Establishing a Bonded Warehouse in Singapore - A case study of a company's establishment of a bonded warehouse in Singapore

Abstract

With the lion share of the world’s clothing being produced in Asia there are few who are unfamiliar with the multi-decade long trend of production offshoring to Southeast asian countries. The phenomenon known as “fast-fashion”, meaning clothing produced rapidly to mass-market consumers in response to latest trends, is putting flexibility in the supply chain under the microscope and today there is a growing realization of the benefits to be physically close to main markets. A Swedish clothing company, Company X, has decided to address this issue by establishing a complementary bonded warehouse in Singapore. However, Company X lacks knowledge to execute the establishment. The purpose of this thesis is therefore to identify relevant factors to consider when establishing a bonded warehouse in Singapore. This by applying identified resources and capabilities of Company X, combined with an evaluation of the logistic business in Singapore, an assessment of warehouse related costs and the conducting of interviews with experienced professionals. The result shows that location is important. It is important in two ways. First, there is the decision of establishing the warehouse inside or outside a Free Trade Zone. Secondly, whether to locate it in proximity of the airport, seaports or in between.