skynet

UNIVERSITI KEBANGSAAN MALAYSIA EPPM2033

1.0. Introduction

Courier industry in Malaysia has evolved into a new perspective with more

than 100 players in the market. Skynet Worldwide (M) Sdn Bhd. is proud to be

one of the leading domestic courier companies with current the complete

network located strategically in both Peninsular and East Malaysia. Forming

strategic alliances with DPEX Worldwide Pte. Ltd. Is Skynet’s competitive

advantage in developing in international market not just regionally; it enables

Skynet to provide Fast, Accurate, Reliable express service to Skynet’s clients

everywhere on earth.

In this case study, mainly focus on how Skynet worldwide (M) Sdn Bhd

operate, and how Skynet manage to delivery goods worldwide (international

shipments) and also how Skynet

promote its courier products and services to the customers.

In this case study we will undertsand how courier company such like Skynet

Worldwide (M) Sdn Bhd operate and how they handle service delivery from

Sender until Receiver for international shipment and also domestics. In the

process of delivery goods/package/parcel/documents to international

destination, involve so many process such like how goods/package will

processing in logistics, warehouse, depot, cargo, then how Skynet manage the

transportation for delivery the goods/package to international destination.

During process delivery goods/package(International shipment) also invloving

insurance coverage of packages/goods,and customs & tax duties.

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2.0. Objective

The objectives of the Case study are:

PRIMARY OBJECTIVES

To know and understand how Skynet Worldwide (M) Sdn Bhd,

operation in Malaysia

To have a thorough understanding of how logistics system works in

Skynet.

To know how Skynet manage to delivery goods worldwide (process of

delivery).

To know how Skynet promote thiers Courier product & services.

SECONDARY OBJECTIVE

How Skynet co-operation or alliances with DPEX Worldwide Pte. Ltd.

in developing in international market.

To know about important of Logistics, Warehousing, Depot, Cargo, and

Transportation In courier industry.

Process involves in delivery goods worldwide (International shipment)

Customs Policies and duties tax

Risks of currency exchange in international trade

Risks of delivery goods worldwide

The dangerous item

Insurance coverage

To know whether the customers are satisfied with the existing range of

service pattern.

Competitive advantage

3.0. Company Profile

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3.1. About Skynet

Skynet Worldwide (M) Sdn Bhd is one of the leading domestic courier

companies in Malaysia with more than 80 branches located strategically

throughout the country and a strong alliance with DPEX Worldwide (HQ in

Singapore) which covers more than 150 countries across the globe. We are

committed to provide Fast, Accurate, Reliable (FAR) express delivery

service to customers throughout the world.

Skynet has been in Malaysia for more than 15 years and currently owns and

operates an extensive network of 59 offices and 23 points of access with

staff strength of more than 1000 people and 546 vehicles on the road and

many air routes to and from East Malaysia and international destinations.

Forming strategic alliances with DPEX Worldwide Pte. Ltd. Is our

competitive advantage in developing in international market not just

regionally; it enables us to provide Fast, Accurate, Reliable express service

to our clients everywhere on earth.

We provide next-day service, our core business, to our customers in all

major and small towns. Thousands of documents and parcels move through

our network system daily and arrive at consignee the very next day.

HQ Skynet Worldwide (M) Sdn Bhd is strategically located in Petaling

Jaya. We deliver the highest number of consignments in Klang Valley day

in and day out for our stations as well as picking up the most consignments

to send to our network for deliveries throughout Malaysia. On average, we

deliver and pick up 9000 consignments daily.

HQ in Petaling Jaya also serves as a hub for the network shipment. It

transits and sorts all shipments from the entire network. We operate a road

and air line-haul system daily in order for us to move all the consignments.

Currently, we are running 18 routes of road line-hauls, besides Klang

Valley line-hauls, whereas all trucks coming from stations to HQ carrying

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shipments for all stations and going back to stations with shipments meant

for their deliveries. With 13 air line-hauls mainly to and from East Malaysia

are in place to ensure the “next day” service. There are three international-

bound air line-haul for all international shipments to Singapore and the rest

of the world.

Since 1994 Skynet has emerged itself in the development of fully integrated

ICT system to link up all our stations in Malaysia and counterpart overseas.

