Compass Smart logistics to grow your business ISSUE succeed. Overcome challenges and grow your business with close collaboration

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1 Compass Smart logistics to grow your business ISSUE 2016 MCI (P) 154/08/ Simplifying the Import Supply Chain 7 Doing Business with the U.S. is Now Easier 12 Asia Industrial Sector Buying Challenges The closer we work together succeed the more you Overcome challenges and grow your business with close collaboration Subscribe to UPS . Get the next copy of Compass straight to your in-box and keep up with all the latest promotions, news and announcements. To select your preferences, go to ups.com/sg and follow the instructions to subscribe. Of course, you ll have the option to opt out whenever you want. Follow UPS_Asia MCI (P) 154/08/2016

2 2 UPS Compass Issue 2016 Hi there and a big welcome to your latest edition of Compass. Smaller world Bigger potential Whether you re building up your sales volume in the U.S., improving your supply chain across Asia Pacific or connecting with new customers in Europe we ve lots to share with you. Like exploring how the pace of change is driving new solutions, to new shipping challenges for many small to medium-sized businesses. We ll show you how fully integrated services make total sense for importers and why optimised technology tools are the new must-haves. UPS has recently been investing heavily in creating customised support for fast-growing specialist sectors from hightech industrial manufacturing and automotive to retail. And it s this kind of change that drives and excites us to help you connect with more customers around the world. The Editors - Customer Communications, UPS Asia Pacific Region UPS Worldwide Express is now available across 117 countries worldwide, bringing a higher level of service to more of your customers. Small businesses are now thinking big. And with UPS Worldwide Express, so are we. In fact we ve now expanded our midday delivery service to 117 countries. Which means higher standards of fast, reliable and time-sensitive deliveries to more countries than ever before. And that means more business potential for you. Opening up more of the world s business to you. As one of the world s largest carriers, we serve a great number of small to mediumsized businesses, and we understand what small businesses need to help them succeed. Five features that we bring to our customers: Liberating time and resources - Knowing when a shipment will arrive enables a business to plan its time and resources efficiently. UPS Worldwide Express provides the certainty of time- and day-definite delivery. Helping businesses connect with more customers by midday - being able to deliver shipments to more customers across 117 countries by midday helps a business grow - by gaining greater customer trust. Making shipping quick and easy - When a small business has the support of the world s largest transportation network, logistics needs can be met with ease. With key hubs in the Asia Pacific, Europe and the U.S. region - UPS can help deliver your shipments quickly and smoothly. Providing a choice between speed and economy - We provide businesses with three guaranteed time-of-day delivery options: UPS Worldwide Express Plus - for early morning delivery to 27 countries UPS Worldwide Express - for midday delivery to 117 countries UPS Worldwide Express Saver - for end-of-day delivery to 220 countries and territories Guaranteed service you can rely on - With UPS Worldwide Express there are no ifs, buts or maybes. If it needs to be there it will be there. That s what keeps customers happy and businesses busy. Opportunities for freight customers just got bigger With the expansion of UPS Worldwide Express Freight services to new countries, our customers who ship palletised shipments over 70Kg can now benefit from service quality across 66 origin and 64 destination countries. This means time-definite door-todoor delivery, guaranteed, supported by all the latest technology and logistics expertise. Learn more at: ups.com/worldwideexpressfreight i WELCOME TO A WORLD OF POTENTIAL. To find out how you can reach more customers with better service, visit ups.com/shipinternational/sg

