Expanding E-Commerce Business Boosts Apex Logistics to the 21st Largest Global Air Freight Forwarder
Compton, CA USA Site Visit
April 18, 2017
By
Evan Armstrong

Key Personnel:
Ken Au – President, Americas
Michael Piza – Senior Vice President Sales and Marketing, Americas
Stella Qian – Executive Vice President Finance, Americas
Jackie Chen – Assistant to the Managing Director

Apex Logistics International Overview
2016 was a very good year for Chinese headquartered Apex Logistics International (Apex Logistics). Fueled by rapid growth with e-commerce customers, Apex Logistics’ air freight forwarding business posted a 39% year-over-year increase to 260,000 air freight metric tons making it the 21st largest global air freight forwarder. Apex Logistics’ fastest growing operations were Amsterdam, Netherlands with 261% year-over-year growth, Hong Kong at 76%, and Chicago with 53% growth.

Apex Logistics has grown rapidly since its founding in 2001 with its core business as an air freight wholesaler. It then quickly increased its service offering expanding into retail air freight forwarding and value-added international transportation management solutions. Since then it has built an operating network with over 2,000 employees serving customers in 70 countries. Apex Logistics’ gross revenue topped $690 million in 2016. Further expanding its service offering, Apex Logistics grew ocean freight forwarding volumes to 30,000 TEUs (trailer equivalent units) in 2016 and is targeting 50,000 TEUs in 2017.

In addition to working with the largest internet retailer, Apex Logistics serves a cadre of Fortune 500 companies. Its target industry segments include E-Commerce, High-Tech, Fashion & Garments, Automotive, Consumer & Pharmaceutical, and Industrial. Key customers include: Apple, Hewlett-Packard Company, ASUSTeK Computer, Motorola/Lenovo, Incipio Technologies, AT&T, Jones New York, Barnes & Noble, and Abercrombie & Fitch. As part of its e-commerce offering, Apex Logistics is working with customers using both Alibaba and JD.com platforms.

Apex Logistics’ global network has 16 stations in China, seven in the United States, three in Mexico, and one in Canada, Europe, Korea, and Singapore respectively. In addition, Apex Logistics has near-term expansion plans to add stations in Vietnam, Austria and Germany. Most stations have attached warehousing/cross docking operations in combination with freight forwarding office space. Its total warehousing footprint is 406,000 square feet and includes a mix of bonded and non-bonded facilities.

Apex is an integrated third-party logistics provider with a core service offering including air and ocean freight forwarding, cross border e-commerce solutions, domestic transportation management, customs brokerage, consolidation/deconsolidation, buyer’s consolidation, warehousing, air charter business, and supply chain consulting/trade compliance training. It 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. For ocean freight forwarding, it partners with multiple ocean carriers including: China Shipping, CMA CGM, COSCO, Evergreen, 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 drawbacks, bonds, harmonized tariff classifications, and line reviews.

In June 2015, Apex received an $80 million 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.

Greater China Operations Overview
In Greater China, Apex Logistics has a staff of over 1,200 based in 16 stations including Beijing, Tianjin, Qingdao, Chongqing, Chengdu, Zhengzhou, Wuhan, Hangzhou, Shanghai, Nanjing, Ningbo, Shenzhen, Guangzhou, Xiamen, Hong Kong and Taiwan. Its Greater China warehousing footprint is 21,800 square meters and its operations handle 210,000 metric tons of air freight annually. Apex Logistics utilizes Beijing, Guangzhou, Hong Kong, Shanghai, and Zhengzhou as its major air freight gateways in China. Each gateway airport has its own set of operating rules which Apex must adhere to.

U.S. Overview
Apex established its Los Angeles, California U.S. corporate headquarters in 2003 to support wholesale customers’ air imports from Asia. Today, the U.S. represents over 40% of Apex Logistics’ revenues. Its network comprises seven stations with over 500 employees. U.S. business is centered around retail air freight forwarding customers and cross border (Asia/U.S.) e-commerce business. The Apex Logistics U.S. operations have a combined warehousing footprint of 108,000 square feet.

Of the seven U.S. operations, Los Angeles, Chicago and New York are the largest. Each have staffs of just over 50 people and 35,000 square feet of warehousing space.

Apex Logistics International Operational Summary
Expanding cross border e-commerce business is driving significant growth at Apex Logistics. It has developed solid processes for handling B2C (business-to-consumer) retail air freight between Asia, Europe, and the U.S. In addition, it has been developing business with its traditional retail and high-tech customer base. The formula seems to be working and is driving solid growth. It will be interesting to see where Apex Logistics lands on the top freight forwarder list in 2017.

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