The mammoth China market is facing huge distribution problems, because it is fragmented and lacks the necessary IT support and credit systems, while it also faces numerous hurdles due to lack of uniform rules and regulations among various provinces and districts, Eric Laborie, vice president business development at SITC Logistics, says. "SITC Logistics, which is one of the largest Chinese freight forwarders with 14 years experience in the high-tech industry, handles large multi-national corporations’ accounts, supported by its domestic logistics network comprising 32 service centres plus customised distribution centres (DCs) across thecountry," he says.
Through its extensive service network and ability to operate regional distribution centres within or outside its existing facilities, the all-Chineseowned company has been able to help customers deal with various local problems and assist them in improving overall logistics processes, thus reducing their direct costs and adding value totheir business, he adds.
Last year, SITC Logistics handled over 110,000 tonnes of airfreight, which places the company among the top 10 international freight forwarding companies in China, as well as one of the biggest international air forwardersin export terms.
"Complaints of unsatisfactory fulfillment ratio by customers of high-value good industries due to late deliveries and lack of visibility on shipment fl ows from factory to fi nal destination, are among the major challenges driving the demand for quality supply chain management solution providers in China," Laborie says. In addition, the lack of dedicated customer service and international security compliance along the supply chain, are also of great concern to large manufacturers and enterprises, which produce billions of dollars worth of high value products, such as mobile phones, for the global market. Laborie says that SITC Logistics’ ability to address such concerns satisfactorily had earned it a good reputation in the industry for servicing high-end customers, such as top quality electronic parts and components manufacturers in China.
Huge China network
Headquartered in Shanghai, SITC Logistics has today become the fastest growing Chinese 3PL and supply chain management services provider, employing over 2,500 staff, with operations covering more than 400cities throughout the country.
"China’s traditional distribution channel and challenges are still ineffi cient, time-consuming and lack track and trace capabilities," Laborie says, adding that SITC Logistics, through its multi-million dollar investment in a fully Web-based IT platform with optimisation capability and a revolutionary business model, was able to overcome such challenges and obstacles in China.
The rapidly growing solutions provider has been able to achieve remarkable expansion in China, especially in the three major economic areas – the Pearl River Delta (PRD) region, the Yangtze River Delta (YRD) and the Bohai Bay area, SITC Logistics, whose operations are supported by 386,000 square metres depot and about 100,000 square metres of bonded and non-bonded warehouses, can offer a wide range of full-fl edged services including international air/seaforwarding.
The emergence of SITC Logistics is timely as it comes at a time when China has completely opened its logistics market to foreign fi rms in line with its commitments to the World TradeOrganisation (WTO).
China’s logistics forecast
According to a statement made by the China Logistics Association secretary-general Xu Shouzhen, the output of the Chinese logistics market is expected to reach 1.2 trillion yuan (US$147.8 billion) in 2010. "We hope that in fi ve to 10 years, several Chinese logistics companies will develop into large-scale multinationals," Xu said, adding that domestic companies could survive the challenges from foreign companies as long as they can further sharpen their competitive edge, given the promising market in China. In fact, some Chinese logistics companies have started to move abroad to meet their customers’ needs, and some companies have even established overseas branches and representative offi ces, he added. The appearance of SITC Logistics, which fi ts Xu’s description, in China’s transport and logistics scene today is well-timed as the country prepares for two major international events – the 2008 Olympics Games and the 2010 World Expo – which will need tremendouslogistics support.
"SITC Logistics is in a good position versus its rivals, because it has better knowledge of the domestic market, local culture and working style of the people. It also understands the concerns of both the customers and their suppliers," Laborie says.
New survey results
According to a Transport Intelligence survey, domestic Chinese shippers will provide the greatest business potential for integrated logistics services providers who are looking for customers outsourcing their non-core business rather than multinationals, which have been amongst the earliest adopters.
The report – China Logistics 2006 – shows that competition for this business will be fierce as domestic logistics companies are now increasingly seen as a viable alternative to western and Japanese providers. China Customs recently warned that domestic companies and public authorities should be aware that foreign-invested companies dominate China’s overseas 3PLs.
SITC Logistics, which has already shown its prowess in the industry, is well positioned to tap into both the local market as well as the international market as more Chinese companies with assets under 200 million yuan forge ahead to sell their products overseas and multi-national corporations continue to establish their production facilities in China.
Under the guidance of a strong management team combining both western and local domestic market knowledge and expertise, SITC Logistics is on course to become the largest and most profi table logistics management services provider in the country with a strong nation-wide network coverage.
