¡¡¡¡An interview with Frederic Houdoyer, General Manager of Sinotrans Logistics Co., Ltd. Shanghai Branch
¡¡¡¡As the first overseas-listed Chinese logistics company, in the last four years Sinotrans Co., Ltd. (hereinafter referred as Sinotrans Shares) has been growing into a pioneer among the integrated logistics scheme by China National Foreign Trade Transportation (Group) Corporation (hereinafter referred to as Sinotrans).
¡¡¡¡To promote its main business, Sinotrans is gradually injecting the integrated logistics and shipping assets respectively into two listed companies (Sinotrans Shares and Sinotrans Shipping), aiming to become wholly listed.
¡¡¡¡Last January, construction on Sinotrans Shanghai Fengxian Logistics Centre began, which covers more than 220,000 m2. To investigate this, our reporter conducted an interview with Frederic Houdoyer, General Manager of Sinotrans Logistics Shanghai Branch. Immediately after the talk started, Frederic showed our reporter the photos taken on the construction site, his face glowing with satisfaction. ¡¡¡¡Improving the logistics layout ¡¡¡¡The first question raised by our reporter was why Fengxian was chosen to accommodate this logistics centre.
¡¡¡¡Frederic explained: ¡°The Shanghai Branch¡¯s existing warehouse only has approximately 30,000 m2 in storage area, which is already unable to meet the increasing demand from the fast developing Shanghai logistics market. The launch of Fengxian Logistics Centre will greatly expand the service capabilities as well as the scope of business of Sinotrans Logistics Co., Ltd. Shanghai Branch.¡±
¡¡¡¡According to reports, construction on Fengxian Logistics Centre has been moving on smoothly since early January this year, and in the coming July the No. 1 Warehouse is expected to be completed ahead of schedule. The whole project will be completed on 1st August, 2009. The advantageous geographic location may make it possible for Fengxian Logistics Centre to support the immense demand for logistics after the commencement of Yangshan Deepwater Port, its surrounding distribution business and the supplementing industries. On the other hand, the opening of Hangzhou Bay Bridge and Sutong Bridge will bring in even greater opportunities for this new logistics centre.
¡¡¡¡¡°With Shanghai as the centre, expanding business scope nationally has been chosen as an essential function for both Fengxian Logistics Centre and the Shanghai branch office.¡±Frederic is rather confident about this outlook. He told our reporters that there are two points unique for Fengxian Logistics Centre, compared with those previous similar projects.
¡¡¡¡Firstly it is the idea. The function of Fengxian Logistics Centre is not merely to distribute Sinotrans Shares¡¯ cargo throughout China, but also to nurture bonded warehouses for imported cargo based on its broad space of over 120,000 m2.
¡¡¡¡Then it is the platform. With an eye to the future, Fengxian Logistics Centre has retained 1.3-metre-high platforms in two warehouses, while 1.45-metre-high operating platforms have been reserved for all the other four warehouses. ¡¡¡¡Starting in the Midwest ¡¡¡¡Influenced by various factors including industrial upgrades and rising cost, Shanghai and other industrial enterprises in coastal areas have begun ¡°moving away towards both the hinterland and the outside¡± in recent years. This has forced those enterprises providing logistics services to face a thorny issue: make a choice about whether to follow behind or to quit reluctantly, when traffic conditions in the central and western regions are still far from sufficient compared with coastal areas.
¡¡¡¡To this end, Frederic said: ¡°As more manufacturers are moving from the coastal areas into the hinterland, regional characteristics are therefore transforming in the logistics market. Thus it is quite natural for a logistics enterprise, as the most direct response, to follow its customers in moving direction. However, cost is also the essential factor to be considered, to which those regional logistics enterprises are supposed to attach significance at strategic level. As to Sinotrans Shares, we are a national enterprise, then it will be more convenient to modify local business according to the market changes.¡±
¡¡¡¡At the end of October last year, Sinotrans for the first time invested in Sinotrans Shares, then the latter purchased all Sinotrans¡¯ assets, business and personnel located in Shandong, Guangdong, Sichuan, Chongqing, Anhui, Jiangxi and Hong Kong. After this first step towards the nationwide network layout, the second capital injection will be launched, with businesses scattered in Hunan, Jiangxi, Guizhou and some other provinces targeted for mergers and acquisitions. Distribution of these resources will lay a solid foundation for Sinotrans Shares to face the transferred industries. ¡¡¡¡Communication, standardisation and customer services ¡¡¡¡For Frederic, Chinese logistics enterprises are under constant development, and will thus certainly face more severe challenges as well as a larger scope to grow. So Frederic has particularly commented: ¡°For China¡¯s logistics enterprises to really develop, three aspects are worth noting: communication, (operating) standardisation and customer services.¡±
¡¡¡¡Among the three, Frederic deems communication the most important. ¡°Effective communication not only refers to that among internal departments, the various teams, leadership and staff or inter-employees, but also that between the company and the customers. The logistics industry highlights the cooperation interacting among all aspects, so only when the mutual understanding is assured, could the efforts double.¡±
¡¡¡¡On the standardised operating, Frederic stressed: ¡°Any industry, including enterprises further developing, standardisation is a must if circumstances allow, which is the important experience for development of modern industry.¡± Entering the 21st century, market segmentation is increasingly upgraded. The previous rather rough mode of services with full involvement however, regardless of the focus, will inevitably encounter bottlenecks when the enterprises develop to a certain extent. On the other hand, there has been a consensus that we should stress the focus and choose the right industries to explore. Whereas, Sinotrans Logistics has already identified a way forward, i.e. to focus on promoting business including fast moving consumer goods, retail, automotive, high-tech (electronic appliances), clothing. Fengxian Logistics Centre has put these concepts into practice and the well-organised planning for operating area will greatly promote the standardisation process.
¡¡¡¡¡°Now there is a substantial lack of leadership in China¡¯s logistics market, which means many enterprises are still proving deficient in several areas, among which customer service is a point to be emphasized. We must allow our customers to enjoy quick and thoughtful services so that they will remember our services and accept our concepts.¡±When mentioning the lack of a leading enterprise in the current Chinese logistics market, a topic is automatically involved: logistics integration. Frederic said: ¡°Sinotrans Shares is promoting the integration of its logistics resources, and one responsibility of the Shanghai Branch is to make part of the preparation for logistics network integration.¡±
¡¡¡¡Frederic believes that: ¡°In the near future, a large enterprise group of integrated logistics will definitely rise according to unified service standards, standardised operating process and an international characteristic.¡± |