3 UPS Compass Issue Improved services for businesses across Asia Pacific. Asia Pacific enhancement and expansion CHINA 23 cities with improved transit times for export shipments by up to 2 days Extended pickup times by up to 4 hours PHILIPPINES Expansion to over 60 new postal areas in 3 provinces with improved transit times for export shipments by 1 day Extended pickup times by up to 2 hours SOUTH KOREA 13 cities with improved transit times by up to 1 day Extended pickup times by up to 5 hours INDONESIA Expansion to over 60 new postal areas in 5 cities and 1 regency with improved transit times for export shipments by up to 1 day UPS's recent expansion is great news for businesses that are looking to expand their products and services, and provide an enhanced customer experience. It will also benefit businesses that are seeking to optimise their operations to be more competitive. From pickup to delivery - advantages for you Geographical expansion of UPS's delivery services means that you can gain access to more destinations across the Asia Pacific to boost your business growth. Improvements in delivery times offer a competitive advantage to businesses who look to encourage repeat purchase by improving customer satisfaction. Faster delivery is also important for importers whose business continuity relies on timecritical supplies. With extended pickup times, there is less pressure on resources and time allocated for shipping preparation can be planned around other activities. More shipments can be processed and dispatched in one day, which speeds up fulfillment of orders. The improvements have been made possible by combining the reach and experience of the UPS global network with carefully selected logistics partners. All import and export services, performed by our representatives adhere to our operations standards and procedures. For you, this means that you can better manage your customers expectations by offering more options and greater service quality. TAIWAN 16 townships in Changhua with same day export service Improved transit times by up to 1 day More flexible pickup times Faster delivery times More flexible pickup times Greater coverage across regions i FOR MORE INFORMATION ABOUT HOW OUR SERVICE IMPROVEMENTS CAN HELP YOUR BUSINESS, please contact

4 4 UPS Compass Issue 2016 When you think supply chain, think today. In the past, it seemed that only huge corporations had the scale and scope to go global. Today, this has changed and we re seeing more and more small businesses becoming successful global traders too. The Chinese-led consumer boom and the rise of Asia Pacific s middle income group has fuelled strong import growth in the Asia Pacific. In fact, China has already succeeded the U.S. to become the world's largest automotive market*, and there is good reason to believe that these powerful consumer trends will continue. We live in exciting times and growth can come rapidly to many smaller companies. Yet what s vitally important here is how to manage that growth and to make sure the supply chain can flex, adapt and gear up quickly to meet new demands. For smaller importer businesses, that can be challenging. For one thing, managing an efficient and sophisticated logistics operation sounds complicated and time consuming. Common challenges faced include language and cultural misunderstandings when dealing with foreign suppliers, or a lack of knowledge about the regulations that exist in different countries. Smaller businesses suffer financial constraints too, where the costs of creating a new logistics warehousing and technology infrastructure just wouldn t be affordable. What these smaller dynamic importers need is a capable, reliable logistics partner. One that can help them plan for growth and create an integrated logistics system that efficiently copes with growth when it comes. At UPS we understand the dilemma of small businesses that want to grow, but are hesitant to take the giant leap. And that s why we see ourselves as a bridge to growth for many of these smaller global importers. Your bridge to growth Whether you re importing finished goods into Asia Pacific or raw materials for manufacturing products that sell globally, UPS has the reach and capability to meet your needs. Here are some ways we can help: 1. Warehousing isn t a problem - we already have storage facilities in 360 locations across more than 20 countries in the Asia Pacific region 2. We make sure you ve got total visibility across your entire supply chain 3. Improved supplier management with accurate inventory tracking to help manage and control the growing complexity of shipping 4. UPS expertise across different time zones and different languages to help you communicate accurately with suppliers 5. Up to date cross-border knowledge on customs compliance and trade regulations 6. Connectivity in 220 countries and territories worldwide 7. A range of services to give you the optimum time and cost options 8. Consolidating shipments efficiently to reduce costs, ship faster and clear customs quicker 9. Quicker, more sustainable paperless deliveries 10. A one-stop source for all your logistics requirements 11. Efficient and effective control over your logistics operation *Source: i IF YOU VE GOT A QUESTION ABOUT YOUR IMPORTS: visit ups.com/imports/sg

