A&A Hi-Trust Freight Forwarding Site Visit 2-2014Armstrong & Associates

Hi-Trust Freight Forwarding (Tianjin) Co., Ltd.

Tianjin, China Site Visit

February, 2014

Eric Xiang

Key Personnel:

Ms. Mary Zhao, Vice General Manager

Hi-Trust Freight Forwarding (Tianjin) Co., Ltd. is a freight forwarder that was founded in 1997. It is headquartered in Tianjin with branch offices in Shanghai, Beijing and Xi’an. It has a staff of 100.

Hi-Trust Freight Forwarding holds an NVOCC (non-vessel operating common carrier) license and has signed contracts with main carriers operating ships in the Tianjin port.

The main business is based on CIF (cost, insurance, freight) terms for export shipments and Ex Works terms for import shipments. Direct customers are 95% of the business, which relies on an efficient sales team as 40% of the employees are in sales. Hi-Trust Freight Forwarding has a sales office in Xi’an and has developed nicely in west China as Tianjin is a gateway for northwest China. In addition, Hi-Trust receives substantial business from the Hebei province which is nearby Tianjin.

In Tianjin, Hi-Trust Freight Forwarding uses a customs broker as a business partner to do customs clearance for export and import shipments.

Hi-Trust is experienced in bonded warehousing operations, which can meet the needs of some customers who need duty deferred and bonded storage to save on costs.

Some of its customers are trading companies who have shipments export from Shanghai. So Hi-Trust Freight Forwarding opened its own office in Shanghai and has a local sales team to develop the market in east China.

According to Ms. Mary Zhao, its annual cargo volume is around 10,000 TEUs (twenty-foot container equivalent units) for ocean freight. This is considered a mid-sized local ocean freight forwarder in Tianjin.

For its export business, Hi-Trust mainly goes to North America and Europe and is using agents. It has four agents in United States and many agents in Europe. As the main business is based on CIF terms for exports and Ex Works terms for imports, Hi-Trust receives little return business from the agents. The bottleneck for Hi-Trust is it does not have remarkable growth, and it is hard to get return business from the overseas agents.

Its management team is thinking about any change including finding qualified agents to develop the market together for quick growth. However, there is the barrier to communicate with oversea agents because of different cultures. Hi-Trust Freight Forwarding is open for cooperation opportunities from overseas. It trusts that its local experience and sales power will benefit any partner.

Hi-Trust Freight Forwarding is strong in north China. What its needs to do is to build a strong network in east China and south China, as a strong network is important for expansion. It also needs more experience in developing overseas agents.