Asia’s logistics service provider TKHS Group has changed the game for Macau’s IRs since launching its new high-tech warehouse in the heart of the Cotai Strip in 2016.
Hiding in plain sight in the shadows of Cotai’s integrated resorts sits the Macau home of Asian logistics service provider TKHS Group – a grand 4,000 square meter warehouse facility that has played and continues to play a vital role in shaping the Cotai Strip of today.
Opened in 2016, the new TKHS warehouse has quickly become the secret weapon powering Macau’s multi-billion dollar IRs to completion by providing a range of key pre- and post-opening services right on their doorstep.
“There has traditionally been a very limited supply of warehousing in the Macau market,” explains TKHS Executive Director Samuel Wilson, whose experience in the Macau logistics market dates back to 2005.
“We started off with one of the traditional old-type buildings in Macau, which really have a lot of limitations. They are typically accessed by small cargo elevators, have low ceiling heights and are generally quite small so they are inefficient to run in terms of moving product in and out and manpower.
Two years ago we decided to open up a state-of-the art warehouse located right off the Cotai Strip and within five minutes of all the integrated resorts. It’s brand new, has a proper loading dock, high ceilings, high security, part of it is even climate controlled – so that has really helped our operations a lot and has been very popular with our customer base.”
Logistics is often an afterthought when it comes to developing hotels and resorts of the scale seen around Asia, yet a well-designed logistics operation can make or break a company’s grand development plans. Getting the small details right is even more important when those plans involve CAPEX north of US$3 billion like MGM COTAI or US$4 billion as with Wynn Palace.
It’s with this in mind that Wilson has molded TKHS into a specialty logistics service provider for the gaming and hospitality industry.
“It’s quite a niche industry and not many people think about that aspect of building a big IR or a big hotel,” he says. “The logistics challenges are under-estimated, so we’ve found an area where we can really make a difference.
“There are a lot of challenges involved, certainly in regards to the timeline for gaming operations. Once a project gets the goahead, the developer will want it open as soon as possible in order to generate revenue. That’s where we’ve really found a need for a company like ourselves to come onboard and really manage the endto- end logistics from ex-factory through to installed on-site.”
The warehouse is impressive – not only for its sheer scale but also the lack of clutter. Clean and spacious, it’s high ceilings and large doorways house an array of carefully organized goods ranging from gaming machine parts and FF&E to thousands of boxes of top-secret documents. Despite the sheer scale of the record management side of the operation, the high-tech storage system ensures every single box and the documents it contains are safely sealed, stored and delivered upon request.
“In the IRs in Macau, they want to use as much of the area onproperty for front of house as possible, so back of house is typically limited – especially for storage or warehousing,” Wilson continues. “If they can make an area into a front of house revenue-generating area that’s certainly what they want to do, which means there is a need for off-site warehousing. To have a high-quality, purpose-built new modern facility is very attractive for them.”
For its Macau customers, TKHS boasts a total of 9,000 square meters of storage space including its new Cotai facility and some older space near the airport covering 5,000 square meters. Across the border in Zhuhai is another 5,000 square meters used primarily for FF&E.
As a logistics service provider focused specifically on the Asian gaming and hospitality industry, the company also boasts offices and warehouse facilities across the region’s key gaming hubs including the Philippines, Singapore, Vietnam, Korea and Australia.
It’s a broad scope with each location presenting its own unique set of challenges for local operators.
“Infrastructure is a challenge we see across Asia,” Wilson explains. “We see a lot of developing countries wanting to get in on the game and open casinos and resorts. The challenge is the infrastructure in those countries in terms of the port facilities, the airports, roads.
“In Cebu you can barely get a container truck down the roads so it’s about finding ways around those challenges. It might be hiring a barge to get to a site to avoid the roads.
“We had to charter an aircraft for one of our projects which is very expensive but due to the timeline it was needed. It was a large cargo plane and we got it in but the airport didn’t actually have the proper equipment to unload the aircraft.
“They’d never experienced a charter of that scale but they had some old equipment in the corner and luckily the plane came with its own engineer, so he came off and fixed the equipment and we were able to use that to unload the cargo.
“I was actually on the runway myself coordinating the operation with the pilot of the plane at 1am to get it done.”
In Macau, Wilson once found himself carrying suitcases full of pillows and cushions across the border gate from China just a few hours before the well-known Chairman of one Macau concessionaire arrived to stay in his new IR’s suites for the first time.
“The information came in very late and the border was closed to cargo for the day, but the management team really wanted the room perfect for the Chairman – so that’s what we needed to do to solve the problem,” Wilson laughs.
More often than not though, overcoming logistical challenges starts from day one.
“It goes right back to the design of the buildings themselves,” Wilson continues. “As I said, logistics are often an afterthought so we’ve seen issues where you can’t get trucks into the loading dock due to height restrictions or turning circles. That’s a big problem when you have container loads of equipment and consumables coming in each week.
“That’s why we like to be involved with a project from the beginning so we can give some input into the design with the construction team, can look at the loading dock, can look at the space provisions and the number of lifts and offer up our ideas for possible improvements to be made that will ultimately make the property more efficient later on.
“It’s the same with procurement. For an IR project there will literally be tens of thousands of unique items being sourced and procured. How well that’s done really dictates how well we can do our job in terms of things like item numbering.
“If you have 10,000 items it’s very important that everything is given a unique number, everything is properly tracked in the paperwork and purchase orders, so anytime we go into a project we ask a lot of questions about who is doing the procurement and how it is being done. We’ll try and share best practices in that regard.”