As a result of our established IT system Skynet was awarded SMB ICT

Adoption Award 2006. The system “Courier World” has been the outcome

of these efforts. Courier World (CW) is a full spectrum platform ICT

System. It starts from pick up to POD image on the web and link directly to

generate financial statements. This system has helped us to improve our

efficiency and effort greatly.

Human resource is extremely important in our nature of business; we

constantly provide trainings, courses, workshops and seminars either

internally or externally to all level of our staff to upkeep their skills and

knowledge in order to enhance our service quality. Obtaining ISO

9001:2000 certification in June 2006 is only the beginning of our crest for

high-level operations excellence mission, we want a Quality Management

System (QMS) in our network not just a certificate of recognition. ISO will

help to put in a systematic, competent and customer focused QMS in

Skynet, that’s why we take this certification seriously.

We believe that a complete network coverage, a strong line-haul

infrastructure and an advanced ICT in our system, we are poised to be a

courier company in line of our vision as an Express Carrier of Choice and

our mission of providing Fast, Accurate and Reliable (FAR) courier service

to our clients everywhere on earth will be accomplished.

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3.2. Vision & Mision

Vision

“To be An Express Carreir of Choice”.

Mission

Providing “Fast, Accurate & Reliable” (FAR) express service to our

clients everywhere on earth.

3.3. Corporate Quality

Fast, Accurate and Reliable (FAR).

3.4. Shared Value

Don’t give up

Direct interaction

Fail to plan, plan to fail

Communication

Coordination

Admit & accept mistakes

Proper HR practice

Respect each other

3.5. Quality Policy

We strongly beleive in providing Fast Accurate Reliable (FAR) service

to meet our customers’ requirements and strive to exceed meeting thier

expectations. We are fully committed to continually improve our

Quality Management System (QMS) to enhance our effectiveness to

achieve customer satisfaction.

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4.0. Products & Services:

4.1. Types of Product & Rates.

EXPRESS DOCUMENTS EXPRESS PARCEL DOMESTIC EXPRESS

For the fastest Worldwide

door to door delivery of

your urgent document items

that do not require customs

declaration.

Worldwide door to door

delivery of your urgent

declarable items. Our

efficient customs clearance

staff will ensure fast

delivery to your recipient.

Three original invoices are

required for the customs

declaration.

When you need an efficient

Countrywide delivery

service that delivers value

for money service, choose

the Domestic Express

service. We can collect and

deliver to your

requirements, whether

you're sending documents

or parcels you can expect a

high quality service at

affordable rates

*Rates are depend on type of products and weight (measure).

*I had Attach Products Rates.

4.2. Services

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Special pick up and delivery Service

Skynet offers a range of special collection and delivery options including:

• Extended service hours

• Weekend and holiday service

• Remote areas service

• Dedicated truck for heavy or bulky load.

Diplomat Service

Have you got a shipment that needs to be collected and delivered

immediately? For shipments that just can't wait until tomorrow, Skynet

offers a 24-hour door-to-door emergency delivery service. You can count

on us to be Fast, Accurate & Reliable

POD Information Service

• Proactive delivery notification via various channels such as e-mail, SMS,

fax and phone for individual or complete shipment management upon

request

• On-line tracking with advanced tracking facilities with image to monitor

your shipments at www.Skynet.com.my

Payment & Billing Services

• Skynet offers flexible billing and payment options for transport charges,

duties and taxes. This flexibility gives you the freedom to bill the sender,

receiver or a 3rd Party.

Packaging

• Free of charge Standard Packaging that consists of Skynet flyers, bags and

document envelopes

• Special Packaging that consists of premium quality Skynet cartons and

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boxes, meeting shipping requirements for many different products

• Advice on customs regulations and documentation

Bulk Mailing

When you have bulk shipments, call us and we will offer the following for

your convenience.

• Skynet pick-up - no need to visit the post office

• Sorting - no need to sort your mail before pick-up

• Use of Skynet Air waybills / barcodes - simple and easy process and

tracking of shipment status

• One simple invoice sent after shipping - no need for pre-payment

Special Handling / Security Handling

• Special Handling Department at Skynet focuses on handling of sensitive

materials, security and high valued items. This department has a separate

sorting area as well as a special fleet of vehicles. Items designated to

Special Delivery Department are handled by a group of specially trained

staff.

