Overview of Hong Kong Warehousing and Logistics with Danny Sung

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Hope everyone is having a fantastic day and ready to learn more about Hong Kong business! Episode 41 today and I’m going to start off our show today with a new iTunes review from Roffo in Australia:

“If you’re thinking of basing your business out of Hong Kong but don’t know where to start look no further than Mike’s terrific podcast!

He focuses each show on one aspect of running a business from the region, the perks of doing so (hello SE Asia travel) and debunks the myth that a HK based company is just for big international corporations. He also feats special guests who draw upon their real world experience.

There are too few good resources for starting a business from Asia, so finding Mike’s podcast has been a gem for me. Highly recommended”

Thanks so much there Roffo,

I know many people have been asking me for episodes on Hong Kong warehousing and logistics, and after some outreach I found Danny Sung from Oriental Logistics Limited – I went to visit him and their company’s headquarters in Kwai Chung, Hong Kong.

Many listeners are buying from Chinese factories and exporting – and I know that some have issues consolidating from multiple factories, or have to trust a sourcing agent with all their supplier info. Having a good logistics partner with 3PL services such as the ones at Oriental, so let’s listen up and learn some possibilities for your import and export business.

Also at the end of the show I’ll add some notes Danny gave me after I turned off the mic – and some summary points as well so let’s get started

Topics Covered in this Episode

• • Introduction of Danny Sung and Oriental Logistics Limited
  • Many listeners are buying from Chinese factories, often more than 1, and are confused how to handle consolidation. What is your general suggestion in making decision between shipping separately and consolidating multiple factories orders into 1?
  • I know it may be based on industry and location – let’s say its B2B and they ship to their USA warehouse, but want to keep some pallets in Hong Kong for their Asia based customers, is this feasible?
  • How about for importing into China, is shipping to Hong Kong a practical choice first?
  • Cross border trucking options, this is from China to Hong Kong, or Hong Kong to China? Can you give us some examples?
  • Mainland China warehouse in Shenzhen, Shanghai, and Beijing? listeners are interested in this use case – they can ship their goods from their Chinese factories here? And then to either Hong Kong, or on ocean shipment?
  • I talk to many listeners and they are always overwhelmed with the logistics and warehousing choices. What are some tips you can give us?
  • Can you give some examples of how some clients are using your Hong Kong warehousing solution?
  • How can listeners contact you and your business for your services? And can you share some basic ideas of how your pricing is? I know it depends on the product types and other factors – but if you can share any examples.

People / Companies / Resources Mentioned in this Episode

• 3PL = Third party logistics
• Bonded warehouse – not yet entered into that country’s border (so not taxed yet by customs)
• FMCG = Fast-moving consumer goods
• PRC = People’s Republic of China
• 5.5 MT truck = Van / normal trucks you see on the highway
• 20” or 40” containers = these are used for ocean freight shipments
• Cold room – for medical or items that need to be in a controlled, cooler temperature
• Contacting Danny and Oriental Logistics – go to OrientalLogistics.com (no longer online)

Full Transcript

Thanks Danny for providing the text of your answers for those listeners curious to read it instead or along with the audio.

– Introduction of Danny Sung and OLL
My name is Danny Sung , Deputy General manager for operations
Oriental Logistics is a major asset-based, THIRD PARTY LOGISTICS (3PL) service provider in Hong Kong. We are providing one-stop logistics management solutions and contract logistics, tailor-made, with high performance, to todays SUPPLY CHAIN MANAGEMENT requirements.
Oriental Logistics Holdings Company Limited is composed of five prime companies: Oriental Logistics Company Limited (Oriental), Oriental Systems Company Limited (OSC), Oriental Physical Distribution Company Limited (ODL), Oriental Logistics Express Company Limited (OLE) and Oriental Records Management Company Limited (ORM).
Founded in 1997, with its headquarters in Hong Kong and having wholly owned subsidiaries and warehouse and distribution operations in BEIJING, SHANGHAI and GUANGZHOU. Oriental Logistics now reaches into more than 75 cities around the world. Oriental Logistics provides a wide range of logistics services and has expanded into a niche market business providing:
Third Party & Public Warehousing & logistics solutions for the WINE INDUSTRY, FASHION INDUSTRY, for FMCG PRODUCTS, ELECTRONIC COMPONENTS and finished goods, COSMETICS, CHEMICAL LOGISTICS both for General Cargo and for DANGEROUS GOODS.
TRANSPORTATION AND DISTRIBUTION in Hong Kong including Daily Replenishment of merchandise to Retail Outlets
Dangerous Goods haulage and transportation including FCL, and LCL cross border trucking.
VALUE-ADDED SERVICES such as Barcode Labelling, Repacking, Re-labelling, Q.C. Control, Sampling, Purchasing of Materials, Decanting and many others.
Cross-Docking
WEB BASED INVENTORY MANAGEMENT SYSTEMS
Total Logistics Packages
AIR/SEA INTERNATIONAL FREIGHT FORWARDING and FREIGHT CONSOLIDATION for fashion, general cargo and dangerous goods.
Full-range of CUSTOMS BROKERAGE and DOCUMENTATION HANDLING SERVICES
Reefer Shipments for Wine.
Temperature controlled storage for FMCG products and wine.
Or anything related to logistics, we can do it.

