Qingdao Dakai Freight Forwarding Develops a Niche in Domestic China Air Freight
Qingdao, China Site Visit
August 26, 2014
Mr. Li Wenguo, General Manager
Qingdao Dakai Freight Forwarding Overview and Domestic Air Freight Forwarding Capabilities
Established in 2004, Qingdao Dakai Freight Forwarding Co., Ltd. is headquartered near Qingdao airport. With over fifty employees, Qingdao Dakai Freight Forwarding has built a strong domestic air freight forwarding network and manages shipments from the Qingdao airport to over 100 destinations throughout China. It has developed a solid customer base. Hisense, the Qingdao factory for Samsung, is using its domestic air services. STO Express, S.F. Express, Kerry Logistics and other logistics companies are working with Dakai Freight Forwarding for domestic air freight.
Dakai Freight Forwarding holds a Class A domestic air freight forwarding license. The company is the general sales agent for main carriers operating airplanes at the Qingdao Airport. The annual cargo volume handled by Dakai Freight Forwarding is nearly 7,000 tons, making it one of the largest forwarders at Qingdao airport for domestic cargo. For some flights, Dakai Freight Forwarding is the only sales agent – similar to a charter flight operator. For example, all of the freight and cargo space for domestic China flights EU6836, HU7160, ZH9668 outbound from Qingdao airport are exclusively handled by Dakai Freight Forwarding. This requires other logistics companies to book space with Dakai Freight Forwarding for shipments on these flights. While it values all of its customer relationships, Dakai Freight Forwarding is focusing on developing business directly from customers versus logistics providers. Today, over sixty percent of its cargo volume is currently coming directly from customers.
With such a heavy outbound concentration, Dakai Freight Forwarding is working on developing backhaul/return air freight cargo in its lanes. If the company can set up its own offices in destination cities to secure return shipments, it would be a good way for Dakai Freight Forwarding to strengthen its China air freight network.
To support its domestic air freight forwarding operations, Dakai Freight Forwarding has twenty owned trucks for local pick up and delivery, and an 11,000 square foot warehouse for shipment cross docking. It also manages LTL and truckload shipments for customers using contracted carrier capacity. Dakai Freight Forwarding’s LTL and truckload volumes have seen strong growth over the past few years.
Recently Dakai Freight Forwarding became a strategic partner with asset-based transportation provider ANE Logistics. The majority of its LTL and truckload shipments are now being transported by the trucks operated by ANE Logistics, and all the inbound shipments to Qingdao airport and nearby areas inbound from ANE Logistics points are being be handled by Dakai Freight Forwarding, which has a dedicated five truck operation to support ANE Logistics in Qingdao airport area.
In addition to domestic air freight and LTL and truckload transportation management, Dakai Freight Forwarding has experience managing express shipments as a courier in Shandong province. According to Mr. Li Wenguo, he had a company named Yuanzhi Express, which was sold to Hainai Airlines years ago. When we were talking about Yuanzhi Express, it was apparent that Mr. Li Wenguo still has ambition to build a strong network in Shandong province. Of course, if any investor has interest in building a business managing express shipments in Shandong province, Dakai Freight Forwarding is a candidate given Mr. Li Wenguo’s experience in express transportation.
Sources: A&A Primary Research