Warehousing

We do pick and pack for your goods which are stored at our warehouse, it

is an one stop service provider for all your goods throughout Malaysia.

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4.3. Report

Based on Skynet Worldwide (M) Sdn Bhd Annual Report show that 79% of

shipment are within Malaysia (Domestic) and 21% are international

shipment.

Domestics79%

International21%

Sales

4.4. Promotion

To promote Skynet’s courier products/services, Skynet make sure that both

quality and quantity of service at cheapest price and also fast service with

cheaper rates as well as other facilities of online tracking, competitive rates.

The lowest price and good services are most effective way to way to

promote courier service.

These are some way how Skynet promote thiers services:

Advertisement

Online Ad

Website and Blog

Referrals through loyalty customers

5.0. Customers & Payments

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5.1. Types of customers

Skynet mainly focus certain type of customers, which are:

Small businesses

Meeting customers’ expectations through IT

Public People

5.2. Customers Feedback

Skynet always make sure all customers satsified with Skynet services and it

is important that Skynet continue improving quality of service through

customer feedback. Through Customer Feedback is best way to ensure

measure company current quality services. And it is also cheapest way. To

ensure Skynet quality of service is the better than its competitors, Best way

to do this is to listen to your Customer Feedback and take action if to do so.

Customer satisfaction is to make sure company sale always growing.

Customer comments, suggestions and responses about a company's

products, business practices and customer service orientation are one of the

biggest advantages of customer feedback surveys. Critical inputs and

answers can help a company to develop better customer-retention programs.

5.3. Other Facilities to Customers

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Skynet offer other facilities to customers to make sure customers always

get the best services from Skynet. The facilities Skynet offer are:

Online tracking and live update

Billing services

Membership to get best price

For Business Customers- Skynet Pickup the goods from door to

doors services.

Some Example of how live online tarcking works:

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5.4. Payment Methods

Skynet offers flexible billing and payment options for transport charges,

duties and taxes. This flexibility gives you the freedom to bill the sender,

receiver or a 3rd Party.

Skynet only accept 2 type of payment, which are:

Cash

Credit Card

6.0. Guarantees & Quality of Services

6.1. Guarantees

We guarantee all of our services at Reliable Runners. At our option, we will

either refund or credit your transportation charges upon request if we

deliver your shipment late or more after our delivery commitment. We will

attempt to notify you twice by phone if there is any change in the time of

delivery.

Skynet will refund money back in some case, which is:

Late Delivery

Broken or damage or lost due delivery (Skynet will cover losses)

6.2. Insurance

Courier insurance is a specialty insurance that covers individuals who

deliver products for a fee. Mostly courier service has courier insurance now.

What courier insurance will do is prevent you from being held personally

liable if the materials you are carrying and delivering are damaged or stolen

during transit. They won’t protect the vehicle or the individual, they will

only protect the value of the materials being delivered. The basic function

of courier insurance is its coverage property such like packages or

documents for a fee, while it's in your car or truck.

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So in case, your document, parcel or package lost or damage when delivery

Skynet will cover customer’s lost- the value of items. Courier insurance

policies are generally inexpensive.

Skynet will cover any losses or damage during delivery the goods through

insurance that customer buy.

6.3. Award & Recognition

Since 1994 Skynet has emerged itself in the development of fully

integrated ICT system to link up all our stations in Malaysia and

counterpart overseas. As a result of our established IT system Skynet

was awarded SMB ICT Adoption Award 2006. The system “Courier

World” has been the outcome of these efforts. Courier World (CW) is a

full spectrum platform ICT System. It starts from pick up to POD image

on the web and link directly to generate financial statements. This

system has helped us to improve our efficiency and effort greatly.

Recognition :Certified ISO 9001:2000

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7.0. Rules & Other Information

7.1. Rules

*See the attachment for more detail about rules in courier service.

7.2. Restricted commodities

RESTRICTED COMMODITIES (Dangerous Goods)

All items can be shipped through our service EXCEPT THE FOLLOWING:

Drugs Hazardous Materials Perishables Passport

Plants Firearms Pornographic

Materials

IATA Restricted

Items

Tobacco Livestock Currency (Cash) Precious Stones

Liquor Cosmetics Pirated CD, VCD,

DVD

Pharmaceuticals

VOLUMETRIC CHARGING

When sending a bulky but lightweight items, volumetric charges will be

applicable. This is to make up the space the shipment will occupy on the aircraft.

