C&D Logistics Group Finds Growth in Domestic China Distribution

Xiamen, China Site Visit

August 18, 2010

By

Eric Xiang

Key Personnel:

Mr. Robin Chen, Manager of Business Management

Mr. Zhang Liling, Warehouse Manager

Founded in 2000 and headquartered in Xiamen, C&D Logistics Group Co., Ltd. has over 500 employees and generated revenues of $375 million in 2009. Its branch offices are located in Fuzhou, Hangzhou, Ningbo, Putian, Qingdao, Quanzhou, Shanghai, Shenzhen, Tianjin and Zhangzhou.

C&D Logistics’ parent company Xiamen C&D Inc. generated 2009 revenues of $6 billion and is involved in real estate development, property leasing and industrial investments in addition to its supply chain operations. It has the capital to financially support importing customers by prepaying for imports before collecting funds from importers. This financial capability has helped C&D Logistics (C&D) in growing its domestic warehousing and distribution business.

C&D’s market focus is on SMEs (small and medium sized enterprises). In Xiamen, C&D is one of the largest third-party logistics providers (3PLs) servicing the wine industry. About seven million bottles of wine are imported into Xiamen annually. According to C&D, the Xiamen branch alone processes around three million bottles of wine annually or around 40% of the total annual wine imports. C&D handles over 200 brands and over 1,000 different types of wine imported from 16 countries. Castel is a major customer. C&D manages a 17,000 square meter warehouse for Castel, which is temperature controlled at 18°C to 22°C. In this warehouse, C&D provides a total packaging service to Castel which includes printing the International Standard Wine Number on each bottle. Less-than-truckload transportation is utilized for outbound distribution of the wine from the Xiamen warehouse.

C&D is also one of the largest 3PLs handling electronic devices in Fujian. It is a lead logistics provider for electronics manufacturer Prima headquartered in Xiamen. It also manages a warehouse for Dell in Xiamen.

With a strong base of warehousing operations in Xiamen, C&D has also been expanding in the Eastern China and Northern China markets. In Shanghai, it manages a 5,000 square meter warehouse in the Shanghai Waigaoqiao Free Trade Zone to handle imports destined to Eastern China including Zhejiang and Jiangsu. Also, it has plans to startup a 100,000 square meter warehouse in the Fengxian District of Shanghai, near the Shanghai Yangshan Port, by the end of 2010.

In Qingdao, C&D’s 7,000 square meter warehouse handles imported rubber products for a major customer from the Qingdao Port. It also has plans to manage a 160,000 square meter warehouse in the Tianjin Free Trade Zone.

C&D’s strength is in domestic warehousing and distribution. It is especially good at handling imports from port terminals to its warehouses and then managing the respective outbound transportation. With its local knowledge and its parent company’s strong financial backing, C&D Logistics has continued to develop business and build long-term customer relationships.

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