Changzhou Yabang Three Party Logistics Co., Ltd.
Changzhou, China Site Visit
December, 2014
By
Eric Xiang

Key Personnel:
Mr. He Huabin, Deputy General Manager

Changzhou Yabang Three Party Logistics (YB3PL) is a subsidiary of the Yabang Group, a private company focused on pharmaceuticals trading with 2012 gross revenues of RMB 30 billion. The Group has over 15,000 employees and is based in Changzhou, Jiangsu province. The Yabang Group’s primary business is pharmaceutical and consumer goods trading. Jiangsu Yabang Pharma Logistics Center Co., Ltd .(YBPLC) is the pharmaceutical trading subsidiary. Jiangsu Yabang Commodity Logistics Center Co., Ltd. (YBCLC) is consumer goods trading subsidiary. YBPLC and YBCLC have their own logistics departments. Therefore, Yabang Three Party Logistics provides logistics services to customers other than YBPLC and YBCLC.

YBPLC has a 30,000 square meter warehouse. As a pharmaceutical trading company, YBPLC purchases pharmaceuticals from over 3,000 pharmaceutical manufacturers and sells them to over 30,000 end users including hospitals and drugstores. YBPLC handles all of the transportation, warehousing and distribution.

YBCLC manages a 10,000 square meter warehouse of fast-moving consumer goods (FMCG). YBCLC buys the consumer goods from over 300 manufacturers and sells to 4,000 customers (most of them being small retailers). All the logistics are also handled in-house.

As mentioned earlier, YB3PL doesn’t provide logistics services for YBPLC or YBCLC. It has its own customers. YB3PL has a 30,000 square meter warehouse Changzhou and 20 trucks for distribution within Changzhou. It also has subcontractors is uses for an additional 100 trucks. YB3PL arranges the distribution in the Jiangsu province and nationwide city-to-city transportation from Changzhou. It uses agents at the destination cities to for local distribution management and customer service.

Gome (a famous home appliances retailer in China) and Liby (a well-known brand of customer goods in China) are customers. YB3PL provides warehousing to Gome. The service contract is for 10 years.

According to Mr. He Huabin, YB3PL is building a new 30,000 square meter warehouse because it has signed another long-term rental contract with a Japanese logistics company covering 10,000 square meters.

Since some Fortune 500 companies have manufacturing done in Changzhou, it’s a good opportunity for YB3PL to develop large accounts. Mr. He Huabin is focusing on sales and marketing. He has confidence in securing business from these target companies in Changzhou.

In addition to these three subsidiaries, the Yabang Group has a logistics park for less-than-truckload (LTL) transportation. Most of the local 3PLs lease warehouse space and do LTL loading there.

If YB3PL receives support from the Group in strengthening its network and/or combining with the logistics operations of YBPLC and YBCLC, it should lower its costs and secure more business.

Sources: A&A Primary Research, http://www.yabyy.com/