Vanocean International Freight Limited
Shenzhen, China Site Visit
January 30, 2014
Mr. Owen Chen, Director, Deputy General Manager
Vanocean International Freight Limited (Vanocean IFL) is an ocean freight forwarder in the South China market and a specialist in handling export containers for appliances and electronics. It’s based in Shenzhen with branch offices in Foshan, Guangzhou, Zhanjiang, Zhongshan, and Shunde of Guangzhou Province. The offices in Nanning and Fangcheng of Guangxi Province are under a new company named C-Ocean International Shipping Co., Ltd. There also is an office in Hong Kong for financial settlement handling. Vanocean IFL has a staff of 80.
Vanocean IFL has an NVOCC (non-vessel operating common carrier) license and contracts with the main ocean carriers in the market. Although Vanocean IFL can handle air freight shipments per customer’s requirements, air freight forwarding is not a key business and it is not Class A licensed.
Its annual cargo volume for FCL (full container load) ocean exports is around 20,000 TEUs (twenty-foot equivalent units). The company also provides LCL (less-than-container load) service handling exports from Shenzhen and Guangzhou to Spain. The LCL cargo is two or three high-cube containers weekly. Agents are used overseas.
Vanocean IFL focuses on the South China market, mainly the provinces of Guangdong and Guangxi. The cargo is mainly destined to North America, Southeast Asia, the Far East, and Europe and is split almost equally based on volume.
Vanocean IFL customer’s are primarily appliance and consumer electronics manufacturers in South China. TCL, Midea, Changhong, Gree, Galanz, and Chigo are some of its customers. Vanocean IFL participates in each customer’s yearly bidding process and acts as their nominated logistics services provider. As these manufacturers perform well in China’s domestic market and the cargo volume is substantial, there are many containers that are shipped from South China factories to East China and North China by domestic ocean lines for cost savings. Vanocean IFL handles many domestic containers providing door-to-door service.
Vanocean IFL gives 30 days credit to each customer. As its customers are reliable manufacturers, payment and cash flow is good even after the economic crisis.
Vanocean IFL has good insurance to cover all shipments handled. It can provide compensation for the cargo value from the cargo insurance company with maximum of US$ 1 million per shipment. This is important for Vanocean IFL to secure business from the top 100 manufacturers in China.
According to Mr. Owen Chen, Vanocean IFL has the ambition to build a strong network. It plans to set up offices in East China and North China in the near future. It’s also interested in setting up offices overseas, but this will rely mostly on customer demand.
Vanocean IFL is a key player in South China and specialized in handling home appliances and electronics. We envision it will expand nicely once the East China and North China networks are established. Since China is has a huge consumer market and the home appliance/electronics industry continues to grow, Vanocean IFL should have plenty of opportunities to attract more business domestically.
Sources: A&A Primary Research, http://www.van-ocean.com/