Menlo thrives on China’s logistic challenges
China’s under-developed infrastructure in the interior and western parts of the country, differing trucking licence regulations in various provinces and fragmented distribution channels are some of the serious challenges facing multi-national companies (MNCs) doing business in the Chinese mainland. But for logistics companies like Meno Worldwide, this translates to opportunities as Wong Joon San finds […]
February 1, 2011
China’s under-developed infrastructure in the interior and western parts of the country, differing trucking licence regulations in various provinces and fragmented distribution channels are some of the serious challenges facing multi-national companies (MNCs) doing business in the Chinese mainland. But for logistics companies like Meno Worldwide, this translates to opportunities as Wong Joon San finds out. These challenges mean Menlo must find unique solutions for both its domestic Chinese and MNC clients, with most of the solutions provided by Menlo tailor-made to fit the customer’s needs, ranging from simple pick and pack solutions to complex transportation, warehousing and processing services. Varied techniques and supply chain solutions are used or the customer might need just a pure transportation management to localised delivery in some areas. “In China, we serve both local Chinese and MNCs focusing on 110 locations for goods transportation networks, using experienced models. We also use customised models and innovative concepts (similar to that used in the US) to serve and strengthen our customers’relationship in the country,” says Tom Nightingale, chief marketing officer of Menlo. “We work with local companies to manage the networks because of the size of the network needed in Mainland China,” Nightingale says. He points out that when Menlo gets a customer, the process begins with vetting the customer’s entire supply chain through to the procurement. “We take a good look at the vendors and reduce their numbers, improve the quality with carriers and fine-tune the ongoing processes.” “We try to get as close to customers as possible and stay close to them so that we can provide them the necessary strong local knowledge, delivery customer solutions at the local level as well as competitive pricing points,” Nightingale says. “Most of our business is by airfreight which is supported by barge and also road freight transportation.” “Our culture is one of assisting MNC customers and prospective customers interested in using logistic zones to reduce their costs and for getting products to various points internationally. Several customers are also going to Chengdu, Xian and other areas to establish their offices in important locations. We can see lots of MNCs heading in that direction,” he says. Nightingale says while the cost of doing business in China is expensive, there are great opportunities there as well. “Menlo is in China for the long term, and the government is doing a great job of promoting its advantages,” he says. “Dell and Hewlett Packard are some of the customers going into those areas as a customer and so are we.” Nightingale says Menlo had seen good growth in China as well as in the Asian region last year. He adds that the company, which had been growing at a rapid pace in the region in the past few years, particularly in the 4PL arena, had a good track record in 2010. Nightingale points out that Menlo has actually two global 4PL teams to take care of customers’4PL needs. “We go in to areas where customers are going and create value for their services and along the whole supply chain by reducing cost operations and landed costs,” he adds. While Menlo does not make heavy investments in its areas of operations, it does, however, invest in people. That is the company’s strategy and it focuses on it for long term returns, and also for building a sustainable business. “China needs solutions to handle local needs and to also provide local solutions, particularly in the area of the environment. One finds green trends in the US and Europe and such green initiatives are introduced at warehouses (in China), such as providing them with green certification. “By putting the smallest possible carbon footprint at warehouses in the US and Europe, customers can ride on this trend and take part of the credit while working with Menlo using these ‘green’ certified warehouses,” Nightingale says. He adds that the greatest challenge in China is keeping pace with growth and the market place.