Expand the Vision and Be Action-Oriented – Guangzhou Zhihong Logistics is Well-Grounded

www.chinatrucks.com: The reporter, notified to interview a local logistics company in Guangzhou - Guangzhou Zhihong Logistics Co., Ltd. (hereinafter referred to as “Zhihong Logistics”),  was impressed deeply by the company when preparing the materials.

On corporate websites, most companies will choose to show in the introduction a series of “achievements” like their successes, honors and so on, while few will showcase their “failure experiences”. But Zhihong Logistics is one of the latter. From the record of “great achievements and serious failures” as well as the information told by colleagues, the reporter strongly felt this is an enterprise with both solid strengths and open gestures. With a series of questions and interesting points, the reporter of www.chinatruck.org visited Mr. Liu Zhiyuan, Founder and President of Zhihong Logistics.

“Never thought of changing to other type of work since getting into the industry 20 years ago”

Liu Zhiyuan studied management in college in Guangzhou. Once graduated, he was recommended by a friend to work in a Sichuan SOE’s office in Guangzhou, and then embarked on the road of logistics by chance. Committed in the industry for more than two decades, Zhihong Logistics has already developed into a team with more than 300 employees as well as a large number of professionals of modern logistics management and supply chain operation. On dedicated lines from Guangdong to Southwest China, Zhihong Logistics has become one of the most trusted companies.

In the course of understanding the development of Zhihong Logistics, Liu told the reporter about the “achievements” and “failures” introduced in the website one after another. The predecessor of Zhihong Logistics was Guangzhou office of Sichuan Chengdu 5th Trucking Firm. The office moved out of Guangzhou in 1992 but Liu stayed there. Accumulating business resources through a few years, Liu established Zhihong Logistics and specialized in transport on dedicated lines from Guangzhou to Sichuan and Chongqing in early days.

After years of development, till 1999, Zhihong Logistics had already grown into certain scale in Guangzhou. However, a large number of business outlets successively set up in East China, Beijing and Tianjin in 2002 became his first “Waterloo” in life as the result of lagging-behind management. This lesson, as well, made him further understand corporate management; in subsequent development process, management level became the prioritized business segment.


The effective implementation of high-end customer project-based mechanism in 2004 brought Zhihong Logistics three years of rapid development till 2006. However, from 2007 to 2008, the company once again suffered investment losses due to business expansion. This business expansion was not as utilitarian as that in 2003, but much more like a strategic investment in the reporter’s eyes. Logistics real estate project construction is a problem faced by every large-scale logistics company; however, the global economic crisis in those days and local government planning made this project abort and the company was blocked in planning implementation.

In 2009, the input into round-trip transport business made Zhihong Logistics rapidly get out of the doldrums and gradually laid a more solid foundation for its strengths on the southwest dedicated lines.

According to Liu himself, “I have never thought of changing to other type of work since getting into the industry 20 years ago.”  Recognized as “business superman” by his colleagues, Liu further proved a logistics practitioner’s determination in subsequent development.

Academics + doers, corporate information-based upgrading shows the style of logistics man

“Informationalization and datamation are the only way for enterprises to develop. Information-based management can provide production and operation with data support and security, as well as better logistical support to customers; in addition, enterprises can find their shortcomings through data information,” Liu set forth his business development concept from a manager’s perspective.

Back in 2010, Zhihong Logistics has started developing ERP system independently, and a modern transportation and information platform was built, which achieved not only operational control but also logistics-financial synchronization. This far-sighted construction highlighted Zhihong Logistics’ planning awareness on the road of corporate development. Further, in 2013, Zhihong Logistics comprehensively upgraded an all-around information-based integrated system including fleet management system, vehicle maintenance system, trailer management system, cargo management system and financing management system, and then a perfect academic model is to work on the dedicated southwest lines.

Along with the birth of this system is better customer service experience. At the beginning of this year, Zhihong Logistics has already begun comprehensive optimization and upgrading of transport capacity. The logistics model, with domestic vehicles for branch distribution in pie-shaped region and Volvo trucks for long-distance freight on dedicated lines, will be further implemented.

