Shanghai Hengrong International Transportation Co., Ltd.
Shanghai, China Site Visit
November 15, 2011
Eric Xiang

Key Personnel:
Mr. Vincent Wong, Vice President

Shanghai Hengrong International Transportation Co., Ltd. (Hengrong) is a China-based, third-party logistics provider (3PL) with headquarters in Shanghai and branch offices in Beijing, Changzhou, Chengdu, Chongqing, Guangzhou, Hangzhou, Hong Kong, Nanjing, Qingdao, Shenzhen, Tianjin, and Wuhan. It has over 400 employees and generated gross revenue of $120 million in 2010.

Hengrong has an NVOCC (non-vessel operating common carrier) license for ocean freight forwarding and a Class A license for airfreight forwarding. With its strong network in China, Hengrong is a key player in airfreight forwarding in Shanghai. It handles around 35,000 metric tons of airfreight exports and 5,000 metric tons of airfreight imports annually. Hengrong operates a 20,000 square meter warehouse near the Shanghai Pudong International Airport for its airfreight operation and a 12,000 square meter CFS (container freight station) warehouse for ocean imports. Hengrong also has 25 trucks in Shanghai for local pick-up and delivery. About 85% of Hengrong’s customers are 3PLs and the rest are direct customers.

Hengrong is the general sales agent for China Airlines, Thai Airways, UPS, etc. Ninety percent of the shipments are destined to Europe and North America.

Hengrong has a solid relationship with China customs. In September 2010, Hengrong started handling the transshipments of airfreight imports from the Chengdu Shuangliu International Airport. For instance, when shipments are destined to Beijing or Wuhan, the freight is shipped to the Chengdu Airport first. Then, Hengrong transports the freight to the Beijing Capital International Airport or Wuhan Tianhe International Airport where customs clearance can be completed by the consignee. This solution is much cheaper than shipping air direct only.

For airfreight exports, Shanghai is the main gateway. Hengrong uses 20 bonded trucks to transport the freight from Chengdu to Shanghai.

Hengrong did not avoid the impact of the economic crisis over the past two years. In 2008, Hengrong’s gross revenue was nearly $170 million. However, according to Vincent Wong, the hard times have pasted and Hengrong had a good history of growth. In order to get capital support for further development, Hengrong is planning an IPO (initial public offering) in China.

Its business in Chengdu should have significant growth, since it is a better solution for both the shipper and consignee. If Hengrong focuses more sales efforts on developing local, direct customers, it will become a more competitive airfreight forwarder and 3PL in China.


Sources: A&A Primary Research

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