5 UPS Compass Issue But also think tomorrow. Having a logistics partner that s already geared up for your future growth is a good move. It can make the whole process of upgrading your supply chain much smoother. So give it some thought. We re here to meet your needs regardless of the size of your business. We believe in working closely with you to help improve your business At UPS we re always discussing new ways to improve on what we do. In fact, some of the most productive chats we have are with our customers. Our conversations often result in new ideas and ways in which UPS solve their problems. We listen carefully and many of these insights end up shaping our new services and new ways of doing things for you. Keeping close to your needs is important to us, so we do a lot of listening and we are also commited to helping advise you where we can. At the same time, we guide you through the process of meeting your logistics needs. Three things about logistics you need to know, to help you grow. We re constantly being asked how we can help smaller businesses be more efficient when it comes to logistics. And we love that, because it prompts us to push harder and be better for you. Keep the questions coming. 1. How can I ensure the value of my goods remain confidential to shipper or third party receivers? With UPS Commercial Invoice Removal, we ll separate the invoice from the shipment immediately after customs clearance that way confidential price-sensitive information isn t seen by customers. When making shipments with UPS Import Control, simply select the Commercial Invoice Removal (CIR) option and we ll remove the invoice. 2. How can UPS help us to improve cost efficiency and productivity? There are many ways we can help reduce costs and raise productivity and efficiency. One way is through expert consolidation to ensure your shipments gain customs clearance as one unit instead of individual shipments. This simplifies and shortens your supply chain, avoids the need for warehousing and speeds your delivery time to market. It also avoids multiple shipment costs and storage charges. 3. How can UPS help us to stay ahead of competition and venture into new markets? As the world changes and demands shift for raw materials and finished goods alike, you need a partner like UPS that knows how to make those moves swiftly, efficiently. Delivering advanced, highly efficient logistics solutions for importers combined with over 80 years of experience in cross-border regulations and customs compliance means you re working with a team that already has the knowledge and capabilities in the new markets you want to break into.

6 6 UPS Compass Issue 2016 You have enough challenges to face in business WHAT IF CROSS BORDER SHIPPING WASN T ONE OF THEM? Sending shipments across international borders has its challenges, especially for smaller businesses. Whether you re an importer or an exporter, you might feel unfamiliar with the differing customs regulations that are out there. You could also be unsure about tariff codes and how to meet your customs compliance needs - and be worried over the risk of fines, penalties and shipment delays. As for making sense of those baffling customs forms, let s not go there. But with the right knowledge and expertise on your side, the whole process of cross border shipping could be much simpler and more hassle-free. Achieving customs compliance and hasslefree shipments for you Customers today are constantly seeking out the best deals, the best products and the best levels of service. They need things done fast. High standards are the new standard. Everyone has to up their game. Any small increment helps them gain an edge over the competition. Like having the right systems in place to begin customs clearance earlier whilst your shipments are still in transit that way, you re already fast-tracking your documentation before your shipments have even arrived. The benefit of having one point of contact Having a single point of contact can explain de minimis or the Trans- Pacific Partnership (TPP) in a way that helps you take advantage of them. Having that kind of service would help free you up from the hassle and complexity surrounding international shipments and also help streamline your growing business. In the face of customer demands and complex cross-border business, you require a global partner with strong customs knowledge and expertise to rely on. Raising standards, removing barriers, Inbound, Outbound, No bounds As the largest customs broker in the world, UPS deals with issues at border crossings, while you focus on growing your business. We want to use our customs knowledge, skills and experience to navigate you through any obstacles you might face when entering new markets. This way, you get to tap into one integrated system, one single source team with over 80 years of expertise in customs brokerage. Whether it s maintaining compliance across a range of customs regulations or offering clear guidance over complex trade agreements, you ll find we smooth the way and remove the complication and challenges cross border trading can bring. Bruce Kidwell Vice President, Customs Brokerage, UPS Asia Pacific Region. i TO FIND OUT MORE ABOUT UPS BROKERAGE SOLUTIONS VISIT ups.com/brokerage/sg

