Key planks of the Damco business strategy
Expansion of geographic footprint in high-growth areas, customer segmentation
Consolidation of 315 customer service and operations offices into 50 with the implementation of lean management techniques
Implementation of single freight-forwarding IT platform
Most people outside China have probably never heard of Zhengzhou. Only a few years ago this ‘small’ city in north-central China was labelled one of China’s ‘ghost towns’, with empty apartments and buildings waiting for occupants.
Today its population is more than nine million, roughly the same as New York, and people and businesses are moving in every month, attracted by lower rent and labour costs than the coastal regions as well as an emerging status as an inland logistics hub. Seeing the opportunity for new business, Damco is joining them.
“Of the 25 fastest-growing cities in Asia, 18 of them are in China and they’re not ones that most people can name, because many of them are ‘small’, with less than ten million people,” says Richard Morgan, Chief Commercial Officer for Damco in Asia. “We looked at the map and started building business cases in the locations where we weren’t already represented and started moving in.”
Seven more will open
In the last 12 months, Morgan has overseen Damco’s expansion into or near 13 of these cities, including Zhengzhou. Seven more will open in North Asia in the coming half-year. It is all part of the company’s One Damco strategy to grow the footprint globally in locations where customers are growing their business.
The first new office to open was in Dongguan, in China’s Pearl River Delta. One of the country’s most famous manufacturing and transportation hubs, the PRD consists of nine cities and is home to thousands of manufacturers and suppliers to global companies like Walmart and Nike, both of whom are Damco customers.
“We opened in Dongguan because we wanted greater penetration in an area where we were already fairly well known,” says Jerry Chen, project manager of the North Asia expansion. “Many of the potential customers we were looking at were suppliers and vendors to some of our biggest customers in retail, lifestyle and technology.”