Werner’s Chinese investment may prove beneficial at home

Werner Global Logistics, a subsidiary of US truckload provider, Werner Enterprises, announced last week that it had invested in China’s Hercules Logistics Co Ltd. headquartered in Shenzhen, China. According to the company, it is one of the largest and fastest growing logistics businesses in China. Hercules provides logistics and transportation services in the areas of long haul and port dray trucking services, forwarding and freight management, contract logistics, integrated supply chain, warehouse distribution and customs brokerage.

Werner entered the Chinese market in 2006 through its subsidiary. It provides international freight forwarding, NVOCC operations, air freight, warehouse management, purchase order and vendor management programs, customs brokerage and domestic Chinese ground transportation services.

Werner’s President and Chief Operating Officer, Derek Leathers said, “throughout the last six years, we have expanded our business relationship and worked closely with Ken Mei, chairman and CEO of Hercules, and his management team. We understand the needs of our customers to better manage their supply chains involving the Asian market, as well as their desire to further expand into China’s growing domestic market.”

Indeed, the combined network of Werner Global Logistics and Hercules will include more than 20 offices, warehouse and logistics centers and a combined network of over 1,000 trucks in China. This is in addition to approximately 7,100 trucks and over 23,000 trailers operating within North America.

But, perhaps Werner will also benefit from this relationship in the US. In 2010, Hercules Logistics and Phoenix, Arizona–based Swan Logistics formed a joint venture which, according to its LinkedIn profile, provides China origin services, store ready services, and distribution center ready services to companies with supply chains that originate in China. In fact, this joint venture was implemented for a key client in 2010 to create, “A unique, end-to-end international logistics solution built on concepts of efficiency, affordability, and quality of service.”

While Werner Enterprises is not the only US-based trucking company to establish a Chinese presence it is perhaps among a slight few that may be able to take advantage of such a relationship on both sides of the Pacific. Other US trucking companies have invested in the Chinese market and for various reasons have pulled back the focus. For example, Schneider National offers 26 operating locations throughout China that includes over 2,000 carriers and more than 2m sq ft feet of warehousing and cross-docking facilities. In 2010, however, Schneider Logistics, a subsidiary of the larger entity, sold its US- and China-based freight forwarding and customs house brokerage businesses to Norbert Dentressangle – thus, ending its connecting link between China and the US. Meanwhile, YRC Worldwide sold its stake in Chinese trucking operator Shanghai Jiayu Logistics to focus on its North American trucking core operations.

A growing Chinese domestic market along with growing cross-border trade, particularly e-commerce, could bode well for those US transportation companies within the trucking sector and looking to invest overseas.