FORMULA VOLUMETRIC WEIGHT

= Length ( Cm ) X Width (Cm) X Height (Cm ) / 6000

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7.3. Does & Don’t of Packing

DON'T send cash, jewellery, currency

(We will no be liable or responsible for these shipments).

DON’T recycle old labels on shipping cartons.

DO place new address labels and have names and addresses of both shipper and

recipient on each label.

DON'T allow glass to touch glass.

DO wrap each item individually in cushioning foam material. DO have your fragile

sticker attached

DON'T ship items wrapped in paper.

DON'T use household cellophane tape.

DO seal packages securely with pressure-sensitive plastic tape.

DON'T ship items loose in carton.

DO use fillers for inside protection.

DON'T ship used hypodermic needles.

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DON'T ship blood, urine or liquid diagnostic specimens;

DO follow requirements for approved packaging when shipping specimens.

DON'T allow packages to get damp or wet before they are picked up.

DON'T secure packages with string and rope.

DON'T use damaged cartons, cartons without flaps intact, or chipboard cartons.

DO use strong corrugated cardboard boxes.

7.4. Tax Duties

DUTIES AND TAXES

All duties and taxes will be bonded by con signee or shipper.

8.0. Network & Affilities

8.1. Domestic

Below are Skynet Worldwide (M) Sdn Bhd, Station Network Area:

West Malaysia

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8.2. International

Skynet Worldwide (M) Sdn Bhd Forming strong strategic alliances

with DPEX Worldwide Pte. Ltd. (HQ in Singapore) which covers more

than 150 countries across the globe Is our competitive advantage in

developing in international market not just regionally; it enables Skynet to

provide Fast, Accurate, Reliable express service to our clients everywhere

on earth. There are three international-bound air line-haul for all

international shipments to Singapore and the rest of the world. We are

committed to provide Fast, Accurate, Reliable (FAR) express delivery

service to customers throughout the world.

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The DPEX Network stretches across 7 continents, providing the Global

business community with fast, reliable and secure Express delivery to over

180 countries and territories Worldwide. DPEX’s Worldwide Network of

offices and agencies are substantial industry Express companies in their

respective Countries, providing peace of mind to our local customers.

"Net-Trak" DPEX fully integrated shipment tracking system, links DPEX

network of Worldwide offices, allowing every DPEX Country to exchange

data, thereby ensuring DPEX customers can be fully updated on the status

of their shipment at all times. Through DPEX wholly owned system and

communications centre, "Net-Trak" can provide such features as "track and

trace" and "proof of delivery" via the internet.

Through DPEX network of franchisees and alliances provide access to 7

worldwide hubs, 340 service centers, the use of 265 flights per day, more

than 2500 vehicles and over 4000 employees. DPEX network has the

capabilities to serve effectively.

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Example of how Skynet network works (Domestics and International)

9.0. Logistics

9.1. Logistics

Logistics is concerned with getting the products and services where they are

needed and when they are desired. It is difficult to accomplish any

marketing or manufacturing without logistical support. It involves the

integration of information, transportation, inventory, warehousing, material

handling, and packaging.

The Skynet operating responsibility of logistics is the geographical

repositioning of raw materials, work in process, and finished inventories

where required at the lowest cost possible. Without logistics support no

activity can be performed to meet defined goal. The current challenge is to

perform logistics scientifically in order to optimize benefits to the

organization. Logistics is a planning function of management. In Skynet’s,

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Logistics function is concerned with taking products and services where

they are needed and when they are needed.

9.2. Warehousing

We do pick and pack for your goods which are stored at our warehouse, it

is an one stop service provider for all your goods throughout Malaysia.

Skynet Worldwide (M) Sdn Bhd manages and operates a fully dedicated

warehouse facility equipped with a professional racking system in which

Skynet utilize advance stock management softwares. Skynet can handle

exchanges, credit and repair returns. They maintain optimum buffer stock

and inventory levels that improve inventory accuracy. This includes, of

course, items sorting, repackaging and labeling. Skynet ensures the

international and national side of the logistics operations from the

warehousing to the final distribution.

