1. Trendsetter with no rivals – interview CargoPM CEO Feng Yuan
OlymTech presents the international logistics and trading platform –CargoPM that
gives the overall experience that the industry should recognize. So, what does
CargoPM do? How will it affect the industry? With some small doubts, “Ningbo
Shipping” has invited OlymTech CEO Feng Yuan for an exclusive interview.
Q: Ningbo Shipping A: Olymtech CEO Feng Yuan
Lets go back to the beginning, how did CargoPM start?
Q: Can you introduce CargoPM and the reason you chose that name?
A: 咖狗 (kagou) in Chinese sounds like cargo in English. CargoPM is our second
product. The business model that Olymtech uses for CargoPM is ‘EPM’ which is an
abreviation of Enterprise software, Platform and Market. CargoGM has been
successfully launched on the market, now it is the platform’s turn to be launched,
under a very similar name ‘CargoPM’. CargoPM has become the central online
platform for more than 500 International logistics service providers with the purpose
of providing fares for freight, for buyers all around the world. Guaranteed to have a
real-time price, service warranty of freight inquiry, booking orders, shipment tracking
and electronic transactions service, which usually is not involved in the logistics
business.
About the name, we have put a lot of thought into it. First of all, we believe that the
word ‘Cargo’ is the most fitting description for our future business model, rather than
of using the word ‘Logistics’. Secondly, we not only discussed about the English
meaning, we also considered the Chinese meaning of the name. The word ‘Cargo’
sounds like 咖狗 (kagou) in Chinese. 咖 implies professional, with a lot of experience
2. and a high level popularity. 狗 implies loyalty, speed and delicate. Therefore, 咖狗 is
the most accurate way to define how we think about the company. Thirdly, the name
is easily recognizable and does not infringe on any current trademarks.
The limitation of shipping in e-business
Q: The concept of e-business is not new and it is prevalent in many industries. What
is the main difference between CargoPM and other service platforms? Why have you
started it now?
A: According to the data and information, there is no standard measurement to
measure all the products. Therefore, CargoPM was created. CargoPM not is the
product of impulsive thought, the preparation for the eventual launch started 4 years
ago. At that time, we tried to arrange 8 people to input the freights of 6 companies
into our online business platform. However, we could not enter any results after 6
straight hours, due to the fact there was no standardized data available. At the
meeting, we decided to stop our online operations, as there was a lack of data and
basic knowledge.
Today, we let all the freight forwarders use our O2O software - CargoGM. By
combining that with CargoPM online platform, OlymTech could offer the complete
support across the logistics industry.
Q: CargoPM is now online. Did you encounter any difficulties building CargoPM?
A: There is a trend for E-Business to become the intermediary, customers’ also apply
this label our platform. However, suppliers will always have doubts. It is normal that
suppliers provide support on the platform. But how do you keep that even after the
platform has grown? In order to solve this problem, CargoPM is designed to help all
customers to build their own O2O platform, not only just helping them with stocks
and goods.
Q: Why did CargoPM choose this point in time to go online? Is the market mature
enough?
A: Originally, we planned to wait until the market was more mature. However,
because the market is now full of online business platforms that only provide ‘the
online marketplace’ with no content, we were afraid that the market would go bad due
to customer mistrust of these inferior products if we entered later. So, we decided to
launch CargoPM as the benchmark for the online business platforms and especially
the online logistics platform.
Trendsetter with no rivals
Q: Having only the ambition for CargoPM to become the industry benchmark, does it
mean that CargoPM only aims to flourish not ‘thrive’?
A: Online logistics platform is one of the logistics distribution channels. In the future,
International logistics companies will all go online and offer their service through all
the available platforms and distribution channels in order to be more readily
discovered by their customers. That’s why, we have developed the ‘the multi-
platform’ system. In the future, all the big and medium-sized companies will try to
3. create their own online platform. With the system CargoPM offers, they can enter the
different platforms at the same time in order to promote their products. Other similar
trading platforms to CargoPM are yihaodian, t-mall, jingdong, etc. What makes us
different from other platforms is that we want to build a freight forwarding online
marketplace that offers a multi-platform system for customers and at the moment we
have about 10-20 platforms.
Q: With the great influence of Internet and the great potential of this online logistics
platform, will there be any strong impacts on the logistics industry?
