Wednesday, March 12, 2014

China Logistics Group, Inc. (CHLO) Expands the Reach of Freight-Forwarding Business

China Logistics Group, an international freight forwarder and logistics manager based in Shanghai, is facing significant industry challenges yet handling them with style.

In recent years, the company has had to conduct business in an industry that has suffered considerably from a protracted recession in the European Union, a major slowdown in China’s economy, and an overall weakness in global demand. Rather than bow to the pressures of this difficult time, the company has taken steps to compensate for further weakness in the domestic and international markets it operates in by:

•           diversifying its client base;
•           expanding its services; and
•           making strategic acquisitions.

The company implemented these strategic growth initiatives step-by-step. First, it initiated the effort to diversify its client base by expanding into new international markets. The company noted a steady increase in trade between China and South America in the last ten years thanks in large part to strong economic growth in countries like Argentina and Brazil and began offering freight forwarding services from China to destinations in South America in March 2012. In 2013, it further expanded that business believing that the South American route could become one of its largest revenue-generating shipping routes in coming years.

Next, the company broadened the scope of its services by adding new domestic trucking services and improving its service capabilities. In 2013, it began strengthening its domestic trucking capabilities through a leasing arrangement with a major trucking company. It also focused on improving its competitive capabilities for several services, including the receipt of goods, warehousing, customs declaration, inspection declaration, multimodal transport, and combined large-scale logistics.

Finally, the company saw the potential to further accelerate its growth through strategic acquisitions and mergers that would allow it to reach greater economies of scale. It began evaluating strategic acquisition opportunities a while back and, at this time, is in the early stage of performing due diligence on one strong potential candidate. The plan is to pursue these opportunities aggressively and the hope to complete one strategic acquisition by the end of fiscal 2014.

The China Logistics Group is counting on these strategic initiatives—and improving domestic and international economic trends—to drive a sustainable growth track for its logistics operations now and in the future.

For more information, visit www.chinalogisticsinc.com

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