Make
no mistake about it, China is still the place everybody
wants to be: it’s home to the world's second largest
economy and is the world's number one exporter.
Often when there is talk
about China’s logistics (in the west, at least),
the conversation will center on international firms,
including leading brand names like FedEx, UPS, DHL,
and others.
Today at 18.6 percent
(or $1.6 trillion annually), China accounts for the
world's biggest logistics action, with growth of over
20 percent in just the past 4 years for a compounded
annual growth rate of 6.69 percent.
We were privileged as
part of our being named as FIATA Fellow last month in
Zurich to sit down with Zhao Huxiang, who serves as
Chairman of SINOTRANS and is also the current President
of FIATA.
If you are not aware of
SINOTRANS, you should be.
The China state-owned
company was founded in 1950. Headquartered in Beijing,
People's Republic of China, it is the largest logistics
company in China.
With more than 50,000
employees and growth into every facet of logistics at
home and around the world, SINOTRANS is a great example
of why the Chinese logistics market is the biggest in
the world.
Not only is the market
huge, but also the infrastructure for supporting logistics
companies is top notch.
SINOTRANS includes air
and sea freight forwarding, shipping, storage, terminal
and supply chain operations, and a menu of services
that match and even exceed those of its international
competitors.
In fact, according to
Armstrong & Associates, a supply chain market research
and consulting firm, SINOTRANS ranks among the top 10
third party logistics providers in the world.
Perhaps more importantly,
SINOTRANS is doing well despite the global economic
downturn.
SINOTRANS’ margins
continue to head straight up, with an estimated net
profit margin of 4.75 percent for 2015, an uptick from
the previous margin of 3.14 percent.
FIATA
Windfall
Kudos to FIATA! The organization
hit 90 years in 2016 and landed SINOTRANS Chairman Mr.
Zhao Huxiang as FIATA President.
How this distinguished
gentleman is able to serve his giant company and also
shoulder the global responsibilities of the Presidency
of FIATA—the largest trade association representing
freight forwarding and logistics firms along with affiliated
national associations in the world—is simply something
at which to marvel. The unique chance to go one-on-one
with the man himself revealed just how he gets everything
done.
We sat in a small, comfortable
room in downtown Zurich as FIATA was meeting in various
sessions.
Just behind our table,
over our shoulders, there was another table of men talking
vigorously and hunched over maps and charts.
I asked Chairman Zhao
who they were, and he smiled and said:
“We (SINOTRANS)
are awaiting the day when we can send railroad trains
full of cargo from China to Europe.
“Our experience
is that the service works quite well; in fact, we started
it up two years ago.
“But because of
the many borders to cross and various regulations, the
service has not been popular.
“For
rail sector, better procedures and transparency can
improve efficiency. And also the sector needs to lower
cost and enhance its competitiveness compared to sea
transport.
“So here in Zurich
with FIATA is the opportunity to work up some ideas
and plans with our partners that will enable top level
meetings—set for this May in Shenzhen—aimed
at eventually establishing a workable rail service between
China and Europe.
“You know, 90 percent
of my business is focused on international trade.
“As China continues
to open up there is much at stake in finding better
ways to work with the rest of the world,” the
Chairman insisted.
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Getting
Ready For Midterm
Actually, Zhao Huxiang
is approaching the mid-term of his two-years as FIATA
President, having been elected into office last September.
He will continue his Presidency
in 2016 during the organization’s milestone 90th
Year Celebration.
“FIATA welcomes
everybody in spirit and cooperation.
“I am not an airfreight
man, but rather someone from a shipping company.
“It might be difficult
to imagine how a Chinese man became President of FIATA,
but the organization is truly international and global
in scope and is well prepared and most importantly in
touch with the world market of today and tomorrow,”
Mr. Zhao said.
“I became involved
with FIATA a decade ago via membership and my eventual
move as Chairman of the Chinese International Freight
Forwarder Association.
“In China today
there are more than 35,000 registered freight forwarding
companies,” Mr. Zhao said.
Goals
and Vision
“I think we can
provide more and better services, clearer guidelines
to better cooperation, and best practices for our membership
and the logistics industry.
“We have people
here at our meetings that came from all over the world
and yes, as far away as China, to meet and try to find
better ways to (for example) handle and guarantee safe
movement of dangerous goods.
“There are very
complex issues and much is at stake here.
“But the FIATA venue
and spirit of détente that prevails amongst our
membership and guests is quite a credit to everyone
here.
“FIATA is dialogue
and cooperation and impartial at its base, and that
affords the opportunity to look into many complex challenges
and find solutions.
“Our solutions and
cooperation connect the world. In the case of China,
these connections are vital to the rest of the world.
“For example, my
company relies on FIATA to provide us the middle ground
to meet and get to know the rest of the world.
“That is why it
is such an honor and pleasure to work with and now be
among the leadership of this great organization,”
Zhao Huxiang said.
Some
Other Place
You spend some time with
FIATA members and realize you are someplace else.
The best way to describe
the atmosphere at their meetings is that they are quite
cordial.
FIATA maintains as close
to a diplomatic atmosphere amongst its members and their
dealings with each other as exists anywhere today.
I recall working on a
start-up newspaper for the United Nations in New York,
prior our move to air cargo.
Having spent some years
reporting daily to the UN Plaza, I instantly recognize
the feeling of genteel, civilized behavior, universal
greetings, and smiling encounters. It’s how FIATA
does business.
Mr. Zhao may be not exactly
typical of many executives (after all, who else is boss
to 50,000 people?) but his warmth, zeal, and absolute
brilliance is mirrored in the faces of the people at
FIATA meetings.
“The 55th FIATA
World Congress takes place in the Convention Center
in Dublin, Ireland, from October 3-8,” Mr. Zhao
said.
“Hosted by The Irish
International Freight Association (IIFA), everyone is
invited to a program that promises an inspiring mix
of engaging speakers and collaboration-based workshops,
exploring new trends in global logistics, best practices,
trading opportunities and technological innovations,”
Mr. Zhao said.
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Geoffrey
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