Its main line high-end transport product, “Third Day Delivery” (Guangdong – Chengdu/Chongqing) launched in 2011, will be further upgraded; users’ receipt mode will change from daily basis to hourly basis.

While strengthening hardware capabilities, Zhihong Logistics also gets involved in talent training programs. It worked with Chaoshan Business School in 2013 and funded to establish United Asia School of Business Logistics, which became the first domestic educational institution cultivating logistics talents. In the future, United Asia School of Business Logistics will provide 200 professionals for the logistics industry each year, which will not only serve Zhihong Logistics but also be sent to other logistics enterprises.

“In recent years, the logistics industry develops rapidly, but matching logistics professionals are still scarce. The company often suffers bottlenecks in recruitment. This School is different from any previous college; the courses it teaches are actual logistics operation, which are closer to the industry and enterprises, thus it can bring enterprises new vitality and support them in long-term business development. It can also establish a standard norm for the entire industry for the cultivation of logistics talents,” Liu explained the reason for Zhihong Logistics to invest in talent development.

With vision, plan and practice, a pioneer of modern logistics manager is created.

Road to Sichuan is no longer difficult to ride – joining hands with Volvo to create the optimal transport route in the southwest

Zhihong Logistics witnessed the whole development process of China’s truck industry. In 2012, the company introduced Volvo trucks in several batches and set up a fleet division operation center. Supported by advanced vehicle monitoring system, the company also smoothly carried out the drop and pull transport business. The combination of Volvo trucks and advanced operating models such as drop and pull transport greatly improved operational efficiency and saved various operational costs, lifting the company’s performance to a new level.

When asked why they purchase Volvo trucks, Header Wang, who is in charge of Zhihong Logistics’ fleet management, took out a complete set of comparative data.

In terms of operational efficiency, among 56 main line trucks, Volvo trucks can run back and forth on Guangzhou – Chengdu route up to eight times per month on average, but other vehicles can run on Guangzhou – Chongqing route only six times at their best. Even excluding the 500-kilometer distance differences between the two destinations and calculating based on gross margin alone, Volvo trucks are 33% more efficient than other brands.

In terms of spending on fuel, Volvo trucks save 6 liters of oil than domestic trucks per a hundred kilometers. Based on the one-way distance of 1,200 kilometers, in each round-trip, Volvo truck can save 1,200 yuan of fuel cost for the company. For 36 vehicles, each of which runs back and forth eight times each month, the savings will exceed 330,000 yuan.

In terms of maintenance, the frequency of one maintenance per 40,000 kilometers greatly improves vehicle attendance and operational efficiency. With less than 2,000 yuan of maintenance cost each time, Volvo reduces nearly half of the cost compared to that of domestic brands – 1,000 yuan per 10,000 kilometers. Additionally, by using Volvo blue card service agreement, more professional maintenance technicians’ work will make vehicles more reliable and durable.

The simple plus and minus is clear to everyone. Zhihong Logistics is even more aware of that in two years of practice, which further strengthened the company’s cooperation with Volvo trucks on dedicated line transport.

Better service and lower cost bring intuitive benefits; more soft power also adds extraordinary splendor to Zhihong Logistics considerably. Thanks to high duty rate and guaranteed goods supply, the company’s drivers can earn more than 10,000 yuan per month. Therefore, even if the assessment is demanding, there are still a lot of quality drivers willing to become a member of the company. Each vehicle is equipped with two drivers, and each three vehicles are offered a backup driver. Excellent driving resources further add guarantees to the company’s management and development.

From its inception to today’s success, Zhihong Logistics experienced ups and downs for nearly two decades, which, however, laid a solid foundation for the company to step towards success. Mr. Liu Zhiyuan, the soul of Zhihong Logistics, promotes the company to a higher platform with his passion and ambition. Moreover, his experience gained since getting into the industry has tempered his keen insight in the whole market environment as well as his foresight to control the direction of enterprise development. In the future, the pace for Zhihong Logistics to forge ahead is bound to be exceptionally solid and steady.

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