7 UPS Compass Issue A higher de minimis in the U.S. means one thing: Greater potential for you For smaller value shippers, doing business with the U.S. is now easier and more affordable than ever. The de minimis is the minimum dollar value of qualifying* goods below which no formal customs procedures are required and no duties or taxes are collected. The U.S. increased the de minimis threshold to US$800. For smaller to medium-sized businesses shipping lower value items, it makes trading with the U.S. easier, more affordable and potentially, more profitable too. A higher de minimis could benefit your business by: Lowering end costs to U.S. customers Making access easier to the U.S. market Accelerating customs procedures Lowering compliance costs Speeding up shipment deliveries Reducing documentation Improving customer satisfaction Shaping your business strategy $ Cost savings - more goods exempt from U.S. duties and taxes Customer satisfaction - shipments that arrive on time E-commerce - more responsive Shipments - no need to consolidate low value shipments Production cycles - greater access to goods and fewer delays Team up with a strong network with unparalleled local market intelligence By partnering with UPS you ll have the global reach that makes it easier to navigate the new U.S. de minimis regulations. You ll have access to our vast U.S. network, but even more valuable, you ll benefit from our deep understanding of the domestic U.S. consumer market. * Some U.S. government agencies may require formal customs entries on all goods, regardless of value. More than 900 daily domestic flights within the U.S. More than 24,000 UPS Access Point locations 80 The recently increased U.S. de minimis value will have a positive and influential effect in the marketplace so make sure to leverage its benefits into your future business strategy. Supply chain - faster cash flow and inventory turns 4,400+ UPS store locations across the U.S. 80+ years of brokerage experience i TO FIND OUT MORE ABOUT THE NEW U.S. DE MINIMIS, speak to your UPS representative today or simply call us on

8 8 UPS Compass Issue 2016 Solving unique challenges for unique customers The closer we work together the more you succeed. ups united problem solvers Adonit UPS believes that smart people working together can solve any problem. And it s this close collaboration and focus that enables us to create specialist solutions for specialist sectors. Ours is a uniquely human logistics network that transforms lives and industries through teamwork and the relentless application of innovation and ingenuity. At UPS we re here to help businesses like yours connect with your global markets, to import and export with ease and to make those innovative leaps that enable your business to achieve more. There s an art to keeping ahead in the fast-paced world of the stylus industry. Adonit s secret is to team up with UPS using our scale and flexibility to get their product to market fast, efficiently and ahead of their competitors. Adonit designs, manufactures and sells jot styluses and innovative tools across the U.S., Europe and Asia. Faced with growing shipment numbers and a lack of awareness of the many regulations across multiple markets, they turned to UPS. When interest in the company started to intensify, we had to tackle the demand surge from stakeholders and consumers, and still get samples and new products to markets in time for a launch, said Louis Chen, Global Sales Director of Adonit. So Adonit teamed up with UPS. This immediately gave them access to UPS s range of innovative tools including UPS WorldShip which went on to streamline Adonit s outbound order process saving over 67 hours every month. Results included: A three-fold increase in productivity for Adonit s logistics operations Expedited orders brought a 75% reduction in order processing time 30% reduction in time spent tracking shipments Combined annual savings of 940 working hours Having started out in 2010 off a crowdfunding platform, Adonit now operates from three offices and four warehouses across five continents.

9 UPS Compass Issue CSTOWN EZshopnet VPP CSTOWN Co. Ltd. is a specialist accessory manufacturer that exports a range of shirt accessories to Europe and the U.S. Its vision is to become the industry smallscale specialist within three to five years. Being in the ever-changing retail sector, CSTOWN s main challenge is its short production cycle and incredibly tight production turnarounds. They need efficient logistics that is responsive, accurate and flexible and offer multiple choices too. When UPS was asked to help, we responded by customising our Retail solution around CSTOWN s unique needs. Combining Shipping API and UPS My Choice helped them to respond to key market changes and shifts in customer needs. At the same time we integrated UPS technology into CSTOWN s business systems to help them handle shipping with greater ease and efficiency. After teaming up with UPS, CSTOWN s logistics efficiency improved by 11%. This collaboration between CSTOWN and UPS continues to be strong and focused on their needs. EZshopnet is in the business of selling football jerseys. They provide an e-commerce platform for all the major European football teams for their Asia Pacific markets so they need to be able to react as quickly as a top striker can turn on a ball. Football is a fast-moving game, so orders for jerseys depend on how the team is performing moment by moment. If a team does well there s going to be a rapid demand for jerseys and EZshopnet has got to be ready to respond to the orders coming in. This is where UPS s global logistics expertise and reach really helps. Working closely with EZshopnet, the UPS team helped them to manage spikes in rapidly-changing demand and lower costs by maintaining a lean inventory and using tracking and billing solutions. These orders come in from 10 different clubs and 20 separate websites every single day so EZshopnet now makes full use of UPS s full range of shipping tools from UPS WorldShip and UPS Quantum View all the way through to Paperless Invoice and e-billing. Now EZshopnet is able to respond to customers orders rapidly, efficiently and reliably with a precisely tailored logistics solution designed around the fast-moving world of football jerseys. Video Plus Print (VPP) is a fast-growing, highly successful business that needs to respond to the fast-changing demands of global marketing campaigns. VPP creates customised video products utilising the latest digital audio-visual technology - merging the areas of digital media with print to create a range of innovative magazines and media kits in essence, VPP creates multi-sensory experiences for a truly global market. VPP s logistics challenge involves handling over 3,000 time-critical international shipments per year which is where UPS comes in. Working closely with VPP, we ve created a powerful logistics package that helps them coordinate their shipments and maximise their working efficiency by: Integrating UPS WorldShip with VPP s shipping system simplifies orders and streamlines processes, saving 867 manhours yearly UPS shipping labels are barcoded with data imported directly from VPP s system to speed up processing time Enabling complete shipment visibility with UPS Quantum View saving 2,000 manhours yearly Clearing customs ahead of time with electronic commercial invoice data with UPS Paperless Invoice, saving 650 manhours yearly It s an example of great teamwork between VPP and UPS and it s one that had a positive impact on their growth. i FOR MORE LOGISTICS TIPS AND SOLUTIONS FOR YOUR BUSINESS, VISIT solvers.ups.com

