News / Cosco expands warehouse footprint to tap into growing ecommerce

Cosco Shipping Lines is expanding its warehousing footprint to tap into e-commerce growth and respond to the supply chain challenges of the US tariffs on imports.

Last Thursday, the China state-controlled liner operator opened a warehouse in Panama, to stock Xiaomi products, and in Indonesia, to cater for its exporters.

The Xiaomi warehouse is in the Panapark free-trade zone, close to Panama International Airport, and will function as a distribution centre for Central and South American markets, mainly responsible for the storage, sorting, packaging, labelling and air freight of mobile phone products.

Xiaomi is a significant player in the Central and South American smartphone market, its shipments increasing significantly in recent years, particularly in emerging markets like Peru, Colombia, and Brazil.

Coincidentally, South America is a region courted by China amid its growing trade tension with the US. Cosco particularly is a major investor and operator of Peru’s Chancay port and recently also launched shipping routes to Ecuador.

Last month, Cosco and Indonesian 3PL PT Global Putra formed a joint-venture to build a logistics centre and container depot in Jakarta, to tap into Indonesia’s growing exports.

They said the facility would target Chinese enterprises and multinational customers that invest in Indonesia, helping them reduce logistics costs and shorten delivery times.

Shortsea shipping within Indonesia can be costlier than shipping to and from the country, due to the many islands that form the nation. The US reduced tariffs on its imports from Indonesia to 19%, lower than those from Bangladesh and Vietnam, which augurs well for exports from South-east Asia’s largest economy.

These facilities add to a recently opened warehouse in Shanghai to stock goods for Chinese e-commerce retailers, which Cosco management said would form a warehousing cluster of more than 100,000 sq metres, including a facility in Yiwu, home to China’s largest wholesale market.

A Cosco source told The Loadstar: “As Chinese e-commerce retailers are selling more merchandise to customers worldwide, these warehouses will facilitate the delivery of goods and improve the logistics flow in the Yangtze River Delta.”