Apex Logistics Rapidly Ascends in the Exceedingly Competitive Air Freight Market
Elk Grove Village, Illinois USA Site Visit
June 7, 2016
Ken Au – President, Americas
Michael Piza – Senior Vice President Sales and Marketing, Americas
Dan Fung – Station Manager
Lai Wei – Assistant to the President, Americas
Apex Logistics International Overview
Founded in 2001, Chinese headquartered Apex Logistics International (Apex) is a rapidly growing international third-party logistics provider. Its gross revenue reached more than $600 million in 2015 and it ranks 26th on our 2015 top air freight forwarder list with 187,000 metric tons. Its ocean freight forwarding volumes topped 15,000 TEUs (trailer equivalent units) in 2015.
Apex is an integrated provider with a core service offering including air and ocean freight forwarding, domestic transportation management, customs brokerage, consolidation/deconsolidation, warehousing, air charter business, and supply chain consulting/trade compliance training. It focuses on developing integrated international end-to-end supply chain solutions for customers and has a solid footprint in Asia, Europe, North America, South America and Australia. Its target industry segments include High-Tech, Fashion & Garments, Automotive, Consumer & Pharmaceutical, and Industrial.
Apex is a licensed NVOCC (Non Vessel Operating Common Carrier) and holds IATA/CNS (International Air Transport Association/Cargo Network Services), C-TPAT (Customs-Trade Partnership Against Terrorism), and TAPA (Transported Asset Protection Association) certifications.
For its air freight forwarding services, Apex contracts with over 50 airlines; its primary carriers include AirBridgeCargo, Cathay Pacific, Cargolux, China Airlines, China Cargo, China Eastern, China Southern, EVA Air Cargo, Hainan Airlines, Korean Air, Polar Airlines, and United. For ocean freight, it partners with multiple ocean carriers including China Shipping, CMA CGM, Cosco, Evergreen, Hanjin, Maersk, Matson, MOL, NYK, OOCL, and PIL.
As a licensed customs broker, Apex assists customers with customs clearance and trade compliance issues. Apex utilizes its proprietary transportation management system for import and export order/shipment management. The system’s functions support the on-time and accurate completion of regulatory declarations on import and export shipments, even on remote filings. In addition, Apex’s customs brokerage operations can support specialized customer audits and manage duty draw-backs, bonds, harmonized tariff classifications, and line reviews.
In June 2015, Apex received strategic investment from MBK Partners–a leading Asian private equity firm. The investment is being tapped to drive business growth through organic network expansion, bolt-on acquisitions, ongoing information technology infrastructure upgrades, and for improvements in human resource management capabilities.
Apex Logistics Office Network
Apex Logistics in Greater China
In Greater China, Apex has a staff of over 1,200 based in 15 offices including Beijing, Tianjin, Qingdao, Chongqing, Chengdu, Zhengzhou, Hangzhou, Shanghai, Nanjing, Ningbo, Shenzhen, Guangzhou, Xiamen, Hong Kong and Taiwan. Its Greater China warehousing footprint is about 20,000 square meters and its operations handle about 15,000 metric tons of air freight per month. Apex’s air freight forwarding operations were ranked fourth by the IATA’s CASS (Cargo Accounts Settlement Systems) in 2013/2014, behind Schenker China, Beijing Kang-Jie-Kong (Expeditors), and Panalpina World Transport. Apex utilizes Guangzhou, Shanghai, and Beijing as its three major air freight gateways in China. Each gateway airport has its own set of operating rules which Apex must adhere to.
Apex Logistics in the U.S.
Apex established its Los Angeles, California U.S. corporate headquarters in 2003 to support wholesale customers’ air imports from Asia. Today, with seven offices and approximately 200 employees, its U.S. business is centered around retail air freight forwarding customers and have a combined warehousing footprint of 100,000 square feet.
Of the seven U.S. operations, JFK, LAX and ORD are the largest. In total, they have around 150 employees and 55,360 square feet of warehouse space.
Elk Grove Village “ORD” Warehouse Operations – E-Retail in Action
During our visit, we toured the 15,360 square foot Elk Grove Village, Illinois “ORD” warehousing operation. The operation has a mix of retail and high-tech customers requiring air freight forwarding import/export deconsolidation/consolidation services and more advanced value-added services. It has high value goods and dangerous goods areas, and in one section of the warehouse, there is four-high racking for longer term storage. The operation typically runs six days per week from 9 AM to 5:30 PM with a staff of 15-20 depending on outbound volumes. Because the operation focuses heavily on retail and consumer electronics customers, “Black Friday” and retail holidays drive large volume spikes. During the 2015 retail holiday peak, the operation ran in multiple shifts totaling 12-16 hours per day.
Most of the work performed in the operation is for a large global online e-retailer. Apex processes and consolidates export orders in small package quantities into large palletized containers for air freight transportation to gateways in China and South Korea. It currently handles 400-500 metric tons per month for the e-retailer through its JFK, LAX, and ORD operations. Apex expects the volume to increase to 600 metric tons a month in June due to the growth of its e-retail customer and from the ever-increasing Chinese consumer demand for imported goods. In addition to the large online e-retailer, Apex also provides similar services to many other smaller shippers.
In addition to U.S. exports, Apex is also managing e-commerce imports within China. It has a comprehensive e-commerce solution that includes port-to-port air and ocean shipping, custom clearance for parcels and bulk freight, warehouse fulfillment, and last-mile delivery. For one customer, it is running a dedicated 40,000 square foot distribution center in China. The operations run five days per week and its staff manage customer inventory and fulfill e-commerce orders. Holding special contracts with last-mile carriers, Apex provides a cost-effective supply chain solution covering small package to full truckload shipment deliveries.
Apex Logistics International Operational Summary
Solid process control and integrated technological capabilities are driving the rapid growth of Apex Logistics International. As cross border e-commerce continues its upward trajectory in China, Apex is well-positioned to play a significant role. Its ascent has brought Apex onto our radar, and we expect it will get the attention of customers looking for integrated international transportation management solutions.
Sources: A&A Primary Research, http://www.apexglobe.com/