bookrandom Chapter 594 Building Your Own Logistics System
Chapter 594 Building Your Own Logistics System
Three days later, the contract from Jinghua Chain arrived as scheduled. Li Xiangyang carefully reviewed every clause; there were no traps or unreasonable demands. The moment he signed, he knew that the company had truly ushered in a turning point for development.
Problems arose before the ink on the contract was even dry.
"Director Li, there's a problem with the transportation company," Feng Mingyuan rushed in. "They say they don't have enough vehicles and can only complete half of the orders."
Li Xiangyang put down the documents in his hand, his brow furrowing slightly: "What happened? Didn't we have a good discussion before?"
"I heard they took on a big client's order at the last minute and are prioritizing that side," Feng Mingyuan said with a hint of helplessness. "I asked a few other transportation companies, and they either doubled the price or their schedules were booked until next month."
This is the drawback of relying on outsourced logistics. Li Xiangyang had long been aware of this problem, but had never had a suitable opportunity to solve it. Now, the large order from Jinghua Chain is forcing him to face this reality.
"Can you help with Ma Laosan's side?"
"I've already contacted them, but their trucks are mainly for long-distance deliveries and they lack experience in city deliveries. They also don't have enough vehicles."
Li Xiangyang pondered for a moment. Without resolving the logistics issues, even the best products wouldn't sell. This was especially true in the food industry, where timely delivery and temperature control directly impacted product quality.
“Go contact a few logistics companies in the county and see if they can temporarily allocate some vehicles,” Li Xiangyang stood up. “I’ll go to the transportation company and talk to them personally.”
The largest transportation company in the county town is called "Tongda Transportation," and its owner is Zhao Zhiqiang, a shrewd businessman in his forties. When Li Xiangyang arrived, he was chatting with several drivers in his office.
"Director Li, what a rare guest!" Zhao Zhiqiang greeted him warmly, but a sly glint appeared in his eyes. "I've heard your business is booming. Congratulations!"
"Mr. Zhao, you're too kind." Li Xiangyang got straight to the point. "I'm here today to discuss delivery matters."
"Oh dear, this is a real dilemma for me," Zhao Zhiqiang feigned a helpless expression. "As you know, business has been booming lately, and the parking lot is completely full."
Li Xiangyang knew, of course, that this was just an excuse. When the company had fewer orders, Zhao Zhiqiang was eager to take on more business. Now that orders were bigger, he was starting to act arrogant.
"Here's the thing, we have an urgent order that needs to be delivered within a week. The price is negotiable."
"A week?" Zhao Zhiqiang shook his head. "Director Li, it's not that I don't want to help, it's just that I can't schedule it. Why don't you wait a little longer? I'll definitely prioritize arranging it next month."
This was clearly price gouging. Li Xiangyang sneered inwardly, but maintained a polite demeanor on the surface: "What if the price increases by 30%?"
A flicker of greed crossed Zhao Zhiqiang's eyes, but he quickly shook his head: "It's not about the money, it's that we really don't have a car."
50%.
“Well…” Zhao Zhiqiang hesitated deliberately, “we can think of a way, but we can only guarantee half of the shipment.”
Li Xiangyang knew there was no point in continuing the discussion. Zhao Zhiqiang was clearly going to make exorbitant demands; even if he agreed to his conditions today, Zhao would only escalate them next time.
"Never mind then, I'll think of another way." Li Xiangyang got up and left, leaving Zhao Zhiqiang standing there in a daze.
Back at the factory, Li Xiangyang called several partners into the meeting room.
"The logistics problem is more serious than I imagined," he said bluntly. "Now we have two choices: either be at the mercy of others, constantly held back by transportation companies; or build our own logistics system."
Ma Qingfu was the first to speak out: "Building your own logistics network is too expensive, isn't it? Just buying the vehicles alone would cost a lot of money."
"Besides, we're not familiar with this industry," Ma Laosan said with some concern. "What if we mess it up?"
Li Xiangyang had anticipated such opposition. He produced prepared materials: "I've done some preliminary calculations. Based on the current order volume, we pay over 80,000 yuan to the transportation company every month. If we build our own logistics system, the initial investment would be around two million yuan, but we could recoup the cost in a year and a half."
“The key is control,” he continued. “With our own logistics system, we won’t have to rely on others anymore. We can also take on delivery services from other manufacturers, increasing our revenue streams.”
Wang Ergou, who had been silent until now, suddenly spoke up: "Xiangyang, you already have a plan in mind, don't you?"
Li Xiangyang nodded: "I do have some ideas. We can implement them step by step: First, buy ten trucks to build a basic delivery team; second, establish a distribution center and improve warehousing facilities; third, expand our business scope and become a regional logistics company."
"How do we solve the personnel problem?" Feng Mingyuan asked.
“Drivers can be recruited from outside, and managers can be promoted from within.” Li Xiangyang had already considered everything carefully. “I plan to put Wang Hu in charge of the logistics department; he’s worked at the factory for so long and is very familiar with the business.”
Wang Hu is Wang Ergou's cousin. He has performed well at the factory in the past two years. He is quick-witted and hardworking.
"What about the funds?" Ma Qingfu was still worried about the investment risks.
"The factory has enough working capital to support the initial investment," Li Xiangyang said firmly. "This isn't spending money, it's investing. If we don't do it now, we'll be in a much more passive position later."
After the meeting, Li Xiangyang immediately took action. The next morning, he and Wang Hu went to the used car market in the county town.
"Brother Li, are you really going to buy so many cars?" Wang Hu was a little nervous; this was the first time he had participated in such a big decision.
"When you do something, do it thoroughly." Li Xiangyang patted him on the shoulder. "From now on, the logistics department is in your hands. Have confidence."
The used car market was filled with a dazzling array of trucks. Li Xiangyang headed straight for his target—a Jiefang brand truck. This type of truck was sturdy, durable, and easy to maintain, making it ideal for the early stages of a business.
"Boss, what's the price of this truck?" Li Xiangyang asked, pointing to a truck that looked about 80% new.
"You have excellent taste! This is a car from last year, with only 20,000 kilometers on it," the car dealer enthusiastically introduced. "The original owner was a long-distance driver, but he sold it because of health problems. Asking price: 68,000."
Li Xiangyang walked around the vehicle, checking the engine, tires, and cargo box, and then climbed into the cab to test various equipment.
“The engine sounds good, but the price is too high.” He started to bargain. “Fifty-five thousand at most.”
"Oh dear, that's too much!" The car dealer looked pained. "This car is definitely worth this price, would you like to add a little more?"
After some haggling, they finally settled on a price of 58,000 yuan. Based on this standard, Li Xiangyang looked at several more cars and selected ten that were in the best condition.
"Can you give me a discount if I buy ten at once?"
The car dealer did the math and finally agreed to reduce the price by another 2,000 per vehicle. Buying ten trucks for 560,000 yuan, averaging less than 60,000 yuan per vehicle, was quite a bargain.