An Empirical Study On "Financing Logistics" Business Of COSCO Logistics Co., Ltd

In the 1990s, the concept of third-party logistics (3PL) was transmitted into China. Due to the incentives and Chinese enterprises ’ demand for lo gistics outsourcing, third-party logistics is fast becoming an emerging industry with rapid development. However, from the overall perspective, Chinese logistics enterprises’ scale are small and their service level are not high. Compared with European and American developed country, there is an obvious difference.COSCO Logistics Co., Ltd. is Chinese leading third-party logistics enterprise. After creating six brands such as home appliances, automobiles, electricity, chemical industry, medicine, and exhibition, COSCO Logistics launched a new model of "financing logistics" in the form of movable property pledge to solve the Small and Medium Enterprises (SMEs) faced financing problem. COSCO Logistics carry out "financing logistics" business which consists of Physical position, Bonded warehouses, Warehouse financing and Warehouse land and sea. The number of participant companies is 500 and the bank line of credit is 20 billion yuan. In order to ensure the safety of the "financing logistics", COSCO Logistics also developed a set of risk control and management measures.This article considers the "financed logistics" of COSCO Logistics as the innovation model of value-added service in third-party logistics enterprises, which is the trend of Chinese logistics industry. By carrying out value-added services, logistics enterprises can enhance their core competence and have stable customers. They can also easily respond to the increasingly intensified competition of international logistics giants.The paper consists of two parts: the introduction and the body. The body is divided into four parts. The first part is a brief introduction of COSCO Logistics Co., Ltd. As the leading company in the industry, COSCO Logistics are facing dual pressures which are not only the big challenges by international logistics companies but also the unfair competition in the industry. The second part discussed that COSCO Logistics created the innovative business model "financing logistics" to deal with pressure. There are four types of this business model. "Financing logistics" can not only solve the Small and Medium Enterprises (SMEs) faced financing problem but also bring up a large number of stable customers. The third part discussed that COSCO Logistics developed a set of risk control and management measures, particularly a set of contingency plans to prevent the risk of "financing logistics". The last part is the consideration of the "financing logistics". "Financing logistics" is a new model of value-added services. Value-added services are important action to enhance the competence of logistics companies.