Despite the impact of the international financial crisis, in 2009 Jiangmen city in Guangdong still achieved a value-added output of 70.075 billion yuan in industries above designated size, an increase of 12.3% year-on-year. Considering the total industrial output exceeding 300 billion yuan in Jiangmen, the scale of its industry is already quite considerable and the industry is at a stage of rapid development. However, when measured by the maturity level of the entire logistics industry and the seamless connection between manufacturing and logistics industries, domestic logistics, especially third-party logistics, are still at the initial stage. Many logistics enterprises in our city are still limited to traditional transportation services, far from reaching the service standards of modern logistics.
The high logistics costs have become increasingly a factor that constrains the improvement of social economic efficiency during the process of economic transformation, highlighting the shortcoming effect, while also indicating the great potential for reducing these costs.
Strengthening informatization and transitioning towards modern logistics are key steps. Although strictly speaking, among Jiangmen's domestic logistics enterprises, only a few can be considered third-party logistics enterprises; despite many unsatisfactory aspects in the logistics process, Jiangmen’s logistics enterprises are undergoing changes.
Speaking of Jiangmen logistics enterprises transforming into modern logistics enterprises, Jiangmen Jianshunda Logistics Co., Ltd. is one of the more representative companies. This is a company that specifically provides logistics transportation services for the motorcycle industry in Jiangmen. One of the main markers of modern logistics enterprises is the extensive and deep use of logistics information systems within the enterprise, which is also the standard for distinguishing whether an enterprise is a modern logistics enterprise. To improve the level of logistics services and management, Jianshunda invested over 1 million yuan since 2003 to establish a 3PL logistics management system (LIS) that integrates capital flow, information flow, business flow, and logistics for collaborative operations.
"Through the system, customers no longer passively obtain information but automatically follow the entire logistics transportation process via the network, fully grasp the dynamic situation of logistics, and provide effective decision support for sales," pointed out Li Yan, a senior logistics expert at Wanlida Group. At the same time, customers can directly query the settlement status belonging to their own unit, including the dynamic status of all freight charges.
For a traditional logistics enterprise to transition into a modern logistics enterprise, besides achieving informatization, it must also have modern management models and a diversified talent pool with modern logistics concepts. "Only if these three conditions are met, and they can provide comprehensive services such as transportation, warehousing, distribution, packaging, information processing, circulation processing, and moving, do we consider it a modern logistics enterprise," said Zhou Guobao, deputy general manager of Jianshunda Logistics.
Unlike the large-scale logistics enterprises in Jiangmen that are accelerating informatization construction, some small-scale logistics enterprises in Jiangmen have their own views on informatization. "Large enterprises should build their own informatization systems, but for small enterprises, asking us to launch an informatization system is a bit overwhelming. We need a public platform," said Yang Guozheng, general manager of Guoshun Transportation Co., Ltd. in Xinhui District, representing the views of some small and medium-sized logistics enterprises.
In response, relevant officials of the Jiangmen Logistics Industry Association told reporters that building an informatized public service platform using the association as a platform has been included in the work plan.
Growth through competition: Over 3,000 enterprises require major integration. According to relevant data statistics, there are currently more than 3,000 various types of logistics enterprises in Jiangmen, but only 26 enterprises are of scale.
Zhao Qianbin, deputy director of the Economics and Management Department of Jiangmen Vocational Technology College, who has studied the logistics industry in Jiangmen, believes that although there are many logistics enterprises in Jiangmen, they are small in scale, have many but low-level logistics functions, have excellent regional advantages as the western core of the Pearl River Delta, but limited radiation range, lack cooperation between enterprises, and cannot meet the needs of economic development and self-development. He believes that the logistics industry in Jiangmen especially needs to integrate resources, stand on the combination between enterprises, take the path of specialization and combination, and improve the logistics service system.
Zhao Qianbin's view has been recognized by many logistics executives in Jiangmen. "Among the existing more than 3,000 logistics enterprises, many are small in scale, which is not conducive to Jiangmen's efforts to create an advanced manufacturing base in the Pearl River Delta. Perhaps they should be integrated into 2,000 or 1,000 enterprises, cultivating a group of large-scale, high-level enterprises," Zhou Guobao believes.
Li Xiangxian, chairman of Derun Enterprise (Group) Co., Ltd., whose Derun Logistics Center has invested over 120 million yuan and belongs to a large multi-functional third-party logistics base, believes: "Local enterprises have limited strength, we need to introduce more powerful large logistics enterprises domestically and internationally, which is beneficial not only for the development of Jiangmen's logistics industry but also for communication between Jiangmen's entire logistics industry and international/domestic sectors."
What kind of integration will this be, and can it significantly reduce logistics costs?
Reporters learned that with further economic development, some large logistics enterprises will develop into fourth-party logistics. These enterprises have perfect management, strong capital, rich experience, and a large number of big customer orders. At this point, after receiving large customer orders, large logistics enterprises will distribute the orders to smaller logistics enterprises such as warehouses and fleets.
Promoting new concepts: encouraging more small and medium-sized enterprises to choose third-party logistics
Under the traditional logistics model, procurement, manufacturing, transportation, warehousing, agency, distribution, sales, and other links are fragmented, causing, on the one hand, excessive inventory of raw materials and finished products for production enterprises, too much capital tied up, and rising product production costs; on the other hand, insufficient effective cargo sources for transportation and warehousing enterprises, underutilized existing facilities, and increased costs due to poor connections in the transportation link. With the development of the market economy and the rise of the logistics industry, the logistics link as a third source of profit will receive increasing attention from manufacturing enterprises.
As one of the earliest promoters of third-party logistics in Jiangmen, Shi Weijian, chairman of Tongying Logistics Industry Co., Ltd., believes that the benefits of introducing professional third-party logistics enterprises to participate in production logistics are obvious: it allows enterprises to free themselves from non-core businesses and focus on R&D and sales; it can transfer risks for manufacturers; it can improve production efficiency and save costs...
However, in actual operation, apart from some large industrial enterprises, many small and medium-sized enterprises have not yet introduced third-party logistics. How can we make SMEs interested in third-party logistics?
Shi Weijian stated that for manufacturing enterprises choosing logistics enterprises, the key lies in two points: first, cost assurance is cheap; second, product quality is guaranteed. These two requirements necessitate that the logistics industry continuously learn and gradually adapt to the high-intensity requirements of manufacturing.
Li Yan believes that logistics enterprises need to make manufacturing enterprises accept the concept of third-party logistics. Some small and medium-sized enterprises still adhere to the traditional model, do not understand the concepts and models proposed by modern logistics enterprises, and distrust logistics enterprises.
"Unlike large enterprises, small enterprises have small cargo volumes, causing their logistics costs to be higher," Li Xiangxian analyzed. For example, in the motorcycle industry, large motorcycle enterprises have obvious advantages in logistics, but some just-started, small-scale enterprises have high costs. What to do? They need to rely on third-party logistics and collaborate on resource sharing and freight reduction through informatization systems and the newly established municipal logistics industry association.
Jiangmen Anjie Logistics Co., Ltd. started pilot circular logistics from June last year and launched reciprocal flows between Changzhou and Jiangmen in November. General Manager Zhang Yan said: "Using circular logistics can shorten the capital chain of manufacturing enterprises, reduce manpower and warehouse area. In recent years, we mainly accumulate experience and then promote it to more manufacturing enterprises."
Third-party logistics refers to the way in which production and operation enterprises concentrate on their main business by contracting out what was originally their own logistics activities to professional logistics service enterprises through contracts, while maintaining close contact with logistics enterprises through information systems to achieve full management control of logistics.