10 10 UPS Compass Issue 2016 TO GROW SALES VOLUME The world s largest market is a good place to start. REACH OUT TO EUROPE Now is the time to reach out to Europe. Connecting with 500 million consumers* looking to buy quality goods is a great way to grow. The EU is the world s largest trading block, contributing to 16% of total world trade**. It is the marketplace to connect with more businesses and more consumers than anywhere else on earth. As you might rush to capitalise on the opportunity that the European market offers, it s important to step back for a moment and remember that your brand experience will only be as successful as your execution. The key to engaging successfully with local audiences is to understand the challenges you might face. Consumers in Europe are savvy, as are European businesses and they shop around for the best quality goods and the highest levels of service. One of the most important challenges is to establish the right logistical expectations. If these details are not implemented properly, your entire brand experience could be at risk. UPS has been serving customers in Europe for 40 years, offering a wide choice of package, contract logistics, brokerage and freight services for both import and export. What s more, in 2015 UPS announced that US$2 billion will be invested in Europe to further optimise our logistics network and improve transit times. Today UPS connects you to every address in Europe Shippers who are based in the Asia Pacific region can offer their customers the benefit of guaranteed midday delivery which has recently expanded to 31,000 new postal codes in Europe. Partnering with UPS brings: Guaranteed time definite solutions enable speed to market inventory Improve cost efficiency with faster delivery to markets Support in growing your business and expanding your business reach Life has become easier for Europeans who purchase goods online, which makes them feel great about buying more When you give customers more options with how, when and where they receive their deliveries, they are likely to buy more from you. UPS Access Point and UPS My Choice across Europe offer just that. These services give your customers more convenient ways to receive and return their orders. UPS has partnered with thousands of local businesses to create the UPS Access Point network that offers easy drop-off and pick-up for busy customers. It s been a great success and more locations are being added all the time. UPS My Choice is a clever, yet simple to use app that gives customers the freedom to manage their deliveries in ways that suit their busy lives. Sources: * European Commission Trade data (ec.europa.eu/trade/policy/eu-position-in-world-trade/index_en.htm) ** UPS 2015 HK Export Census Data. i TO FIND OUT MORE ABOUT UPS SOLUTIONS, speak to your UPS representative today or simply call us on