9.3. Depot

Courier depot is the result of Skynet’s effort to provide convenience to

Skynet’s customers everywhere. It is basically a drop-off point for Skynet’s

customers. Skynet are in the midst of providing multi point-of-access to

Skynet customers to make it simple, easy and convenient for customers to

send customers document or parcel through Skynet service.

As Skynet continue to strike for customer service excellence, Skynet have

appointed selected businesses at convenient locations throughout the major

towns in Malaysia to team up with Skynet to provide drop-off service. It is

a service point where customers can transact any courier or express delivery

activities.

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9.4. Cargo

Cargo transport is a form of transport which is designed to move goods

from one location to another. Also known as freight transport, cargo

transport is typically used to move products which are intended for

commercial sale, although things like mail may also be treated as cargo for

transport purposes. There are a number of different kinds of cargo transport

available to both individuals and companies, ranging from a package

delivery service used to move products from companies to end consumers

to a shipping service which carries entire containers of products from one

port to another.

They have many option to delivery the item such like by aircraft, ship, train

or any other vehicles. All will involve cost, insurance and services. So its is

important to choose the better transport to give the best services to

customers. Because of Skynet is the fast courier they send item through

aircraft (airlines) to international destination to make sure the item deliver

as fast as possible.

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However the shipment to international destination are arrange by Skynet’s

affiliance, DPEX Worldwide.

9.5. Transportation

Transport Functionality

Transportation is one of the most visible elements of logistics operations.

Transportation provides 2 major functions: product movement & product storage.

Product Movement

Whether the product is in the form of materials, components, assemblies, work-in-

process, or finished goods, transportation is necessary to move it to the next stage

of the manufacturing process or physically closer to the ultimate consumer. A

primary transportation function of product movement is moving up and down the

value chain. Since transportation utilizes temporal, financial, and environmental

resources, it is important that items be moved only when it truly enhances the

product value.

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Product Storage

Skynet uses all the modes of transportations that is

airways

roadways

waterways

rail freight

Skynet has three international-bound air line-haul for all international

shipments to Singapore and the rest of the world & 546 vehicles on the road.

Depending upon the final destination where the goods have to finally reach and

the type of package the customer has paid for, Skynet uses the individual

modes of transport or a combination of either of these or all. Once again the

geographical location and how fast the goods have to be delivered are the

factors for the final selection of modes of transportation. The concept of

economies of scale and economies of distance are both taken into consideration

in case of larger consignments where Skynet provides an appropriate logistical

solution which helps in reducing the overall cost for the customers.

9.6. Process of Delivery Goods

To delivery goods (parcel, Package and documents),its involve so many

process. the involving process of delivery of goods for domestics are different

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from Process of delivery goods toInternational destinations. Here are some

process involve at Skynet in delivery goods (parcel, Package and documents):

Domestics:

International Destination: (DPEX)

9.7. Customs & tax Duties

Customs requirements are specific to each destination country. We can arrange

all the paperwork necessary to achieve the earliest and most streamlined

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Customs Clearance into the destination country. It’s all part of our service

commitment to you. Our service includes pick-up, re-packing (where

requested), processing, air services, all airline charges and documentation fees,

customs clearance (not including government duties and taxes). Government

Duties tax charge and rules are different in each countries.

10.0. Financial

10.1. Payment to DPEX

10.2. Annual Report

Skynet Annual Report show that, the sale of courier to International

Destination has increase from 18% last year (2010) to 21% this year (2011).

This is because mostly customers realize that Skynet offer the lowest rate

comparing than other courier company such like DHL, Fedex, UPS and others.

This is biggest factors, why the sell of international shipment has increase.

10.3. Risk of Delivery

In Courier industry, they have some risks in shipment/delivery goods, which

are:

Time- Late shipment

Cost involving if the delivery shipment are in small quantities so this

will effect the cost of transport.

10.4. Risks of Currency Exchange

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Currency risk or exchange rate risk is a form of financial risk that arises from

the potential change in the exchange rate of one currency in relation to another.

Investors or businesses face an exchange rate risk when they have assets or

operations across national borders or if they have loans or borrowings in a

foreign currency. An exchange rate risk can result in an exchange gain as well

as a loss. So, The risk that the return on an investment may be reduced or

eliminated because of a change in the exchange rate of two currencies.

