By Robin Chan

SINGAPORE'S logistics sector has received a boost with the opening of NYK Logistics (Asia)'s new facility to handle container cargo.

The Japanese firm will invest $200,000 to $300,000 in the 55,000 sq ft centre in Keppel Distripark, its general manager for sales and business development William Wong said at the official opening yesterday.

The news comes as the container shipping industry faces a crisis from the global slump in demand and an excess capacity of vessels.

Mr Wong said some customers are choosing to store transit cargo for longer periods - from one month to six weeks, up from three weeks previously - as they wait for overseas orders to come in.

The firm handles containers that are not full. They have to be sorted at container freight stations like the new facility at Keppel Distripark.

NYK Logistics took over the facility from freight forwarder Asian Groupage Services, and is renting the space from PSA for three years.

It will provide cross-docking operations, including the loading and unloading of cargo, sorting of cargo and short-term storage for container shipping companies, Mr Wong said.

The new centre will add to the operations NYK already has in Singapore, including its regional headquarters, and another 216,000 sq ft centre in Tuas.

One advantage of this new facility is that there is no Goods and Services Tax levied as it is in a free trade zone. Furthermore, because it is closer to the port, transhipments can be processed faster and more cost-effectively, Mr Wong said.

This is part of NYK Logistics' efforts to be a bigger player in the freight management service.

Mr Takuji Nakai, chairman of the NYK Group South Asia, said the firm plans to handle one million standard-size container units a year by 2012.

Mr Wong said the Singapore facility will handle a small proportion of that.

Maritime and Port Authority of Singapore chief executive Tay Lim Heng said: 'In these challenging times, MPA remains committed to enhancing Singapore's position as a major maritime centre and shipping logistics hub. We...believe that Singapore's connectivity and infrastructure will facilitate the company's growth of distribution activities in the region and beyond.'

The new facility comes as the container shipping industry faces a prolonged crisis, with the slump in shipping showing no signs of letting up.

Neptune Orient Lines, the world's seventh-largest container shipper, said yesterday it moved 35 per cent less cargo in the six weeks to Feb 6 than in the same period a year earlier. This was bigger than the 24 per cent drop in the six-week period before that.

This article was first published in The Straits Times.