Exclusive Interview | Bo Shijiu: Starting the “Second Rise” on Changjiu Three Business Sector “Troika” (Part 1)
Original Yang Yunfei China Journal of Logistics & Purchasing 2023-11-28 12:55
Dec 1, 2023, 10:45 a.m. EDT
Mr. Bo Shijiu Chairman of the Changjiu Logistics Group
Established in 1992, ChangJiu Logistics (CJL) has dedicated over three decades to serving the automotive industry. Throughout this time, CJL has experienced remarkable growth and played a pivotal role in shaping China’s automobile sector.
Group photo of the 30th anniversary of the establishment of the company
In 2016, Changjiu Logistics made history as the first A-share-listed third-party automotive logistics company in China. As a leader in the industry, CJL has consistently delivered exceptional performance. According to the latest financial report, the company achieved an impressive operating income of 2.858 billion yuan in the first three quarters of 2023, along with a net profit of 89.82 million yuan, marking a staggering nearly 30-fold increase year-on-year.
Changjiu Logistics was successfully listed on the Shanghai Stock Exchange in 2016
Between 2019 and 2022, CJL faced numerous challenges in the market, including the combined pressures of highway control, epidemics, and OEMs’ cost reductions. However, the company successfully navigated these obstacles and continued to thrive despite the circumstances, further solidifying its position as a reliable partner in the ever-evolving landscape of vehicle logistics.
“This year, 2023, the company has experienced a significant increase in net profit, primarily due to the gradual recovery of market vitality.” Recently, Mr. Bo, chairman of Changjiu Logistics, said in an interview with China Logistics & Purchasing Magazine that under the layout of its own railway, sea transport, air transport, and other kinds of capacity, we have seized the windfall of the export of automobile complete vehicles as well as the export of spare parts to push up the substantial profit growth.
Changjiu Logistics Finished Vehicles Warehouse
In the ever-evolving market environment, it takes entrepreneurs with a sharp strategic vision to navigate the right path for enterprise development. This year, in May, Bo Shijiu spearheaded a remarkable strategic upgrade for CJL. The company is determined to uphold its corporate vision of becoming a top-tier service provider in the automotive industry. With a clear focus on three major business segments, “Troika”—vehicle business, international business, and new energy business—Changjiu Logistics is ready to embrace the future with unwavering determination.
This transformation is defined by Bo Shijiu as the “Second Rise” of Changjiu Logitics.
1. Insight into Market Trends
Diversified layout of vehicle logistics business
The boom in the automotive logistics industry is linked to the production and sales of automobiles. According to the National Bureau of Statistics, the value added of the automobile manufacturing industry above scale in 2022 increased by 6.3% over the previous year, higher than the growth rate of value added of the manufacturing industry in the same period by 3.3 percentage points. Also, according to the China Association of Automobile Manufacturers data, in the first three quarters of this year, China’s automobile exports reached 3.388 million, higher than last year’s total exports.
The double rise in production and sales means that the demand for vehicle logistics will also gradually become larger. “China’s auto market is slowly recovering its vigor after being affected by various factors, including the shock of the epidemic and tension in the global supply chain.” Bo Shijiu emphasized that the government’s implementation of various stimulus policies, such as purchase tax reductions and subsidies for new energy vehicles, has greatly contributed to the flourishing development of the automotive industry. This, in turn, has presented immense business prospects for the whole-vehicle logistics sector.
However, both opportunities and challenges exist. According to the International Automobile Manufacturers Association (OICA), since 2021, the automotive logistics market size has declined to the level of 2015, and the competition within the industry has been transformed from incremental market competition to stock market competition, which is characterised by both sides of the equation. This means that the industry has entered a phase of elimination.
In terms of the current competitive landscape of the domestic automotive logistics industry, firstly, there are large automotive manufacturers holding or participating enterprises; secondly, there are third-party automotive logistics enterprises that are independent of automotive manufacturers and have a considerable scale; and lastly, there are numerous small and medium-sized transport enterprises.
In addition, it is worth noting that in the whole car transport industry, although the state implemented GB1589 in 2017 to regulate the size of the road transport coupe and the number of loading units, but with the increasing cost of road transport, the soaring price of fuel, making the whole car logistics road transport costs further increase, in order to be able to increase profits, some unscrupulous companies are desperate to take the risk of lengthening and modifying the vehicle, illegal The circulation of modified vehicles in the market hinders the healthy development of the industry, causes bad money to expel good money, and triggers vicious competition in the transport industry.
Changjiu Logistics Vehicle Yard
“Compared with the automotive supply chain enterprises of the OEM system, the ‘three-party’ attribute of Changjiu Logistics (CJL) is particularly prominent.” Bo Shijiu admitted that based on the attribute of “third party,” the business scale and business categories of LCA are in the leading position in the field of automotive logistics. It is also based on these advantages that CJL is able to take a step ahead of the automotive supply chain enterprises in the system of OEMs in the layout of diversified businesses.
Changjiu Logistics currently covers most of the OEMs in the market, serves more than 60 brands, and has an annual shipping volume of up to 3 million vehicles. It can be said that it is in a leading position in the domestic third-party automotive logistics industry.
Changjiu Logistics carries out international railway transport of finished vehicles projects
“With the rapid development of new energy vehicles and the increasing penetration rate of new energy vehicles, the company is serving more and more new energy and new power brands, and the proportion of new energy vehicles carried is also increasing, which is one of the most obvious changes in the customer structure.” Bo Shijiu further introduced that, in addition to this, CJL has followed the development trend of the new energy industry and made use of its transport qualification for large and dangerous goods to expand the business of large logistics such as wind turbines and blades, as well as the logistics related to dangerous goods such as raw materials for power batteries, and it is expected to gain more customers in the future in the new segmentation field.