A: The Internet definitely has a strong impact on the intermediary companies. Many
freight forwarders asked me whether they will survive in the future, my answer is no.
The reason is because internet provides standardized systems and data to the users
while accelerating the flow of information. Freight forwarding service, thus, will not
be able to survive because they use information asymmetry which internet eliminates.
Q: Then what type of business you think will survive in the end? For the small-sized
enterprises to survive, could you CEO Yuan give some advice?
A: The businesses that are unique, full of content and resources will survive in the
end. My advice is to use Internet as a tool to promote products, to follow customer
preferences and to cooperate with shipping companies in order to survive. There are
many online business platforms that help you promote products. Meanwhile, if they
do not embrace Internet and acquire more contents or resources for their businesses,
they will disappear within 3 years.
However, I also want to emphasize the development of the online platform industry.
The fact is people are scared of change. They are afraid that the Internet will make
them loose their jobs. Instead, this might be the new era in which people can become
richer. The same applies to freight forwarding companies. If they do not adapt to the
new environment, their business will not survive and that’s definitely not CargoPM’s
philosophy.
Q: What do you think of the e-shipping business?
A: They can also become one of the big online logistics platform companies.
For a traditional business: what is the benefit you can get by using CargoPM
instead?
Q: Comparing the traditional business and an online shipping platform such as
CargoPM, what are the benefits that differentiate the two?
A: The three problems you usually face when using traditional way of freight
forwarding are:
1. The process is slow and it is difficult to build up networks. What they need to
do is to first integrate the resources and then expand the network. That’s why
CargoPM uses the central online platform to integrate the resources and took
half a year to spread all the networks geographically according to the product
categories.
2. The problem usually occurs with the management of sales personnel and the
promotion of products. CargoPM tries to resolve these two problems by
promoting in richer and wider areas with lower cost. We also can represent
250-500 vendors at the same time.
4. 3. Freight forwarding services usually depend on a number of people. In the
future, CargoPM plans to create paper free environment in terms of sales,
operations, finance and other departments. With this change, logistics
companies will have the right amount of people for operation. I believe that, in
the future, freight forwarding services in China will be able to use ‘one
manager + a few important freight forwarding employees’ and systems to
make a complete and sophisticated logistics service. As in Europe and the
United States where their freight forwarding operation systems are more
streamlined. They only use a few people to obtain up to 75% of FOB goods.
China obtains the leftover 25% of forwarding. OlymTech and CargoPM,
therefore, want to use this opportunity to upgrade China’s freight forwarding
system for more efficient forwarding in the future.
Q: How to use CargoPM? Is it easy and convenient to use?
A: Like any online shopping platform, CargoPM uses the most user-friendly way to
check the origin and the destination port. Users can also do shipment tracking and
search for the price. In order to avoid intensive competition, we aim to provide only
few prices for freight forwarding. For instance, the shipping company can choose up
to the maximum of two ports. They can choose higher or lower price by just clicking
on the booking button. With the online platform, we hope to eliminate credit issues by
changing the traditional credit system.
Q: What if there are problems such as deliberately damaged goods, how would you
deal with it?
A: Actually, there is no guarantee that trading customers are not going to deliberately
damage cargo. It depends whether they have psychological reward for the service
such as comforting money.
Q: Looking back on OlymTech’s business model ‘EPM’, we have seen how the
company uses ‘E’ and ‘P’, but what about the third part?
A: OlymTech plans to launch 3 products, which are CargoGM, CargoPM – online
business matching platform and CargoLC – finance service provider. With regard to
CargoLC, the company plans to hold the press conference within the year.
Company and CEO Background
Feng Yuan is the co-founder/director/CEO of OlymTech. His whole responsibility is
operation management. He is also the head of international logistics cloud computing
strategy and product planning.
OlymTech was established in May 2002. The Chief Architect, Jim Wang has
experience with the IBM Rational Software ASP platform, which was created in
Silicon Valley. The former vice president of the company, William F. Miller, who
graduated with a doctorate from Stanford University, is also labeled the ‘Silicon
Valley Godfather’. OlymTech is continually funded by many investors such as IDG
Capital, Matrix Venture and Yunqi Venture, all of whom are international and
domestically well-known venture capitalists. There are also other strategic partners
such as Aliyun.