Hong Kong Tycoon: Starting from Delivering Dongfeng Express

Chapter 154 Dongfeng Shipping
Upon hearing that Dongfeng Express had launched shipping services in the Chaoshan region, Chen Qitong rushed to Portland Street.

Chen Qitong's behavior was understandable, as the transportation of goods has always been a crucial link, especially in this day and age, when transportation from the mainland to Hong Kong Island is inconvenient, making the efficiency and cost of transportation even more prominent.

Upon entering the Dongfeng Express store, Chen Qitong found that business was still booming, with people queuing up.

However, he bypassed the crowd and went directly to the front desk to ask:

"Miss, I'm not sending a package; I'd like to inquire about freight services to Chaoshan!"

"Sir, freight services to Chaoshan are handled over there."

Following the receptionist's directions, Chen Qitong noticed that a new counter had been added in a corner of the store, and there were already several people at the counter.

"Hey, Dongfeng Express really has launched shipping services?"

How are shipping costs calculated?

"Are there really ships shipping there every day?"

Chen Qitong walked to the counter and found that these people were also there to inquire about the newly opened Chaoshan shipping business.

Ahua smiled and raised his hand: "Bosses, don't worry, I'll answer these questions one by one!"
We definitely launched the service before we dared to shout out this slogan!
As for the frequency of freight transport, not only is it carried out every day, but there are three trips a day!

"Three shifts a day! Wow, Manager Liu, Dongfeng Express is really generous!" A boss's eyes lit up immediately upon hearing this.

Currently, shipping routes between Hong Kong Island and Shantou Port are operated by two main companies: large Hong Kong-funded companies like the Bao and Dong families, and mainland state-owned shipping enterprises.

Although mainland state-owned shipping companies have small and medium-sized cargo ships, they currently only accept orders from specific clients, such as bulk cargo transportation of coal and ore, excluding many private and private enterprises. They are relatively conservative.

The large cargo ships belonging to the Bao and Dong families don't operate very frequently; even combined, they only make about two trips every two weeks.

However, they had no choice but to use the ships of the Bao and Dong families, and sometimes they had to wait for half a month.

They usually place their orders half a month in advance, but if something happens at the factory or some products are changed, production is delayed, and the ship can't catch up. They have to go through the process again and book the ship for the next month. This delay can take up a whole month.

But there's no way around it; since we chose the mainland and enjoyed the low cost, we have to endure the hassle of transportation.

But now, Dongfeng Express has actually opened a cargo route with three flights a day. How could these bosses not be pleasantly surprised?

If that's the case, then they won't have to wait so long anymore!

These business owners understand that time is money. If they can launch similar products half a month earlier, that's a business opportunity!
If they can deliver goods to Hong Kong Island quickly, they will be much more flexible in making future plans!
Ahua smiled, then took out a price list and placed it on the counter:
"We charge according to international practice, using the W/M principle, at HK$100 per ton or HK$60 per cubic meter."

The so-called "W/M" principle means that freight charges are calculated based on the gross weight (W) or volume (M) of the goods, with the shipping company choosing the higher of the two.

This didn't surprise anyone, since the W/M principle is a well-established practice.

However, upon hearing the price, Chen Qitong asked:
"Manager Liu, isn't your price a bit too high?"

Bao's global shipping rates are HK$60 per ton or HK$40 per cubic meter.

Or does your shipping fee include loading and unloading costs?

Ahua shook his head:

"Sir, although our fees are a bit higher, there's a reason for it! We're fast and have more frequent shipping routes, which is something that the big ships from other companies can't match!"
As for loading and unloading fees, those are not included; they are only the basic freight cost.

In later times, cargo loading and unloading were largely automated and highly efficient, so many transportation contracts included loading and unloading costs in their freight charges.

However, in 85, it could only be considered a semi-manual, semi-mechanical operation, which still required dock workers. Therefore, the loading and unloading fees had to be listed separately and the buyer had to resolve them themselves.

Upon hearing this, Chen Qitong fell into thought.

Clearly, Dongfeng Express has a significant advantage: more frequent service, with three round-trip services daily, greatly improving convenience. However, the fees are also higher!
Chen Qitong was calculating the production capacity and shipping costs of his own factory. He is just a medium-sized clothing brand in Hong Kong Island. Apart from some overseas OEM orders, his market is mainly Hong Kong Island. The production quantity of each style of clothing is generally between 500 and 5000 pieces, and the most popular style was less than 2 pieces.

