Chongqing Quality International Logistics Co., Ltd.

Chongqing, China Site Visit

February, 2014

By

Eric Xiang

Key Personnel:

Mr. Li Xuexing, Vice General Manager

Chongqing Quality International Logistics Co., Ltd. is a fairly new company just established in 2010. It is headquartered in Chongqing, has branch offices in Shenzhen and Chengdu and employs a staff of 120. Its founding business was truckload (TL) transportation and customs brokerage. Quality Logistics is the leading customs broker and logistics service provider for Foxconn in Chongqing.

As its founding business was TL transportation, Quality Logistics operated bonded trucks from Shenzhen/Shanghai to Chongqing to handle Foxconn shipments. Because of heavy competition in the market for TL services, Quality Logistics had to decrease business in Shenzhen and develop customs clearance business and distribution in Chongqing city area.

Its key customer, Foxconn Chongqing. has many suppliers located in Chongqing’s downtown area. They would ship the goods to Foxconn by bonded trucks. Today, Quality Logistics has 30 bonded trucks to handle all the shipments. Since Foxconn requires just-in-time (JIT) service to ensure a smooth production line, Quality Logistics arranges pickup from the suppliers and does the customs clearance to match Foxconn’s requirements. Quality Logistics has good experience in trucking and customs clearance and good communication with both Foxconn and its suppliers trying to provide milk-run service to customers. For example, Foxconn has purchase orders to five suppliers. The order to each supplier is one or two tons of goods. It is expensive for each supplier to arrange for a bonded truck to deliver the goods. So, Quality Logistics picks up all the goods from the five suppliers using one truck and saving on cost. Quality Logistics does the customs clearance for Foxconn as a TL shipment. This service brings value to both Foxconn and its suppliers.

In the Chongqing bonded zone, Quality Logistics has 50 regular trucks and a 14,000 square meter warehouse. This is a vendor-managed inventory (VMI) warehouse for Foxconn and other local customers. Goods are delivered to the customers’ factory within one or two hours according to the customers’ shipping instructions. Quality Logistics has own IT system to meet customers’ demands. For Foxconn shipments, Quality Logistics uses Foxconn’s vendor management system due to limitations for Foxconn to exchange database information with Quality Logistics.

Due to huge cargo volume between Chongqing and Chengdu, two big cities in western China, Quality Logistics operates a trucking service between Chongqing and Chengdu. The shipping frequency is 200 to 300 TLs per month and growing. Quality Logistics will put more focus on this lane.

As a leading customs broker of Foxconn in Chongqing, Quality Logistics handles all the customs clearance on import and export shipments including the shipments handled by other logistics companies. Quality Logistics is doing customs clearance on 12,000-15,000 shipments per month for Foxconn.

The management team of Quality Logistics has had good experience in its sales efforts. They are applying their Foxconn experience to other customers in Chongqing such as HP, Cisco, and ASUS.

Quality Logistics will be a specialist for customs clearance, warehousing, distribution, and bonded trucking in Chongqing. According to Mr. Li Xuexing, the company plans to build a new logistics park in Chongqing. The logistics park will be open to both manufactures and logistics companies. We will follow-up on its opening.