Zhejiang Lutong Logistics Co., Ltd.
Taizhou, China Site Visit
June 21, 2012
Mr. Liu Huicang, General Manager
Mr. Liang Jinming, Assistant General Manager
Zhejiang Lutong Logistics Co., Ltd. was founded in 2003 specializing in city to city truckload (TL) transportation. It is based in Taizhou, a city along the eastern coast of the Zhejiang province, in Yuhuan County. Yuhuan is not a big county in Zhejiang, but it has many local manufacturers and a great demand for logistics services.
Before 2003, there weren’t any qualified logistics service providers as most of them were small logistics companies. Mr. Liu Huicang, the founder of Lutong Logistics, asked 38 small logistics companies to combine as a joint-venture company. The new company has 300 trucks and operates more than 40 lanes for TL transportation. In 2010, it generated $60 million in gross revenue and its cargo volume was about 1 million tons.
Lutong Logistics has its own 18,000 square meter logistics park with a 5,000 square meter warehouse for less-than-truckload (LTL) shipments. The goods are picked up from the shipper and stored at the warehouse by final destination. Then the goods are shipped by TL for final delivery. The main destinations are Shanghai, Jiangsu, Guangdong and other cities in Zhejiang. The cargo from Yuhuan to these destinations comes from Lutong’s own customers. Lutong Logistics does not handle a lot of return cargo because it does not have a strong sales force at the destinations. It has to sell most of the return space to local logistics companies in order to balance the cost of returns.
In 2009, Lutong Logistics built its own Cargo Information Center, which helps in shipment planning and space control in managing both TL and LTL shipments. It is now easy for truck drivers to see information including cargo volume per destination and cargo details per shipment.
In 2010, Lutong Logistics built another logistics park for a bonded warehouse and a direct ocean line open between Taizhou and Taiwan. There are over 80 logistics companies joined in this logistics park including some Taiwanese logistics companies.
Lutong Logistics is a key, growing logistics company in Taizhou. It needs to set up a good network and sales team in China in order to be a competitive logistics provider.
Sources: A&A Primary Research, http://www.zjltwl.com/