If we calculate based on shipping 1 pieces each time, that's about 4-5 tons. Let's say 5 tons. The extra 40 yuan per ton only adds up to 200 yuan in shipping costs!
But the extra 200 dollars saves you the waiting time, so it's a good deal!
However, Chen Qitong did not place an order immediately, but looked at Ahua and asked:

"Manager Liu, if you can really deliver goods three times a day and on time, then I am willing to cooperate with your company!"
However, I had never heard of your company's experience in the shipping industry before. Would you mind showing me around your company?

Seeing that the bosses were all looking at him, Ahua smiled and said, "Since you bosses want to take a tour, I'll make the arrangements right away!"

More than an hour later, at Kwai Chung Pier.

Chen Qitong and several bosses got out of the car, and a middle-aged man of about 40 years old greeted them with a smile. Ahua took the initiative to introduce them:

"Gentlemen, this is Manager Ma from Dongfeng Shipping Company. He will show you around!"

The purpose of calling it a visit was simply to see Dongfeng Shipping's ships and people, which is the real guarantee of its strength in the shipping industry.

Manager Ma led several people to a boat at the dock:
"Gentlemen, please take a look. This is the Haiyan-M type hydrofoil that our company purchased from the Soviet Union at a cost of 200 million US dollars!"

Upon hearing that it was a Soviet-made vessel purchased for $200 million, and seeing the over 30-meter-long boat in front of them, the business owners nodded in relief.

After boarding the ship, Manager Ma introduced the captain to the group: "This is our captain. He has 15 years of experience in maritime transport and is very familiar with the waters near Hong Kong Island. There will be absolutely no problems navigating these near-shore areas!"

The bosses met the captain and about ten crew members, who seemed quite professional.

"Manager Ma, your ship looks a bit different from traditional cargo ships?" one of the bosses asked curiously.

"Yes, traditional cargo ships are specifically designed for transporting goods, but the biggest feature of our hydrofoil is speed!"

One person asked curiously, "Oh? How fast?"

"If we go at full speed, we can reach speeds of 80-100 kilometers per hour!"

Chen Qitong exclaimed in surprise: "Wow! So it would only take two hours to get from Hong Kong Island to Chaoshan?"

This is more than twice as fast as a regular cargo ship!

Manager Ma held up three fingers: "That's right! Our ship can make three round trips between Hong Kong Island and the mainland every day!" The bosses were seeing such a large ship going so fast for the first time, and they all exclaimed that it was indeed a Soviet-made vessel!
However, someone else then realized: "Manager Ma, could it be that your company only has this one ship for the three daily trips you mentioned?"

"That's how it is for now."

The group was taken aback: "I thought your company had at least three ships!"

Ahua then smiled and said, "Don't worry, everyone. Dongfeng Express has earned a great reputation these past few months and we won't do anything to ruin our brand!"

Manager Ma also stated, "Ladies and gentlemen, the safety of our ship is guaranteed! Generally, traditional cargo ships of the same size can carry 200-300 tons of cargo, but our ship will not carry more than 80 tons of cargo per trip! This is to ensure both safety and speed!"

Hydrofoils are not professional cargo ships. However, they are more than twice as fast as cargo ships, have a shallow draft, and therefore their carrying capacity is far less than that of cargo ships.

It's not that we can't transport more, but if we do, we'll have to sacrifice the ship's speed.

Moreover, loading and unloading goods also takes time. With mechanical assistance, 80 tons can be handled within an hour, but it won't work if there are too many.

The ship's main purpose is to deliver packages; we can't let cargo transport delay the delivery.

So after repeated discussions, the cargo capacity was set at 80 tons.

Afterwards, Ahua led everyone to a warehouse: "Gentlemen, this is a warehouse rented by Dongfeng Shipping. Your goods will be loaded and unloaded here, and you can transport them away at any time. Of course, there will be an overtime fee for staying too long!"

None of them disagreed with this point.

After they finished shopping, Ahua drove the bosses back to Dongfeng Express.

None of them left immediately. Instead, they found a teahouse and gathered together to discuss their plans.

"Gentlemen, what do you think of Dongfeng Shipping?"

“I’m tempted by the three daily sailings, but there’s only one ship, and it’s a newly established company with little prior experience in shipping. I’m a little uneasy about it!”

