E-Road Logistics Co., Ltd.

Shenzhen, China Site Visit

January 3, 2014

By

Eric Xiang

Key Personnel:

Mr. Zhou Ji, General Manager

Mr. Guo Changqing, General Manager Assistant

Shenzhen-headquartered, E-Road Logistics Co., Ltd., started as a domestic air freight forwarder in 1995. Prior to 1995, E-Road Logistics was a trading company.

Since 1997, E-Road Logistics has been a key agent of Shenzhen Airlines. Most of the cargo is transported from Shenzhen to other cities in China. According to Mr. Guo Changqing, E-Road Logistics focuses on high-tech customers, mainly in the electronics industry. It once ranked in the top three in Shenzhen for domestic air freight.

image002In 2003, E-Road Logistics started its Truck Express service from South China (mainly Shenzhen) to North China (mainly Beijing). Its Truck Express service is provided using Scania G380 and Volvo FH12 heavy trucks. All trucks are GPS equipped and move through the national highway network. Services include door-to-door, port-to-port, offshore arrangement, reverse logistics, proof of delivery, etc. E-Road Logistics offers its air cargo service with LTL (less-than-truckload) rates, which makes its service very competitive in the market. When the SARS (Severe Acute Respiratory Syndrome) outbreak took place in China in 2003, many flights were

cancelled and air cargo space was limited. The crisis provided the opportunity for E-Road Logistics to introduce its Truck Express service, which has grown steadily over the past 10 years.

E-Road Logistics has four RDCs (regional distribution centers) located in Shenzhen, Beijing, Chengdu and Shanghai with more than 200,000 square meters of warehouse space. It will also operate three additional RDCs. One in Wuhan for Central China, one in Xi’an for Northwest China and one in Shenyang for Northeast China. There are currently about 200 trucks running the routes among the RDCs, most providing direct service. Of course the trucks can make a few stops if the cargo volume is large enough per stop; however, only four stops or less is accepted to meet the required transit times. In each RDC, E-Road Logistics has its own trucks to arrange distribution. Today, domestic air freight is about 10% of its gross revenue with its trucking business being its main service offering.

E-Road Logistics has made a good investment in its information systems. It purchased the Kingdee ERP (enterprise resource planning) system and it has its E3 System for logistics support. The system provides real-time track and trace for all shipments and can dispatch the job to the driver through SMS (text messaging) and send an arrival notice and proof of delivery feedback to the customers automatically.

Key high-tech customers of E-Road Logistics include Lenovo, Huawei and ZTE. Haier and HKC are some of its appliance customers. Mindray and Neptunus are a couple of its medical equipment/pharma customers.

E-Road Logistics’ top management team has good experience in investment management. Shanghai Zhongchengxin Investment Co., Ltd. became an investor in 2006. Shanghai Zhongchengxin Investment Co., Ltd. is Moody’s (a well-known U.S. credit rating company) partner in China. E-Road Logistics has a good reputation in the China market.

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