We recently caught up with Rebekka Wang, Managing Director of CHS Containers Handel’s China office. CHS Containers Handel is one of the founding partners of New Silk Road Network (NSRN). After finishing a busy day's work, Ms. Wang spoke to us regarding various topics involving their business.
Apart from an already established set up in Europe, we learnt how the China branch, led by Ms. Wang is extensively growing their presence in the region and playing a part in connecting East and West. On a more important note, Ms. Wang described the benefits of Shipper's Owned Containers (SOCs) and their increasing demand. Finally, Ms. Wang also stressed on the need for having a strong partner and customer base that will see a company through unforeseeable occurrences.
Q1. We would like to dive into CHS's operation in China. When were the offices set up, and what was the process of expanding into the Chinese market? Moreover, as you are the Managing Director of the CHS's China operation, when did you join the company and what are your roles and responsibilities?
Rebekka: CHS Containers Group is a German company, started in 1978 and in 40 years it has expanded through Germany, Europe and now in China. We are a part of their operations in Asia. CHS began their first office in Taiwan, to cover the Asian continent, but it did not work out. So CHS built up their operations in mainland China, and we are based in Shanghai. We registered ourselves in 2018, and I joined the China operations team in 2019. Although, I have been a part of CHS Containers since 2001, working for their daughter company WCT. Now I'm reunited with the mother company. So it's been almost 20 years.
Essentially, I trade containers worldwide. This is what I have done in this business for almost 20 years now. For CHS, it was necessary to come to China to do some business along the New Silk Road. It was also a good time for me to join, and I am quite happy here. I appreciate this opportunity and my colleagues. I hope they are happy too! (laughs). We have a small yet hardworking team of 5 people that were carefully selected for the task at hand. So much of my work takes place over the mobile phone, so it goes where I go. Even my colleagues work this way. The customers or truckers reach out to us anytime they have a problem, so sometimes the calls come at odd hours.
Shipper's owned containers and the New Silk Road
Q2. The Belt and Road Initiative has been significantly contributing to connecting the East and West. As New Silk Road Network's focus is on the creating a transparent environment for business', what would you think are some of the misconceptions that people have while conducting business with a company based in China? Is it different being a China-based branch of a German company? What are the main challenges in intermodal and transport along the Silk Road?
Rebekka: CHS containers is a well-known and reputed German company, with remarkable work-ethics. Our partners and customers are also acquainted with our work ethos. CHS China, imbibes the same European working culture and our own Chinese style, in this way we cater to our customers from all across. One of the most significant issues that lots of Chinese companies face is communication, but we do not face that in CHS China since we are multilingual. We like to make our customers feel comfortable. Moreover, we offer them fair prices and safe cargo handling.
Coming to intermodal, it is still brand new and cannot be compared to the big sea vessels or the speed offered by air cargo. However, there are benefits to it that many companies are slowly realising. Intermodal transport has the ability to conduct door to door shipments in a matter of 20 days. You cannot do the same with air or sea freight, as the cost of air freight is too high and sea freight takes a long time. Even though there might a lot of challenges, we believe that there is untapped potential, but one disadvantage is that it is not as popular in Europe as compared to China. That is why many European countries are unaware of the steps to undertake while conducting intermodal transport. We hope to share our experiences with other European companies, and that is why such a network is significant.
Q3. As CHS mainly works with shippers' owned containers both on the sea and rail freight side, how has the business related to these two modes of transport developed for you? What are the common misunderstandings or opportunities missed out for people when it comes to leveraging SOCs?
Rebekka: We not only have demands from shipping lines or railways, but we have also had sustained opportunities to perform project cargo. Thankfully, we have a massive demand from all over. This is what many local companies do not have. One of the problems that we sometimes face is that people do not know how to book or handle SOCs. We have to inform them step-by-step and take them through the procedure. However, more and more companies are now learning about SOCs and prefer it.
We can move containers from China to any part of the world, including America. We also allow our customers to keep containers for a longer time. We understand that returning empty containers strains the pocket of our customers. Therefore, we also offer to give back the containers to shipping lines. With our network of partners and customers, we often repurchase the containers, keeping it as flexible as possible.
Aspects of Supply Chain in China
Q4. Many people say that the hub system for rail freight is not yet as mature as ocean freight, given that it is less mature, what is your take on that?
Rebekka: Of course, rail freight is new and will take some time to reach the abilities of ocean freight. Our business is with containers; therefore, we have a broad base of clients, including railway companies and some government platforms too. Even though we don't do logistics, there is much business for us with rail and ocean freight. Since the Hub and Spoke system is healthy in China, we always maintain a good relationship with truckers, as they like to know whom they are working with. We have many good connections with trucking companies and can help our customers with last-mile delivery in China. What is most important for us is to have stable cooperation with our customers and partners, and this is because we provide better rates; we are flexible, and we undertake all procedures professionally.
Q5. Was there an impact because of coronavirus on Chinese operations? If so, what were the measures you took to stabilise the business and retain customers? Were there any lessons learnt?
Rebekka: Unfortunately, the coronavirus caused some unprecedented situations for us at the time. From February to March, things were at a standstill as the depots were closed and the containers could not move at all. However, things have changed, and everything is back to normal now. The business has considerably picked up, and we are doing well again. There was much to learn from this experience. It has been the survival of the fittest, but that can only be achieved if you have secure and reliable partners who will be there for you in time of crisis.