11 UPS Compass Issue Could this be your green light for growth? No matter how big or small your business is, one thing is certain. Growth can take place at any time and it s sometimes hard to predict when it will happen. The important thing is to be prepared to capitalise on it. GOING FOR GROWTH Maximising business potential is not just about having a vision. It s about seeing the whole picture. Inevitably, with any rapid growth like this in the future your supply chains would become more complex than before so the need to view and respond to detailed shipment information would become even more critical. For a fast-growing business, gearing up for such growth in the future could be very challenging. However, it is a lot easier when you have the right tools at your fingertips. One of a highly effective range of visibility tools designed to give you clarity across four major areas of your freight activity transportation, customs brokerage, supplier management and warehousing and fulfilment is already here for you when your vision for your business becomes reality. You can be certain that whenever you are ready to start using the system, its performance will always be optimised and current. As your business grows and your logistics challenges become more demanding seeing big things in great detail could become a powerful asset. UPS Flex Global View is an advanced online system that gives you a clear 360 degree view of your entire supply chain. As technology is evolving, we constantly invest in improving the system to offer a better user experience. The features include: a variety of reporting formats that suit your needs, clear status updates and easy to use filtering functionality for customs entry data. i TO DISCOVER MORE ABOUT UPS FLEX GLOBAL VIEW, VISIT ups.com/flexglobalview Making shipping more efficient, more accurate, more economical As a business develops and evolves, shouldn t its shipping processes do the same? If a key part of your business involves shipping and you want to maximise efficiency, then automating your shipment process makes total sense. The advantages of automation are clear. No manual labour costs, no costs through human error and no costs associated with training new staff on shipping preparation. For dynamic businesses that care about customer satisfaction, it s vitally important that shipments go out quickly, efficiently and without error. That s where the precision and automated accuracy of UPS WorldShip 2016 software comes in. By enabling you to send out the shipping documentation earlier than the shipment itself it speeds up the customs clearance and reduces delays. And, because it s fully automated, it helps keep everything simple and hassle-free for busy business users who can concentrate on what they do best running a great business and keeping customers happy. If your shipping activity is important, but a relatively small part of your business operations, there are other solutions that are designed just for you. There is UPS Internet Shipping which enables you to coordinate your basic shipping needs from one single point. And there s UPS CampusShip, a secure web-based that enables employees spread across multiple locations to centralise shipping of packages and freight, and gain visibility into their transactions. It s all about making shipments easier and more efficient for your business to manage. Whatever stage of the business journey you re on. UPS Worldship 2016 enables you to: Upload your customs documentation Set up shipment alerts Track shipments 24/7 Export your shipment data Analyse data i TO FIND OUT MORE ABOUT AUTOMATING YOUR SHIPPING PROCESS, VISIT ups.com/worldship

12 WE WANT TO HEAR FROM YOU! Share your thoughts with us at Customer Demands Expectations not met Necessary to create a superior customer service experience to drive loyalty Challenges when working with distributors Direct Purchasing Easier than ever 43% Lack of post-sales support 36% 42% Lack of knowledgeable support The push and pull of direct selling/buying intensified Poor customer service for resolving issues Top methods used to select a new distributor... 48% Company 48% 47% 47% Distributor Trade Internet sales rep website shows 45% Print hard copy catalogue 45% 55% do not purchase direct from manufacturer currently purchase direct from manufacturer 77% are likely to start 94% are likely to increase direct purchasing E-commerce Superior crosschannel experience Distribution process Increased expectations Opportunity to attract customers by enhancing distributor s online websites 86% 51% Purchasers who buy via distributor website Customers demand faster and more efficient delivery $ are likely to shift spend to distributor with user-friendly website 87% are likely to increase purchases made online or via mobile Those who don t purchase online find that: $ 46%... it s too difficult to identify 30% spend product details more than half their budget there 41%... it s too difficult to get answers to product or order related questions 78% say it s important to offer single carrier shipping but only 21% of their current distributors offer it Factors considered when choosing a distributor Speed of delivery 50% China Range of shipping modes 45% Japan 29% 31% Korea 12% 17% Tip: In China, where the country is vast, efficient shipping options are important to customers. Asia industrial sector buying challenges UPS collaborated with research firm TNS Global to study the purchasing behaviour of over 600 industrial product buyers in China, Japan and South Korea. The findings above offer distributors a glimpse into their position in the marketplace and highlight potential areas for improvement and growth. Copyright 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color/colour brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Reproduction in whole or in part is prohibited without written permission. Persons or publications quoted and the comments of guest contributors do not necessarily represent the corporate opinion of UPS.