Chinese logistics firm Indserve already has an impressive roster of western clients and wants a lot more. To keep up with the growing demand for its hi-tech logistics services, Indserve has just completed a new 2,000 sq metre logistics centre in Shanghai, bringing its total warehouse capacity to 13,000 sq metres.
That's not bad for a company that started business in 2000 with just 3,000 sq metres of warehouse. In 2001, it got ISO 9001 certification and became a certified supplier to Motorola. In the years since it has it obtained ISO 14000 certification and certified supplier status from big-name manufacturers like Siemens, Samsung and ABB.
Headquartered in Beijing, Indserve specialises in logistics and supply chain management, serving both large multinationals and medium-sized telecommunications companies in China.
Indserve's new Shanghai logistics centre is designed to expand its geographic reach and cater to the needs of the growing number of hi-tech OEMs in the Zhejiang-Shanghai corridor.
As well as its own warehouse infrastructure, Indserve can call on a potential warehouse network of 22,000 sq metres in Beijing and outsourced warehouse space in Asia, North America, Europe and Middle East. This is the so-called fourth party logistics (4PL) model in which a logistics provider outsources some of its infrastructure requirements to other 3PL providers.
There is much debate in the logistics industry about the value of 4PLs. The argument goes that a 4PL provider, because it has less infrastructure of its own to worry about, can oversee other logistics providers and better serve the needs of the customer. But the downside is that customers run the risk of losing knowledge of their business as logistics management functions once done in-house shift to the 4PL.
The Shanghai centre is only the first stop in a series of expansion plans Indserve has for the coming months.
One of the most common complaints from western businesses in China concerns the poor state of the country's infrastructure. Outside of the the main economic centres, the logistics sector tends to be of low quality, inefficient and with little technological competence. Indserve shows that there are exceptions to the rule.