Hunan Hengbang Logistics Co., Ltd.
Changsha, China Site Visit
March 6, 2015
Mr. Liu Xiaocheng, General Manager
Hunan Hengbang Logistics Co., Ltd. is a key logistics services provider in Hunan province that focuses on both less-than-truckload (LTL) and full-truckload (FTL) shipments. It’s headquartered in Changsha and has over 18 branch offices in Hunan. More than 60% of the branch offices are wholly owned by Hengbang Logistics and rest are joint venture offices or operated by local agents. Besides Hunan, Hengbang Logistics has representative offices in Wuhan of Hubei province, Guangzhou of Guangdong province and Pingxiang of Jiangxi province to cover South China. There are around 2,000 employees working in the company.
Because of its strong network in Hunan, Hengbang Logistics can provide competitive rates for both LTL and FTL shipments. Hengbang Logistics has 20 owned trucks. Most of the business is handled by dedicated trucks via subcontractors.
Hengbang Logistics provides distribution in Hunan for Oppo, a mobile phone products brand in China. A good cargo protection solution is provided by Hengbang Logistics which includes packaging, transportation and insurance. For high-tech products such as personal computers, Hengbang Logistics has had good experience with Xinlan, a computer manufacturer in Shenzhen. All shipments are delivered within a day. In order to cover loss and damage claims, Hengbang Logistics has cargo insurance to cover cargo valued up to RMB 200 million. This helps Hengbang Logistics gain more trust with customers.
There are many large appliance manufacturers in Guangdong, and Hunan is a key area in the South China market. Hengbang Logistics has relationships with some of these manufacturers such as TCL, Midea and Gree Electric Appliances.
Hengbang Logistics operates more than 10,000 square meters of warehouse space, including the Central Distribution Center (CDC) in Changsha. Most of the warehouse space is not for long-term storage, but for terminal operations. Since the cargo is shipped to many destinations, the terminal’s outbound side is separated by destination and lanes. Cross-docking can be done in the CDC.
The cargo volume from Changsha to the destinations is much larger than the return cargo as Hengbang Logistics does not have strong sales efforts in the branch offices. If Hengbang Logistics can increase its sales efforts in the branch offices, it may handle more return cargo and earn better profit margins. Since e-commerce business is growing very rapidly in China, it is easy for Hengbang Logistics to secure more business though its strong Hunan network. In addition, if Hengbang Logistics can create strong networks in the provinces of Guangdong, Hubei and Jiangxi as it has in Hunan, Hengbang Logistics could grow rapidly in South China.
Sources: A&A Primary Research, http://www.56hb.com/