Slow initial take-up, but urban logistics will be rolled out to 12 more malls

SINGAPORE - Urban logistics, a new model of goods delivery in malls where retailers make use of shared resources and streamlined processes, will be extended to twelve malls in the western part of Singapore next year, despite the slow take-up in two malls in the east where it has been trialled since June.

Led by the Info-communications Media Development Authority (IMDA) along with enterprise development agency Spring Singapore and landlord CapitaLand, the urban logistics project aims to boost delivery and logistics processing through centralized in-mall distribution, dock scheduling and queue-management solutions that reduce waiting and queuing time for deliveries by about two-thirds. It also helps reduce traffic congestion and queuing of delivery vehicles outside the malls, with the potential to cut delivery manpower by 40 per cent.

However, retailers have showed little enthusiasm as they see no immediate benefits from changing their existing logistics arrangements. At Tampines Mall and Bedok Mall, the two shopping centres where the IMDA Urban Logistics initiative has been rolled out, only about 30 per cent of the tenants have signed up.

“At this juncture, we don’t see much gain accruing out of this initiative to our business. We will anyway have to retain our existing logistics arrangements. The new process is about efficient delivery within the mall only… Also, the nature of our business is such that it does not involve bulky goods, hence it is of little value to us,” said Mr Stanley Chan, GM at Capitol Optical.

A spokesperson for consumer electronics and furniture retailer Courts, which is participating in the trial in Tampines Mall, said: “It is still early days to be able to make a meaningful assessment of the impact.”

To attract more participants, Spring Singapore is subsidizing the logistics bills of retailers who have agreed to sign up for the initiative by 70 per cent for about a year.

“Retailers are mostly looking at cost savings. Convincing them is the most challenging part as they don’t see an immediate benefit yet. But over time, as more retailers sign up, the benefits will start flowing in,” said Mr Mustafa Bin Abdul Rahim, GM at CapitaLand’s Tampines Mall and Bedok Mall.

According to IMDA, the initiative could potentially benefit about 300 retailers besides enabling logistics service providers (LSPs) to make better use of their delivery fleets and manpower. The LSPs can tap into the S$20 million fund allocated for the transformation of domestic logistics industry.

“Urban logistics is a big challenge but we have started well since June. To get tenants to move from the existing system to the new system, there must be some compelling reason. Obviously, it is about time saving, productivity gain and reduction in manpower… Our target is to get 100 per cent retailers on board,” Minister for Communications and Information Yaacob Ibrahim said at an event organized by IMDA at the Tampines Mall on Monday (Nov 28).

“We saw that we could manage 70 per cent time saving with only 30 per cent of tenants on board. With more tenants we can make the process even more efficient with technology deployed not only within malls but also outside in the goods and vehicles,” he added. Through the new system, NTUC FairPrice said it has seen significant savings in delivery time by up to 65 per cent and enhanced manpower efficiency during the goods unloading process.

“We continue to assess the system closely to enhance FairPrice’s processes, as we strive to maximise manpower and productivity,” Ms Toh Hui Leng, Senior Director (Supply Chain) at NTUC FairPrice said.

The In-Mall Distribution model, according to IMDA, also enables malls to have extended hours of delivery/acceptance operations, and foster greater automation, professionalism and security of such services. It will be rolled out at four CapitaLand malls next year including IMM Building, JCube, Westgate and Bukit Panjang Plaza, besides eight other malls. IMDA did not disclose what these eight malls are, saying it is currently finalising talks with operators.