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Sino-Global – Company to expand global shipping agency business

Over the course of fiscal year 2018, we continued to see progress in building a larger customer base, due to the marriage of Sino-Global’s global shipping and transportation relationships and a growing online logistics network.

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Sino-Global - Company to expand global shipping agency business.
Sino-Global - Company to expand global shipping agency business. Image: Pixabay

Over the course of fiscal year 2018, we continued to see progress in building a larger customer base, due to the marriage of Sino-Global’s global shipping and transportation relationships and a growing online logistics network.

Our business has historically been built around leveraging relationships with large shippers in Asia and helping to serve these clients through a variety of means, including arranging ship’s berthing and sailing, arranging cargo loading and unloading, preparing clearance documents, among providing other services.

Over the past three years, through signing a strategic cooperation agreement with COSCO Beijing, we were able to take advantage of the low container rate to jointly promote bulk cargo container transportation.

COSCO adopted a new way to containerize goods that used to be shipped in bulk (“bulk-to-container”). For the year ended June 30, 2018, we shipped 140 containers totaling 18 tons per container of sulfur from Long Beach, CA in the U.S. to our customers in China.

We are very proud of our accomplishments, as we developed our business model to help connect China and the U.S. in a cost-effective manner. Our investment in expanding our online platform and the relationships we built here in the U.S. will prove to be valuable assets in the coming years. As we enter fiscal year 2019, we expect to pivot our business once again.

FY 2019 Strategy — An Expansion of Our Shipping Agency Business / Partnerships

The Background of Our Agency Business

To fully explain where Sino-Global is going, Chief Executive Officer, Mr. Lei Cao said it is important for our investors and potential shareholders to understand the origins of our company. I originally founded the Company in 2001 to build a local shipping agency business to serve local ports throughout China.

At the time of our initial public offering (“IPO”) in 2008, we had grown this business considerably to serving over 75 ports throughout the country. We had strong customer relationships and decided that the best way to continue growing the business would be to utilize investors’ capital to both grow our agency business and to expand to ports outside of China.

This would allow our company to develop additional relationships and diversify its revenue stream. This was the origin of “Sino-Global.”

We had a strong set of relationships in building our agency business, and in the years that followed our IPO, we were able to develop new methods of simplifying the logistics process for our clients.

We used technology to more efficiently analyze information about prospective shipments provided by our clients and to determine the most economical and efficient transportation solutions. We then leveraged our relationships and scale as a shipping agency to negotiate competitive shipping rates.

The larger Chinese market served as an excellent market for Sino-Global to expand into. It was large (having an estimated value in 2006 of over $1.5 billion), highly fragmented, and we had considerable expertise in serving a long-term customer base. Our IPO allowed our company to both grow within China and to build relationships globally.

However, in 2013 we began to see challenges throughout the market. There were two larger China State-Owned agencies that we knew very well operating in the market, along with over 1,000 individual agencies that we were less familiar with. The number of smaller agencies began to rise considerably, as they were appearing on the market and attempting to win market share with non-sustainable pricing. Instead of competing in such a market, we decided to change our strategy. We developed a three-year strategic plan to transform the Company and expand our focus to the global market, instead of focusing solely on the Chinese market.

Initially, we were very successful in building a U.S.-based revenue model.  However, in mid-2018 we began to explore the possibility of shifting the focus of our shipping agency business once again due to two primary factors:

  • After an examination of global trade policy, we found it to be very challenging to build and expand a relationship/ technology logistics business focused on China/U.S. relations. Current trade dynamics made it more expensive for our shipping carrier clients to cost-effectively move cargo into U.S. ports, and as a result, we saw considerably lower shipping volumes. This included less utilization of our online platform and ultimately led to declining revenues in the latter half of fiscal year 2018.

 

  • The shipping agency industry in China has improved dramatically. The number of shipping agencies overall in the country has decreased, due to both price and the inability of competitors to embrace technology as a resource in serving clients’ needs. We began to see this shift in 2017 and continued to monitor its progress on a quarterly basis while operating our U.S. / China business. We found that agencies are now able to compete based on service and quality, as opposed to just price.

Growth Strategy – Shifting Back into the Agency Business, Now Globally

We determined in mid-2018 to transition back into the shipping agency business. We are still able to provide the same services as before, but now we also have an integrated online logistics platform that allows our company to handle a wider base of customers in both China and other ports throughout the globe.

As we moved back into the market, we saw a very favorable response from our customer base and expect revenues to increase considerably throughout the course of fiscal year 2019. Our competitive advantages include:

  • Having 20-years of experience in the shipping business;
  • Maintaining stable long-term relationships with customers that have tried “lower price” agency businesses, and thus value our unique expertise and ease of their transactions and logistics service when working with us;
  • Being the only China-based shipping agency listed on the NASDAQ in the United States;
  • Being a standing council member of the CASA (China Association of Shipping Agency & Non-Vessel-Operating Common Carriers); and
  • Having an online network that has been tested globally.

We believe that we can provide a full range of high quality services to our clients through our global network of shipping agency entities. We plan to establish our agency network in China, Southeast Asia, and Australia over in the next three years.

We have selected major ports throughout China that we intend to target first and expect to sign new partnership agreements with shippers in the coming weeks/months.

Ancillary Growth Opportunities — Container Trucking Services

In addition to shipping agency expansion, we will seek out additional opportunities for growth as they arise. An example of this is a recent partnership with www.shippingchina.com (“Shipping China”), in which we will leverage their network to expand our container truck services in the U.S. for freight forwarding compartments.

Shipping China is a leading international shipping logistics business platform which was launched in 2003 with about 300,000 contractors and 200,000 mobile users.

