Suzhoushi Dapeng Wuyun Co., Ltd.
Suzhou, China Site Visit
February 6, 2015
Mr. Duan Futang, Director – Operations
Suzhoushi Dapeng Wuyun Co., Ltd. (SZDP Logistics) is a local logistics service provider of the Jiangsu province. Its headquarters is located in Suzhou, with branch offices located in Wuxi, Nanjing, Huaian, Nantong and Shanghai. The company started in 1999 as a domestic air freight forwarder. Currently, there are around 120 employees working for the company.
SZDP Logistics has domestic air freight forwarding operations in Shanghai and Suzhou. The air freight business makes up 30% of its gross revenue. The company is licensed for international air freight forwarding, but it is still in early development.
Other than domestic air freight forwarding, SZDP Logistics provides contract logistics and business-to-consumer (B2C) distribution services. Contract Logistics accounts for 30% of its gross revenue and the B2C business contributes the remaining 40%.
SZDP Logistics has 50 owned trucks and a 50,000 square meter warehouse for its contract logistics operation. The main customers are retail/consumer goods and pharmaceutical companies. SZDP Logistics can handle all the less-than-truckload (LTL) and truckload (TL) shipments which are outbound shipments from Jiangsu to destinations all over China. Although the company doesn’t have owned offices at the destination points, it has over 140 agents for handling at the destination points. Auchan, Gome, Suning and Wyeth are customers. SZDP Logistics also has a 2,500 square meter temperature-controlled warehouse for pharmaceuticals.
In addition, SZDP Logistics is experienced in apparel logistics. It once was LF Logistics’ ground distribution agent in east China for an Adidas and Nike project.
As the e-commerce business is growing very quickly in China, SZDP Logistics set up a team for e-commerce logistics. Since most of the e-commerce business is B2C, the warehousing and distribution network is important. SZDP Logistics has performed well in the Jiangsu province. Yihaodian, Tmall (a member of the Alibaba group), SMJ-CJ home shopping Co., Ltd. (the first home shopping company in China) and Hao24.cn are customers. In 2013, SZDP Logistics was ranked as a top 6 logistics service provider for Tmall. SZDP Logistics was providing distribution to JD.com in the Jiangsu province but JD.com operates its own distribution network now.
For some of the B2C business, the consignees pay in cash to the logistics provider (shipper’s cash collection agent) upon delivery, so it’s important for the reputation of the logistics provider to have good money management. SZDP Logistics has a good reputation and manages this kind of business very well. According to Mr. Duan Futang, the amount of the cash that SZDP Logistics collects from the end consumers is nearly RMB 1 billion. This is a big challenge for a logistic company, and it is a good opportunity for a logistics company to secure more e-commerce logistics business.
A unique service SZDP Logistics provides is documentation storage for banks and insurance companies in Suzhou. Depending on importance, some of the documents need to be stored for five years, some eight years and some need to be stored permanently. SZDP Logistics is professional on this kind of service and has good cooperation with these customers.
SZDP Logistics is not a big player in the market, but it is a key player in Jiangsu and is strong in e-commerce logistics.
Sources: A&A Primary Research, http://www.szzhonghui.net/