CIMC sets up new company to develop unit load business, betting big on its future growth

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May 12, 2020, 09:00 ET

SHENZHEN, China, May 12, 2020 /PRNewswire/ -- China's leading logistics and energy equipment maker China International Marine Containers (Group) Ltd (CIMC) recently announced that it has integrated businesses of seven of its subsidiaries to set up a unit load device company as it sees huge market potential emerging from the sector.

The new company, CIMC Unit Load Holding Co Ltd, will specialize in production and operating lease of unit load devices, and will provide multimodal transport and smart upgrade services.

With a 4-billion-yuan ($5.6 billion) business scale already in place, CIMC Unit Load is expected to grow further and create tens of billions of yuan in market value in the coming few years, according to the group.

The move is part of the CIMC's strategy to focus on the development of smart logistics equipment, as it aims to build itself into a global leading smart logistics equipment and solutions supplier.

Compared with large-sized logistics equipment such as container and semitrailer, unit load devices are small and medium-sized unitized logistics vehicles, which mainly include boarding box, pallet and circulation box. They are the smallest unit in logistics transportation.

The rapid development of global logistics industry has brought huge opportunities for the sector to expand. Market of unit load devices has been growing in recent years. In vehicle, chemicals and retail sectors that require tailor-made devices and others that are in need of general ones, total demand has amounted to 170 billion yuan.

With further growth of logistics and express delivery market and support from the Chinese government, the sector is expected to embrace a "golden era" of development, analysts believe.

"Development of unit load devices is a natural extension of CIMC's large-sized logistics equipment business. With a sound asset and customer base, we've already gained a foundation in business development and therefore own first-mover advantage in this field," Huang Song, general manager of CIMC Unit Load, said.

Disposable wooden box and carton are mostly used as small and medium-sized unitized logistics vehicles in China at the present time, which is neither economical nor environmental friendly, Rao Changhai, general manager assistant of CIMC Unit Load, noted.

He took the pallet for example, saying wooden pallets accounts for 65 percent of the country's market share, much higher than the proportion in developed countries.

The increasing use of reusable plastics and steel pallets, which CIMC Unit Load specializes in, will help save logistics time and cost for enterprises and enhance efficiency for the logistics industry, Huang said.

The company will also play an important role in helping CIMC achieve its strategic blueprint. It will take advantage of RFID, 5G, artificial intelligence, big data, cloud computing and other advanced technologies to provide one-stop supply chain solutions for various industries.

By integrating with artificial intelligence and other advanced technologies in the future, unit load devices could become real "smart terminals" with the ability of gathering various data and providing intelligent solutions for goods deployment and other services based on analytical capability of big data, Huang said.

"There is huge space for imagination," he said.

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SOURCE CIMC