Gadgets moving via rail from China to Poland

Our tech gadgets are no longer being shipped from China to Europe. These days they are loaded on a train to Poland, according to Flextronics vice-president of operations John Scanlon.

Mr Scanlon who is originally from Clare, said the cost of labour in the coastal areas of China had risen to the point that hardware manufactures had moved inland.

“In China, manufacturing was typically set up in coastal regions in Schenzen in the south and in Shanghai, there are labour shortages in coastal China and the cost of labour is increasing significantly so we as manufacturers have to move to central China.” Faced with having to load goods on trains to bring them to the coast to ship them to Europe, Flextronics began using rail to bring consumer electronics over land to Europe.

“Right now we are doing trials on bringing products from China into Poland by rail. We are distributing PCs all over Europe from China for some extremely large customers like HP and Lenova, that product is coming from central China by rail into Europe.” Key to developing the logistics to track the shipping of goods to Europe and then their distribution to customer is software that was originally developed by an Irish company called Irish Express Cargo.

“In 2000, Flextronics recognised that this Irish company had started development of software to control the distribution industry before UPS and FedEx. So over the past 14 years Flextronics has taken that technology from Irish Express Cargo and developed it into a global solution for end to end visibility.”

Speaking at the IT@Cork tech summit, Mr Scanlon explained that all hardware manufactures were being squeezed by the convergence of technology.

“The market itself in consumer electronics is declining for a number of reasons. You have what we call product commoditisation. Once upon a time you had a digital camera, a mobile phone, a spirit level, where now you just have a phone. There is this whole convergence of technologies,” he said.

This has driven Flextronics to bet on the future being wearable technologies. The possibility of these is only beginning to emerge in the fitness sector with the rise of Fitbit and Jawbone which help track people’s activity and sleeping.

However the ultimate goal for Flextronics is to access the health business with technology that can help diagnose heart attacks and detect breast cancer.

“The fitness industry is the first adaptors. Once you are fitness business you get into the wellness business and once you get into wellness you get into the health business.”