"Yes, that's what I think too. Shipping by sea is not like shipping by land; it's not something just anyone can do!"

"Old Chen, what do you think?"

Chen Qitong, who was drinking tea, put down his teacup: "I'm going to place an order!"

The group looked at him simultaneously: "Oh?"

Chen Qitong said, "Dongfeng Shipping may be small, but it has all the essentials. It has ships, people, and warehouses. They focus their efforts on running this one route, which I think is more reliable!"
And think about it, how many airlines can handle flight routes between Hong Kong Island and the mainland now?
Since Dongfeng Shipping can operate, it must have the capability!

The group exchanged glances and realized that Old Chen's words did make some sense.

"One more thing, think about what Dongfeng Express does?"

Several people said in unison, "Of course, they're deliverymen!"

Chen Qitong laughed and said, "So, what do you think Dongfeng Express will use to deliver their packages now that they've launched their Chaoshan service? Will they still have to go through the Luohu border crossing? They'll definitely be using this ship!"

The group suddenly realized, "So that's it! No wonder they built such a fast ship, even if it meant carrying less cargo, they still made three trips a day!"

"Yes, they actually use this ship for delivering packages; our cargo is just a side job! So, delivery is their main business. For the sake of the Dongfeng Express brand, they definitely care more about this ship than we do!"

Upon hearing this analysis, everyone couldn't help but give him a thumbs up: "Old Chen, you're really sharp! Your reasoning is excellent!"

"I'm relieved to hear that. I'll place my order then!"

"Yes, yes, even for their own sake, Dongfeng Express won't let their guard down; they'll definitely continue operating for the long term. The Soviet ships have experienced veteran crew members; I don't think there'll be any major problems!"

"Well, my factory just has a batch of products ready. I was originally planning to order half a ship from Houbao, but now I'll go with Dongfeng Shipping! If I place the order now and clear customs, it can be delivered as soon as possible!"

"Book early! If Dongfeng Shipping doesn't expand its business and continues to use only one ship, I think everyone will be scrambling to book and won't be able to get a cabin!"

……

That evening, after Dongfeng Express closed, Ahua rushed over to report the good news to Ye Dongsheng:

"Brother Sheng, the newly launched Chaoshan shipping business has already received 32 orders! All the space for Monday is fully booked!"

Ye Dongsheng nodded, then asked, "Are they all shipped from the mainland to Hong Kong?"

Ahua nodded: "Yes, all of them. There are no shipments from Hong Kong to the mainland yet."

Ye Dongsheng was not surprised by this, since these customers were all Hong Kong businessmen who had invested in factories in mainland China, and their orders were definitely shipped from mainland China to Hong Kong Island.

Dongfeng Shipping hasn't built up its brand or reputation yet, so it naturally can't attract other customers.

However, under the current circumstances, there are actually quite a few restrictions on the entry of goods from Hong Kong Island into the mainland. Many goods can only be purchased by state-owned enterprises, and private enterprises are not allowed to sell them.

Therefore, Yip Tung-sing did not have high hopes for the cargo shipping business from Hong Kong Island to the mainland.

Even in the worst-case scenario, if Dongfeng Shipping's business involves one-way transport from the mainland to Hong Kong Island, with three trips a day, the total tonnage would be only 240 tons.

240 tons, at 100 yuan per ton, that's only 24,000 yuan a day!
1天2万4，也许对别人很多，但是放叶东升这里，潮汕地区每封1日达的快递300蚊，2万4千也就是才顶80封快递啊！

Hey, based on the experience of other places, the Chaoshan region probably receives at least 800 express deliveries every day!

That's why Ye Dongsheng said that express delivery is the main business, and shipping is just a side job. Even if the cargo is full, the money earned from shipping is only one-tenth of that from express delivery!

The profit margin is too large!
The reason is actually quite simple. Firstly, he monopolized the express delivery business, resulting in high prices and high profits. Secondly, there is a market price for shipping, so even if he raises prices slightly, it won't be too outrageous.

Secondly, his cargo volume is too low. If he wants to make big money in shipping, he has to go like the Bao and Dong families and ship large ships in large quantities! Otherwise, their ships are all large oil tankers of tens of thousands or even hundreds of thousands of tons.
Therefore, Ye Dongsheng didn't think too much about it. At present, Dongfeng Shipping is really just an auxiliary to Dongfeng Express!

(End of this chapter)