Riding the waves
When it comes to business infrastructure, the sheer size of China and the opportunities it offers are dazzling; that's why ECU Worldwide China has established a solid footprint in the region
China is the world's largest economy in terms of purchasing power parity; it is also the world's largest exporter of goods and the fastest growing consumer market. Manufacturing, China's crown jewel, contributes around 40% to its GDP and absorbs around 30% of the labour pool. China has good roads a vast railway network, and is home to the largest port economy in the world in terms of cargo volumes handled.
"China and Hong Kong together constitute the biggest LCL export market in the world, shipping over more than 50% of global freight revenue tons to worldwide destinations. Of this, ECU Worldwide China and HK contribute roughly 5% or one million freight revenue tons. Given the size of the opportunity, we see immense potential for ECU Worldwide to further grow our volumes and network in this part of the world," says Mr Wang, head of ECU Worldwide China.
China's geo-economic drive
The potential is huge. Despite an economic slowdown of late, and with the country transitioning to services-led economy, there are still encouraging signs that the government wants to promote logistics and oceanic transportation. Over the years, China has been steadily growing its maritime network with the roll out of large scale geo-economic initiatives.
Go West: The Great Western Development Programme, popularly known as the 'Go West' strategy, was launched in 2000 to regenerate the economy of the country's western region through improved connectivity and transportation, among other sweeping measures.
OBOR: The ambitious 'One Belt One Road' (OBOR) initiative, kicked off in 2015, has two main components - the land-based Silk Road Economic Belt and the sea-route 21st Century Maritime Silk Road. It seeks to better connect China with the rest of Eurasia.
"What's common to these programmes is a strong emphasis on integrating and aligning seaports with the hinterland, and opening up of ports to foreign players even as Chinese shipping companies expand their presence across the world", says Mr Wang.
That's not all. Last year, China's Ministry of Transport issued guidelines for development and modernization of its logistics industry, lowering costs and enhancing efficiency. This includes developing a transportation and logistics services system by 2020, which will support 150 transportation hubs and 3,000 km of railway lines and highways connecting key ports. "Such developments augur well for everyone in logistics and shipping, and particularly for us at ECU Worldwide", says Mr Wang.
What this means for ECU Worldwide
ECU Worldwide China is well-positioned to ride the Chinese growth wave. "The logistics market in China is fragmented, with the top 20 transportation companies accounting for less than 2% share. Our presence in 15 cities with more than 600 employees makes us confident of pioneering LCL exports in the hinterland markets of China", says Mr Wang.
In 2016, China and Hong Kong comprised the lion's share of the APAC LCL export volumes, a super achievement considering ECU Worldwide entered the China market in 1998. "We have strived to offer timely and efficient shipping to our LCL clients. Some of our unique service offerings include dangerous goods handling, household goods handling, customs clearance, warehousing and trucking," explains Mr Wang.
Today, ECU Worldwide China sees over 55% of its business coming from within the Asian market. Europe accounts for 22%, while 8% heads for the USA and Caribbean countries, 8% to the Indian sub-continent, Middle East and African region, and 7% to Latin American countries.
Although the size and potential of the greater China region throws up massive development opportunities for ECU Worldwide, there are concerns as well, such as increases in labour and land costs. "These can be a major challenge for a labour-intensive industry such as ours. We are therefore open to the right opportunities for partnerships and to acquire suitable units that fit into our existing setup," says Mr Wang.
Another factor is that ECU Worldwide has established its presence in the region through a mix of organic growth and acquisitions of local companies. This meant that ECU Worldwide China evolved to be a collection of varied companies, each with a different culture. Unifying these companies' culture, strategy and operating systems under one common entity was a challenge that has now been overcome to present a common face as ECU Worldwide China.
"One of the major successes during the last two years has been the 'One China' project, where we centralised the national pricing, operation and sales management across the company. We developed a common business portal and customer interface - ecuworldwide.cn - that includes microsites such as ecutariff.com, ecumall.cn (a loyalty bonus shopping mall), and e-booking. All of these interface with the three different operations systems across our 13 stations, and offer a standardised online service to clients nationwide. So while in the past, clients had to deal separately with ECU Shanghai, ECU Shenzhen, ECU Ningbo, Ecu Qingdao, etc, today they do business with one company - ECU Worldwide China," says Mr Wang.
ECU Worldwide China has also mapped out a growth plan. "Today, ECU Worldwide has covered most of the coastal areas in mainland China except Xingang, and we will examine opportunities in inland cities in the future," says Mr Wang. The long-term vision is to make ECU WorldwideÂ China the leading LCL NVO in the country and the best integrated global logistics service provider. Powered by the China growth story, ECU Worldwide China is on the right track.
About ECU Worldwide China
- Presence in 15 cities
- Coverage of all major ports in eastern China
- 600 employees
- Accounts for 1 million freight revenue tonnes
- Offers unique services such as dangerous goods handling, household goods handling, customs clearance, warehousing and trucking