– Many listeners are buying from Chinese factories, often more than 1, and are confused how to handle consolidation. What is your general suggestion in making decision between shipping separately and consolidating multiple factories orders into 1?
Well, it is rather difficult and cumbersome to handle consolidation from various cargo from different factories in PRC . This action will involve a lot of doubling works such as cargo in and out different warehouses many times, correct relabeling work etc before consolidating into a full container. Sometimes you may not have a full container load and hence the freight cost is higher. We will suggest them to send all these cargo to the warehouse of an appointed 3PL in HK. We will double check the cargo, VA jobs if necessary, we will get other cargo to fill up a container to save freight cost for them.

– I know it may be based on industry and location – let’s say its B2B and they ship to their USA warehouse, but want to keep some pallets in Hong Kong for their Asia based customers, is this feasible?
Yes, it is workable.
In fact, it is common practice in HK where it is a stepping stone from PRC to outside world particularly USA.
We have customers who ship cargo from PRC to USA via HK so that part of cargo can leave behind for customers in HK or Asia markets.

– How about for importing into China, is shipping to Hong Kong a practical choice first?
It is a good question! Shipping to HK is certainly one of the choices. In fact it is the best choice for new customers who plan to invest in PRC.
Customers can import directly to PRC in theory. BUT BUT it is bureaucratic and that you may spend longer time or extra money to get thing done. Whereas we are here in HK and have an expertise to provide them with a great help at least the Chinese language so that it could be more effective .

– cross border trucking options, this is from China to Hong Kong, or Hong Kong to China? Can you give us some examples?
There are cross border trucks each day back and for PRC. Some are 5.5 MT truck and 20” or 40” containers across the border each day. Cargo will be like garments, chemicals, food , shoes, mobile phones or etc.

– mainland China warehouse in Shenzhen? listeners are interested in this use case – they can ship their goods from their Chinese factories here? And then to either Hong Kong, or on ocean shipment?
As you know that there are two types; one with bonded warehouse and the other non-bonded warehouse. There are many goods stored in bonded warehouse in Shenzhen for tax purpose and biz opportunity either in PRC or HK or other markets.

– I talk to many listeners and they are always overwhelmed with the logistics and warehousing choices. What are some tips you can give us?
One must make a choice whether you would take a new service provider or well established one.
In the latter case, you must look at their track records, their management style, customers portfolio and fleet management.

– Can you give some examples of how some clients are using your Hong Kong warehousing solution?

Clients can use our warehouse as a regional hub, cargo can come in from every where to every where (Worldwide Hub) through our delivery teams on roads , by sea and by air. We also provide VA jobs. For instance, Chinese labeling for one of our chemical customers for PRC market. Cold room for medical parts.

– How can listeners contact you and your business for your services? And can you share some basic ideas of how your pricing is? I know it depends on the product types and other factors – but if you can share any examples.
We are in the technological age. Almost every one has computer.
You simply type in “Oriental Logistics” in search engine, you would find us there.
Concerning pricing, it really depends on cargo types and sizes, stackability, air conditioned room, overlabeling, and etc.
The typical rate for storage nowadays is HK$14 per square feet per month.

Episode Length: 21:33

Hope some listeners got some good insights there – in previous episodes we have heard some businesses who really got crushed choosing the wrong logistics partner – so please do your own due diligence when selecting one – as keeping your products flowing smoothly is one of the most important parts of a trading business!

I asked Danny for those importing into China – can Oriental help classify the item for Chinese customs if it is a new item. Danny said they would have to find another service provider for that. This is something I have been asked a lot too, so I’ll work on getting a guest on the show for this.

I know a few friends don’t import into Hong Kong because the storage costs are higher than mainland China, which is what Danny also said – it is a fact – but, the flexibility of not having to deal with import taxes and other China business mysteries may be worth it. But, on the other hand – as Danny said, there are bonded warehouses in Mainland China where it’s not taxed yet and you can use those facilities there.

I have had my own small warehouse in Shenzhen years ago, and had trucks delivering cargo. Got to be quite a headache though, and many business owners need to decide what is their core competency and where do you want to spend your time.

I have to also disclose, I am not sponsored or paid by Oriental Logistics, I am reaching out to various logistics providers in Hong Kong for the show. I also have not yet done business with them – but after seeing their operations I am very impressed with the operations and am talking to them now about my wife’s e-commerce business of importing European swimwear to China.

Til next week – I am really excited I have recorded about 4 interviews recently now that I am back traveling in Hong Kong – a lot of these more traditional businesses don’t use skype and want to do them in person – but hey – that just makes this more valuable and harder to get for everyone so let’s keep rocking!

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