An Interview conducted with CEO of CargoFee by Mothilal De Silva
Origination of CargoFee
In 2009, May Chan as a young lady in her 20s had set up a freight forwarding company in the growth city Shenzhen to capitalize the explosive growth of china’s international trade. She is a native of Guangdong province, having a family background in textile trading business. Her entrepreneurial intentions were originated at tender age due to her early exposure to the modest family business at her home town in Guangdong province in Southern China. After a stint of a successful business operation, in 2019, she had envisioned a scenario that connect or empower thousands of freight forwarders and Importers / Exporters by embracing internet and digital technologies and renewing her legacy business model in a quite similar way to her business idol “Alibaba”.
Introduction to CargoFee
Cargo Fee provides a platform for Freight Forwarders to connect Importers or Exporters on line. Cargo Fee, Alibaba/Tao Bao, Didi Chuxing build and shape their businesses based on the cultural values such as Harmony and Trust, espoused by Confucius who had left a powerful signature on the psyche of Chinese people and businesses.
Cargo Fee’s unique positioning in online logistic and freight operations provide the advantage of running an Asset Light Business Model and a Strategy that it provides an open communication platform for Freight Forwarders and end user Importers/Exporters.
Cargo Fee’s 4 Strategic Pillars
Though Cargo Fee is highly dependent on 3rd party logistic providers, it has a vision of providing trouble free end to end logistic operation. Four Strategic pillars of CargoFee, which is illustrated in the figure below, govern its operations heavily.
1.0 Customer 1st or Customer Centricity
CargoFee considers two customer segments, Freight Forwarders and Importers / Exporters as their primary users and focussing heavily on them. Following measures had been taken to demonstrate their commitment for these user segments.
- Cargo Fee uses Artificial Intelligence to help Importers/Exporters in identifying matching Freight Forwarders to suit their requirements such as closeness to good suppliers, optimum shipping cost etc.
- 24*7 Chat line
- Provide shipment tracking service
2.0 Trust Builders
CargoFee is taking following Trust Building measures
- An authentication, verification process conducted by Cargo Fee to certify Freight Forwarder.(FF) This is a paid service and the FF who subscribe for this appear to be more trustworthy (similar to Truss Pass of Alibaba)
- Deployment of Client Service personnel for dispute resolution between shipper/buyer and freight forwarder. Managing a 24*7 hot line (similar to Xiaoer of Alibaba)
- Freight Forwarders undergo a general vetting process to get qualified to open a virtual presence on the Cargo Fee Platform
- Tighter Control on Freight Forwarders to minimize delayed or fraudulent shipment
- End user buyers can rate the Freight Forwarders
3.0 Fulfilment Efficiency
CargoFee platform has the option of selecting the optimum modes of transport to match the requirements of importer/exporter in terms of delivery time and cost. Though they do not handle transport, logistic and warehousing they take several measures to ensure fulfilment efficiency of their operations. The most noteworthy are following
- AI and Big Data augment the capabilities of CargoFee and its eco system partners, generating value for both parties and end user importer / exporter.
- By connecting trusted Freight Forwarders through a verification process
- Customer feedback is obtained through customer reviews and 24*7 hot line
4.0 Network Effect
Two sided Network Effect is created between End User Importers/Exporters and the Freight Forwarders. If Cargo Fee add more Freight Forwarders, more end user buyers will be attracted to use the platform. When there are more users across continents more Freight Forwarders will be attracted stimulating growth both ways. Free Trial for Freight Forwarders, Free entry for end users will increase the network effect more.
An Interview with Founder and CEO May Chan of Cargo Fee
- Mothilal- Can you elaborate your Vision?
May – I want to build CargoFee platform into a “One stop integrated Transportation and Logistic Platform for Small and Medium Enterprises of the World”. I hope that in the future, CargoFee can integrate all elements in the logistics supply chain, seamlessly connect them, and become the first platform to realize one-stop door to-door service, meeting the needs of most importers and exporters. I want to make the global shipping and logistic safe and sound!
2. Mothilal- Please explain your beginning and objective of starting Cargo Fee when you run a successful Cargo business. How do you leverage your existing business of Freight Forwarding during the take off period of Cargo Fee?
