Home  Contact Us
  Follow Us On:
Advertising Advertising Free Newsletter Free E-Newsletter
      2024       2023       2022       2021       2020       2019       2018       2017       2016       2015       2014       2013       2012       2011       2010       2009       2008

DIALOGUE: A Critical Crossroad, What Lies Ahead For The Chinese Logistics Industry? Dialogue with Martin Winchell, Managing Director of Schneider Logistics and Chairman of the American Chambers of Commerce, Tianjin
Share to

A Critical Crossroad

What Lies Ahead For The Chinese Logistics Industry?

Dialogue with Martin Winchell, Managing Director of Schneider Logistics and Chairman of the American Chambers of Commerce, Tianjin

By Michelle Port

BT 201604 050 20 Dialogue 205 Martin Winchell2

As the logistics industry in China continues to expand and mature, the market is currently at a critical crossroads which will dictate the direction and future of the industry. What is needed to allow it to further flourish in the future? This month, we received the expertise and insights of Martin Winchell, Managing Director of Schneider Logistics and Chairman of the American Chambers of Commerce, Tianjin about the current state of the industry and what lies ahead.

Could you give us a brief introduction to yourself and how you ended up in your current position as Managing Director of Schneider Logistics?

I have been with the Schneider organization since 2001. I was initially based at our corporate headquarters in Green Bay, Wisconsin; spending 4 years working in various roles. One of those roles was to help develop our international expansion strategy. In 2005, we decided to expand to China. "If you believe in the strategy, you are going to China to implement it" was how the offer was presented to take my current role.

You were responsible for the entry of a major logistics organization into the Chinese market. This could not have been an easy task. As a Managing Director, what has been the secret to your success?

I moved to Shanghai in 2005 with the belief that I knew a lot about China. Luckily, we had a broad network of advisors, partners, and suppliers that showed me how little I really knew. Our status as a privately held company also allowed us to be more patient and adaptable. After our initial strategy proved to miss the target on what our customers really wanted, we quickly adjusted to build a ground transportation based logistics company. We also developed as a localized company. While borrowing from our long history, we used a mix of local management, technology, and operating practices for a standalone solution built for China.

Some of the core aims of Schneider Logistics include delivering strategic business value from supply chains and operating with precision and efficiency. How does the organization ensure these aims are delivered to its customers?

Throughout history, all great societies had transportation as a competitive advantage. The movement of people and/or goods was required for development and commerce. Look at the changes in China over that past 10 years with high speed rail and improved air network; it has forever changed people lives. The same is true if you apply it to cargo movement. While China is still under-developed in this sector, we are at a critical inflection point. Further improvements are needed across the supply chain to ensure that domestic consumption truly takes over as the key driver in economy. We work to partner with our clients to ensure they have competitive products that meet the consumer's needs.

What makes Schneider Logistics unique from other foreign multinational logistics companies working in China?

Firstly, we are one of a handful of logistics companies that focus solely on the China's domestic market. We do very limited international logistics. Secondly, we are set up to only serve China with a specific solution built for the challenges of China, which gives a clear focus and niche that is not filled by other foreign companies.

BT 201604 050 18 Dialogue 123 Martin WinchellFor many businesses, both foreign and domestic, pollution and air quality in China is highlighted as a key concern for workers and impacts on the appeal of investing here. How does Schneider Logistics work to address issues such as air quality and carbon emissions in its logistics operations?

The logistics industry is a highly competitive industry with fuel as a major cost factor. We simply must be efficient with our operations or we cannot survive. We are experimenting with alternative fuel vehicles while also developing greener options such as rail or intermodal. Emission standards are developing rapidly and reaching the international standards. The largest challenge will be to deal with congestion which causes idle time and increased emissions.

What issues must the industry overcome to improve the growing logistics sector to help it to flourish in China?

The biggest issues remain with lack of standards and enforcement of regulations. It is true that the Chinese market is fragmented but that is true over all large domestic markets like the United States or Europe. A more structured industry would allow larger players to emerge with common set of standards that would drive efficiency for cargo shippers and consumers alike.

