A&A Suzhou Orient Bestway Site Visit 10-2010

Suzhou Orient Bestway International Transport Co., Ltd.

Suzhou, China Site Visit

October 28, 2010

Eric Xiang

Key Personnel:

Mr. Fei Chunwei, Manager

Suzhou Orient Bestway International Transport Co., Ltd. (Orient Bestway) is the largest ocean freight forwarder in Suzhou. It was officially registered with the Chinese government in 2004 after beginning operations in 1996 when its management team started the forwarding business as an off-shoot of The Orient Group. Today, it has 80 employees. Its gross revenue was $18 million in 2008, $15 million in 2009 and it forecasts $24 million for 2010. Suzhou, the base of its operations, has 6.3 million residents and is located 60 miles west of Shanghai. It has a large industrial park which is a joint Chinese/Singaporean governments operation with a free trade zone (FTZ).

Orient Bestway holds an NVOCC (non-vessel operating common carrier) license and is the booking agent in the Suzhou area for Orient Overseas Container Line, China Shipping Container Lines and Sinotrans. Its annual ocean container volume is around 25,000 TEUs (20' trailer equivalent units) of which 60% are destined to North America and 40% are destined to Europe and Asia Pacific. Seventy percent of its gross revenue comes from local, direct customers and the rest is from other small third-party logistics providers in the Suzhou area.

Orient Bestway has small air freight operations and uses a subcontractor at the Shanghai Airport. Its annual air freight volume is 500 tonnes.

Orient Bestway holds a customs broker license. It provides customs clearance in Suzhou including inbound, outbound and in transit shipments at the FTZ.

There is a common, 200,000 square meter warehouse in the Suzhou FTZ. Orient Bestway rents space in the warehouse for individual customers. It has extensive experience in managing warehouse operations including inventory management, customs clearance and local delivery.

Orient Bestway has made investments in its computer network, software and EDI (electronic data interchange) system. It is able to connect to the Shanghai Customs Transportation Exchange. The ability to use the Shanghai Customs Transportation Exchange makes it much easier when handling shipments from Suzhou exported via the Shanghai gateway.

Orient Bestway uses the CARG0 2000 computer system. Orient Bestway and its customers can track shipment status information such as vessel voyage, customs declaration number and detailed costs lists.

In Suzhou, Orient Bestway's customers include: Asia Pulp & Paper, Eaton, Emerson, Baxter, Gold Huasheng Paper, Samsung and others. These customers rely on Orient Bestway for mainly ocean freight forwarding. Orient Bestway is confident about developing more business in the Suzhou area because of its local experience.

Orient Bestway is interested in expanding in other cities like Shanghai and Shenzhen. It is also interested in opening a U.S. office. Orient Bestway has a good track record in Suzhou but it will need to build a strong network for future expansion.

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