We feel that by combining our transportation relationships with the broad reach of Shipping China’s portal we can expand a container trucking network throughout the U.S.

 

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BDP International enters US customs brokerage portfolio

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BDP International enters US customs brokerage portfolio. Image: Pixabay
BDP International enters US customs brokerage portfolio. Image: Pixabay
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BDP International, a leading privately owned global logistics and transportation solutions company has announced the acquisition of DJS International, a Dallas-based customs brokerage and freight forwarding company.

DJS provides customized logistics solutions to a diverse group of more than 800 long-tenured customers across all modes of transportation. As a proven leader in international trade, transportation and customs brokerage services, DJS will readily complement BDP’s diverse portfolio of logistics and global trade management solutions, with trade compliance and inbound logistics as key focus areas.

“The similarities between our two companies are astounding; both built from humble beginnings, family-owned and operated, strong customer relationships, and both expanding in prominence as major global players in the industry,” noted BDP Chairman & CEO, Rich Bolte. “Trade compliance continues to be filled with new complexities and challenges; it’s a major focus area for our customers and therefore it was a natural fit to extend our reach in this area of expertise. We’ve always had a significant presence in the US Gulf region but with DJS we can provide a wider array of specialized and customized solutions for our customers in this new normal world.”

DJS will operate as a subsidiary of BDP, guaranteeing access to BDP’s entire global network and portfolio of services. BDP and its partners will reap the benefits of DJS’s proven position as a leader in trade management. With this new partnership, BDP International and DJS customers can expect a unique service experience backed by a combined century of industry know-how, expertise, and experience.

“Our team at DJS is a family, and we pride ourselves on the notion of delivering service excellence to our customers – we adapt and fit to their ever-changing needs in this complex world,” noted David Meyer, DJS president and chief operating officer. “We wanted to partner with a company who had similar corporate values rooted in delivering service excellence and look forward to working with our 5000 new BDP family members while leveraging BDP’s technology, visibility, and global presence to continue helping our customers streamline and simplify their supply chains.”

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NZ Post plans to invest close to $170 million on infrastructure – starting with a new Wellington ‘super’ depot for parcels

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NZ Post plans to invest close to $170 million on infrastructure - starting with a new Wellington ‘super’ depot for parcels. Image: Flickr/ 70_musclecar_RT+6
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The investment programme begins with construction of a new ‘super depot’ for parcels, in Grenada, Wellington. The programme also includes a new processing centre in Wiri, Auckland, due to open in 2023, and an upgrade to the Southern Operations Centre in Christchurch in 2022.

The Wellington super depot is due to open in 2022. NZ Post plans to invest around $18 million in the latest global technology that will sort and scan parcels at a much faster rate than what we have now.

“We know that customers really want complete visibility of where their parcel is at all times of its journey – and this technology will improve our ability to do this,” says NZ Post Chief Executive, David Walsh. “We’re making this multi million dollar investment to support New Zealand businesses – both growing new businesses as well as major ecommerce giants.

“NZ Post is forecasting significant growth in the amount New Zealanders will buy online in the next decade – this was before the explosion in online shopping during the COVID-19 period. Last year online shopping in New Zealand grew 13% with almost 50% of adult New Zealanders now shopping online, and we are expecting this growth to continue. We’re pleased to be able to invest confidently in our future, to meet the growth in online shopping.

“The depot will have a 10440 square metre processing floor – about the size of a rugby field – with plenty of room for processing New Zealanders’ parcels.

“We are proud to be contributing to the Wellington regional economy over the next two years, with the projects main contractors, Aspec Construction Wellington LTD, expecting to employ around 350 people through 60 sub-contractors on this project,” says Ash Pama, the property owners’ representative.

During the COVID lockdown period, NZ Post received over 3.5 million parcels in the first two weeks of Alert Level 3. It had been planning for this quantity of parcels in 2023.

Supporting our commitment to be carbon neutral from 2030, the Wellington super depot will incorporate a range of environmentally sustainable design features and has also been designed to accommodate a large solar power installation once battery technology makes this a viable option for our operation.

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Port of Long Beach sees cargo increase

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Port of Long Beach sees cargo increase. Port of Long Beach
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Cargo shipments rose at the Port of Long Beach in May as the economic effects of COVID-19 started to subside.

Dockworkers and terminal operators moved 628,205 twenty-foot equivalent units of container cargo last month, a 9.5% increase from May 2019. Imports grew 7.6% to 312,590 TEUs, while exports climbed 11.6% to 134,556 TEUs. Empty containers headed back overseas jumped 11.4% to 181,060 TEUs.

The Port has moved 2,830,855 TEUs during the first five months of 2020, 5.9% down from the same period in 2019.

“Our strong numbers reflect the efforts of our Business Recovery Task Force, which is setting the path for efficient cargo movement and growth,” said Mario Cordero, Executive Director of the Port of Long Beach. “Our focus on operational excellence and world-class customer service will continue as we prioritize our industry-leading infrastructure development projects.”

“We aren’t out of the woods, but this is the gradual growth we have anticipated as the United States starts to rebound from the devastating economic impacts of COVID-19 and the trade war with China,” said Long Beach Harbor Commission President Bonnie Lowenthal.

As part of its recovery efforts, the Port of Long Beach has activated an internal Business Recovery Task Force that works with customers, industry partners, labor and government agencies to ensure terminal and supply chain operations continue without disruption, along with expediting shipments of crucial personal protective equipment.

May marked the first month in 2020 that cargo shipments rose at the nation’s second-busiest port, and followed seven consecutive months of declines attributed to the U.S.-China trade dispute and the COVID-19 epidemic.

Manufacturing in China continues to rebound from the effects of COVID-19, while demand for furniture, digital products and home improvement goods is increasing in the United States.

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