Shelly Lu oversees logistics for a medium-sized Chinese biochemical company that produces some 5,000 tonnes of powder and liquid chemicals each year. “Due to the price-sensitivity of the commodities we manufacture, we ship most of our products by ocean freight,” she explained.
But, as is the case with much of the cargo moving by air, “when our customers cannot forecast product requirements, we use airfreight,” Lu said. At this point Lu said she must either consult a global integrator, or a freight forwarder to get product from the company’s coastal warehouse in China’s Shandong province, to wherever the final destination may be.
But then Lu recalled a customer from a few years ago – a chemical distributor in San Pedro Sula, Honduras, that urgently needed a 150-kilogram shipment of a special protein used in textile manufacturing to soften shirts. Immediately, she jumped on “QQ,” the instant-messaging site on China’s mega-media site, Tencent.com, to search for a solution. Within a few minutes, Lu had quotes from several freight forwarders, all of which were small-scale firms with little recognition outside of their region of operation. Lu chose a forwarder based in Qingdao that specialized in shipping cargo to Central America. The cellulase enzyme she needed was trucked to Beijing, given an export certificate, and then sent via Air China to Los Angeles. From there, the cargo interlined with subsequent flights, and was retrieved by the customer at the airport in San Pedro Sula in just under a week.
For Lu, the use of small forwarders has long been common practice; but as the company handles an increasingly large proportion of its export business through online platforms like Alibaba.com, reliance on small forwarders has begun to diminish. In April, Alibaba.com signed an MoU with Swiss forwarder Kuehne + Nagel to offer its members instant quotes and airfreight bookings. In such a scenario, jumping on QQ and booking through one of China’s “mom and pop forwarders” may no longer be necessary – or even possible.
Shifting freight-booking patterns brought about by e-commerce are indicative of the fundamental changes occurring in the airfreight industry. Kevin Shek, vice president and head of the Asia-Pacific region for Luxembourg-based all-cargo carrier Cargolux, said, “We are seeing a shift from traditional single-type commodity shipments, into consolidated shipments of individual orders.” But not all forwarders are equipped to do such consolidations. With the rise of vast new logistics platforms – like China’s twin e-commerce giants, Alibaba and JC.com – disruption looms.Like This Post