In recent years, the logistics industry in China has diversified beyond domestic Chinese companies, with many companies from overseas looking to establish themselves as market players too. What is the future of the logistics industry in China?

We mainly participate in the domestic sector of the market. This portion is still dominated by Chinese firms, both state-owned and private companies. It will be interesting to watch as "one belt, one road" and related initiatives take hold, to see if more Chinese companies expand or more cross-border mergers occur. Given the less then healthy industry in China, consolidation should pick up the pace in the coming years.

Tianjin has ambitions to be a key economic hub in Northern China. With initiatives such as the Tianjin Free Trade Zone and other plans to further develop the city, what role do you see the logistics sector playing in helping Tianjin realizing this goal?

We have been headquartered in Tianjin since 2006. We have strong belief in Tianjin as a regional logistics hub. The integration of Beijing-Tianjin-Hebei should be seen as a great opportunity for Tianjin to further develop key industries including the logistics sector.

BT 201604 050 16 Dialogue

Large cities like Tianjin, Beijing, Shanghai, Guangzhou and Shenzhen are recognized as well established logistics centers in China. What are your thoughts on recent trends for logistics companies moving and establishing operations away from these centers?

Clearly the maturing of these cities is changing the landscape of the industry. The costs to operate and the inability due to land or traffic restrictions to operate are causing companies to seek lower cost centers. The development of infrastructure, less of a migrant workforce, and fast growing 3rd or 4th tier cities are leading more companies to expand distribution networks. Furthermore, E-commerce is reaching more and more people in smaller and smaller cities creating both challenges and opportunities for logistics companies.

You are also the Chairman of the Tianjin Chapter of the American Chambers of Commerce. Could you give us a brief overview of what the Chambers does and the services it provides its members?

I have been a member of the American Chamber of Commerce dating back to my arrival in Shanghai in 2005. The American Chamber advocates, on behalf of its members, the key issues to the central and local governments in China as well as the U.S. government. Most importantly it provides a platform for member companies to acquire information, get training and to network with like-minded executives.

AmCham Tianjin hosts several key events throughout the year including: a Business Climate Survey, an Annual "white paper" addressing range of issues faced by members, a 4th of July Charity Golf Tournament and a monthly executive breakfast series. Coming in May is our Annual Appreciation Dinner for the Tianjin Government.

What does your role as Chairman entail and how has the expertise you have developed in the logistics industry helped you to lead this organization in Tianjin?

My job as chairman is to help lead the executive committee in its support of our staff and members. Schneider Logistics has offices in 25 cities in China but we are headquartered in Tianjin. This is a unique situation allowing me to sell Tianjin while travelling around China. At the same time, I bring a broader perspective to members in Tianjin. My work with our company's government affairs team in China is particularly helpful.

BT 201604 050 17 Dialogue

You have been working in China for over 10 years. What are the main changes you have seen and experienced over this time?

Some of the earliest advice I received was that; "the longer you are in China the more confusing it becomes to manage". I can testify to the reality of that. While the development in China has been unprecedented, it has led to more difficult challenges to solve. The ability to be adaptable and flexible in your business model is even more relevant than 10 years ago. In some ways it was easier as China cruised along with 10%+ GDP growth. With the "new normal" settling in, we are all going to find tougher competition for less growth opportunities. Innovation and efficiency will no longer be buzz words but will be survival tactics. China still holds a great deal of promise for those companies capable of navigating the rapid pace of change. Then again, maybe the pace of change is not different just the landscape is forever different.


    Subscription    |     Advertising    |     Contact Us    |
Address: Magnetic Plaza, Building A4, 6th Floor, Binshui Xi Dao.
Nankai District. 300381 TIANJIN. PR CHINA
Tel: +86 22 23917700
E-mail: webmaster@businesstianjin.com
Copyright 2024 BusinessTianjin.com. All rights reserved.