May – In the outset, I would like to rationalize my decision to build the CargoFee platform when I was running a brick and mortar logistic / freight forwarding company in the heart of the global manufacturing hub for hi-tech products, Shenzhen. As a Small and Medium size entrepreneur I gained the first hand understanding of the difficulties faced by small and medium-sized logistics companies. The cost of doing business in traditional businesses are high as customer acquisition and operational cost are high due to personal selling and manual intervention in the supply chain process. At the same time I observed the difficulties faced by Importers and Exporters in choosing the right service provider. I was fascinated and inspired by the Alibaba’s e Commerce business model where small & medium scale traders are empowered by helping them to build virtual shop fronts in Alibaba platform and thereby saving cost for running its own online shops individually. Similarly CargoFee envisioned by me allowed small and medium freight forwarding companies to display their information such as product details and prices, while simultaneously providing a convenient channel for end users like importers and exporters to select the partner with an optimum price and a delivery solution. Through CargoFee online platform, small and medium size Freight Forwarders can reach global buyers with minimal cost, bypassing 3rd party brokers / commission agents. Cargo fee platform is acting as a facilitator, mediator, enabler and simplifier for freight forwarders and importers / exporters to haul cargo from one destinations to another speedily and safely.
Clear understanding of the legacy cargo business and the marketplace, helped me to identify the changing needs of small and medium scale enterprises such as freight forwarders, importers and exporters during the iterative design and development process of CargoFee. My development team had worked closely with the employees of my traditional cargo business and sought constant feedback from outside freight forwarders. As the Founder and CEO of CargoFee, I worked closely with the design teams and established a collaborative culture among CargoFee team, my legacy Freight Forwarding Company and other Freight Forwarders. I also acted as the champion to connect different teams for trouble free communication, cross pollination and sharing knowledge. Therefore I effectively leveraged the capabilities of my existing traditional cargo business at the stage of building critical mass for CargoFee online.
Mothilal – What measures do you take to ensure safety of goods, on time delivery and ultimately Build Trust?
May – Cargo Fee’s management practices are built on corporate values such as customer centricity, honesty, integrity, professionalism and efficiency. These values applies to all our services including logistic. We strongly believe that it is important to take measures to build trust while improving the overall service levels of our logistic partner network by communicating with the freight forwarders effectively. At the same time, we give a personalize service to importers and exporters by guiding them to select the optimum solution and choose suitable logistic partners to meet their requirements. We also give lot of importance to freight insurance to minimize the loss to end user due to uncertainties of the environment. Multi-party collaboration is utmost important to make progress in logistic business strategically and to solve many pain points of international logistics operations.
Mothilal – How do you achieve Fulfilment Efficiency when Cargo Fee take a hands off approach for fulfilment? (Generally Fulfilment Efficiency is the efficiency of delivering ordered goods in terms of Time to deliver and quality of goods)
May – CargoFee platform does not operate the transportation process. But we will be the facilitators and enablers. We will combine the characteristics of traditional logistics and develop a set of standard operating procedures, as one of the conditions to monitor the efficiency of logistics services.
5. Mothilal- How do you differentiate your service from competition?
May – We orchestrate the operating power provided by freight forwarders from all over the world, as well as services in all links of the logistics supply chain, so that we can better integrate and utilize supply chain resources to build a door-to-door service model in the future. Unlike similar operations globally, our operational costs are much less than operators who controls end to end.
Mothilal – You had started Cargo Fee during a period of uncertainty for global trade. How do you overcome these environmental threats such as Trade War between US and China?
May – You are correct that the global trade is in a crisis or in a turmoil. The international logistics sector has been the most affected sector due to trade barriers, lower consumption and economic slowdown in many countries. But decline in imports and exports has created strong demand for new solutions across the market. As John F Kennedy said and in accordance with Chinese thinking, we want to convert the crisis into an opportunity.
We looked for hidden opportunities in a crisis by blazing a trail of innovation to revolutionize the cargo business. We saw an opportunity in the platform business where multi parties can come together to build an ecosystem, cushioning the negative effects of the trade war and economic slowdown. Seizing an opportunity in a period of market contraction is a smart move, because CargoFee platform helps small and medium-sized enterprises to get more customers, and this’s exactly what they need right now.
Mothilal – What are your future plans?
May – Our future plan is to empower small and medium-sized logistics enterprises with more vigour by showcasing their solutions including price packages to the world. We have to seize new opportunities created by Belt and Road Initiative (BRI) that span across six economic corridors across Asia, Europe and Africa. Belt and Road initiative will pair sea ports (maritime Silk Road) and air ports with other modes of transport like new rail networks (One Belt), sea and air in a more coordinated and integrated fashion, providing optimal mix of transport modes to end customer. BRI will reduce shipping times that translate into reduce cost. CargoFee has a challenge of incorporating these “improved scenarios”.
Currently we offer least cost options for our customers and it is a fairly good measure of reducing emission, reducing carbon footprint, waste in transportation and cost. In future we intend to introduce “CargoFee Go Green” solutions as a sustainability measure by offering emission friendly choices while meeting cargo transport needs of our users more transparently. This is the CargoFee’s commitment to society and future generations.