationalization exercises aimed at cutting costs, such as reducing its service stations and establishing agent agreements with several stations, GDex still found itself floundering in deep waters. Realising that a major reshuffle would be necessary for GDex to stay afloat, Yong approached Teong Teck Lean, who is now GDex managing director, to help turn the business around.
"The first thing I noticed when I took control was the fact that GDex was run more like a transportation company, rather than a courier service," said Teong, who entered the business with no prior experience in the industry. After some careful research, Teong established the difference between local and international courier companies in terms of the way each ran its business.
"I found international companies were more systematic in the way they managed their service," said the former institutional dealer at the leading stock broking firm. According to Teong, those companies also emphasized the use of advanced tracking systems to monitor the flow of the parcels or documents, form pick-up to delivery.
"In the courier business, time is the essence," he said, adding that customers' expectations were also becoming more exacting as they were "demanding" delivery up to the nearest hour, instead of the nearest day."
Thus, early last year, Teong introduced a restructuring exercise that saw the introduction of a new management team and philosophy, and the results are already starting to show. Seeing the need to be accountable for every item that passed through their hands, additional capital was spent on installing a tracking and security surveillance system at GDex's customised hub in Petaling Jaya.
"To date, the company has injected capital of about RM200,000 was spent on the security system," Teong said. According to him, GDex now has "a security system which is comparable to that of international courier companies" and has managed to reduce pilfering, previously a common occurrence within the company, by almost 90%. The tracking system, Teong said, was currently implemented only within the Klang Valley, but would be introduced in stages throughout GDex's 64 service stations in peninsular and east Malaysia.
He said GDex's customized hub, which received consignments daily from its service stations scattered all over the country, was the largest in Malaysia.
GDex's professionalism has gained the attention of international courier companies, two of which have established a tie-up with GDex in order to widen their reach to remote locations where GDex has service stations. The most recent success was the tie-up GDex secured with Singapore's Comfort Group to handle the company's consignments bound for Malaysia. Teong said GDex would continue to focus on the domestic market, rather than dividing its attention by venturing overseas.
"We want to establish more tie-ups with international courier firms so that we can concentrate on the local market," he said, adding that there was still room for much improvement locally.
According to Teong, the company would examine the possibility of expanding vertically - in logistics-related businesses - in two years. "But we have to reach a certain service level in our core business first." GDex, he said, was well-poised to meet the explosion in demand for delivery services in the future, especially with the rise of shopping via the Internet. "We see GDex as a very important link in the supply chain management system," Teong said. He added that GDex would continue to emphasise the application of the latest technology to ensure timely delivery.