In Business like partnership or affilities in courier industry also may have risk

in currency exchange. Because in affilities or partnership with courier service

in another countries have to pay in US dollar or Sterling pound, so because of

US and Sterling pound are not stable everytime will effect in your payment to

courier partner or affilities.

The export and import activities require uses of foreign currencies

If an export/import company conducts business in a volatile market, it is

exposed to a higher degree of currency rate risk. Sudden changes can be

disastrous for a company that does not plan ahead by detracting from its

bottom line.

Types of currency risk

There are two basic types of currency risk:

Transaction risk is the risk that an exchange rate will change

unfavourably over time.

Translation risk is an accounting concept. It is proportional to the

amount of assets held in foreign currencies. Changes in the exchange

rate over time will render a report inaccurate, and so assets are usually

balanced by borrowings in that currency.

A currency risk exists regardless of whether investors invest domestically or

abroad. If they invest in the home country, and the home currency devalues,

investors have lost money

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11.0. Competitive Advantage

Skynet Worldwide (M) Sdn Bhd sustainable competitive advantages are as

follows :

Leading domestic courier companies in Malaysia with more than 80 branches

located strategically throughout the country and a strong alliance with DPEX

Worldwide (HQ in Singapore) which covers more than 150 countries across the

globe.

Skillful and trained labour

IT empolyees/ Staffs from India whose specialize in IT

Wide Network Coverage

Up to 80 Network stations with extended hours terminal-based outlets designed

to facilitate your customers demand.

High Quality Customer Service

Friendly local service provided by fully trained and equipped customer care

consultants.

A team of customer service offices are equipped to further support your

customers query.

Proven Business Process

Smooth processing operation 6 days a week.

Highly integrated operating environment

Skynet offers ideal integration of its network system services into your existing

IT infrastructure leveraging on the existing operating environment of the

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company. Skynet have a group of well-experienced professionals dedicated in

one stop centre solution consultation, implementation, operation and support

for our entire partner.

Capable in handling large transaction or bulk transportations

timely commitment

Lowest Rates than others courier service

Fastest service in all location in malaysia

Many Loyalty customer who can promote or recommend Skynet to thiers

friends

546 vehicles on the road

These are the tools for enhancing productivity and creating value for

customers, and strategies to help Skynet valued customers in gaining advantage

all over Malaysia. Skynet definitely has the capacity and capability to be a

potential service provider company to undertake a scope of work as per term

and requirement by customer.

12.0. Conclusion

Skynet always focus on customer satisfaction through theirs fast & best

services to thier customers. To acheive this all the systematic and effectiveness

operation in Skynet is play the most important part. Through good and fast

services and lowest rates can guarantee the customers satsfaction. In positive

way this is best strategy to attrack more customers in couriers industry.

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For international shipment, Skynet Worldwide (M) Sdn Bhd Forming strong

strategic alliances with DPEX Worldwide Pte. Ltd. (HQ in Singapore) which

covers more than 150 countries across the globe Is Skynet’s competitive

advantage in developing in international market not just regionally.

In process of delivery of goods/package/documents from sender to receiver for

international shipment, involve so many process such like how goods/package

will processing in logistics, warehouse, depot, cargo, then how Skynet manage

the transportation for delivery the goods/package to international destination.

During process delivery goods/package(International shipment) also invloving

insurance coverage of packages/goods,and customs & tax duties.

Also involving risks in process of delivery goods such like risk of delivery low

quantities which will effect on cost of transportation, and risk of currency

exchange which Skynet have to pay to Skynet’s affilities/Partner, DPEX

Worldwide Pte. Ltd.in US Dollar or Singaporean dollar.

Finally, is it important to courier services company operating systematiclly to

make sure they are the leading comparing than thier comptitors, and also

important to know what are process of delivery of goods involvong for

international shipment, to find the best way to all operate smoothly in lowest

cost and best services providing to customers. Because lowest rates and fast

services is the major strategy to attract customers in courier industry.

13.0. Reference

1. www.Skynet.com.my

2. Ball/ Geringer/ Minor/ McNett: International Business 12edition:

McGraw Hill International Edition Text Book

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http://www.skynet.com.my/


14.0. Attachment

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skynet

Documents