Yuan Cheng Logistics Co., Ltd.
Shanghai, China Site Visit
June, 2015
By
Eric Xiang

Key Personnel:
Mr. Chen Shaohua, Key Account Business Department, General Manager
Ms. Zhou Yuan, Key Account Business Department, Project Manager

Yuan Cheng Logistics Co., Ltd. is a well-known logistics services provider in Shanghai, China. The company was founded in Guangzhou in 1988. It’s been headquartered in Shanghai since 2003. Its founding business was railway freight forwarding. Today, Yuan Cheng Logistics’ services include railway and truck transportation, freight forwarding, and warehousing and distribution mainly for the domestic market. It can handle international freight; however, it does not have an NVOCC (non-vessel-operating common carrier) license for ocean freight nor a Class A license for air freight. There are around 4,000 employees working in the company’s 33 branch offices.

For railway freight, Yuang Cheng Logistics has a joint venture company with the China Railway authorities. This helps to control space as railway freight is not easy to manage in China. Mengniu, one of the biggest Chinese dairy enterprises, uses Yuan Cheng Logistics as its leading logistics services provider for railway freight.

For inland transportation and trucking business, Yuan Cheng Logistics has around 3,000 trucks for city-to-city transportation and distribution within the city area. Some of the trucks are owned by the company, but most are subcontracted. Yuan Cheng Logistics has a good handle on managing both drivers and trucks.

Yuan Cheng Logistics manages 300,000 square meters of owned warehouse space in China. The company rents warehouse space for some special projects. Yuan Cheng Logistics has good experience in warehouse management.

Both trucking and warehousing are important to Yuan Cheng Logistics in providing contract logistics to key accounts. On its customer list, we can find Walmart, Geely, BYD, etc.

Other than railway, trucking and warehousing, Yuan Cheng Logistics is developing Yuan Cheng Express and Supply Chain Finance. Yuan Cheng Express is a door-to-door service with time limitations on the shipments including both general cargo and food that need temperature control. The goods are combined in one truck for delivery. The rates are more competitive than using a single refrigerated truck for cold chain. For Supply Chain Finance, Yuan Cheng Logistics has a cooperation with the bank through manifest pledge.

According to Mr. Chen Shaohua, Yuan Cheng Logistics is open to setting up a joint venture company with a partner who has interest in developing new business modes in China. If a small- or medium-sized logistics company has special business mode, Yuan Cheng Logistics has interest in a possible acquisition.

Yuan Cheng Logistics is a key player in China’s domestic market with a strong network. If the company develops more in both air and sea freight forwarding, it should see better growth.

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