Realogistics International (Beijing) Co., Ltd.

Beijing, China Site Visit
January, 2014
By
Eric Xiang

Key Personnel:
Mr. Tao Wu, General Manager
Ms. Maggie Qu, Overseas Network Director

Founded in 2006 and headquartered in Beijing, Realogistics International (Beijing) Co., Ltd. is a logistics services provider and freight forwarder with a focus on air freight imports. It has 150 employees. Half of them are located at its Beijing headquarters and the rest work in its Shanghai, Shenzhen, Suzhou, Tianjin, and Hong Kong branch offices.

Why does Realogistics focus on the air freight import business in Beijing?

Because most of the imported cargo is controlled by Chinese stated-owned companies and most of the central government-owned companies are headquartered in Beijing making it is easy for Beijing companies to develop import business. In addition, Beijing is a gateway for air transportation and there is no seaport, so air freight is key for international trading in Beijing. About 60% of the air freight imports Realogistics handles originate in Europe and the rest come from North America. Realogistics has good agent network management experience and currently works with around 300 agents around the world.

Realogistics’ branch offices handle ocean exports. Its annual cargo volume is around 10,000 TEUs (twenty-foot container equivalent units) with 50% destined to the United States, 20% going to Brazil, and the rest going to Europe.

In Shanghai, Realogistics handles air export business to Brazil. The routing is via Miami, so the operations facility in Miami is very important for its air export business to Brazil and other South American destinations.

Realogistics is running a 1,000 square meter warehouse in Beijing as a distribution center and has VMI (vendor-managed inventory) experience. This is about 10% of the business. Realogistics is studying the business-to-consumer (B2C) business. It’s still in the early stages of development, so the gross revenue is very small. In order to expand in distribution and B2C business, Realogistics keeps focused on its IT systems. It has its own IT team of six, a warehouse management system (WMS) and a VMI system.

In Beijing, Realogistics has a sales team of 20. The team focuses on small- and mid-sized companies in the auto parts, medical, oil and gas, and electronics industries. Some of Realogistics’ customers include ABB, Li-Ning, and Lenovo.

Realogistics has a good agent in Brazil, which is the main logistics services provider of Lenovo in Brazil. Required by Lenovo, Realogistics and the agent in Brazil will set up a joint venture company in United States to secure more business from Lenovo. The coming JV company’s target in the U.S. market is $100 million in gross revenue. At the same time, Realogistics is going to set up a new JV company with this agent to develop the export business in Shanghai.

We see Realogistics having good expansion opportunities in the future. To set up new JV companies or develop in the U.S. market, are important investments. Any investor who has interest in logistics, is welcomed by Realogistics.

Copyright © 2022 Armstrong & Associates. All rights reserved.