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Difficulties in the Development of Cold Chain Logistics in China

  • Edit:FLOA LOGISTICS CO.,LTD
  • Date:2024-09-05
  • Visits:1188
  • Sort:Industry trends

1. Where did the money go? -the financial difficulties


Before dawn, this is the most tragic scene of many investments. Why are so many people suffering from a serious funding bottleneck? Generally, there are the following situations:


First, the investment threshold is high, and the investment estimate is wrong. Copying the industrial model of "valuing assets over liquidity", thinking that the initial investment should be focused on warehouse construction and equipment purchase, and a small amount of liquidity can operate. As a result, this is far from the case. For example, the standardized warehouse has invested 2300 yuan/square meter, with 10,000 platforms as the standard, using 20 million investment amount, not including land cost; If a refrigerated truck is put into use, it will cost nearly 200,000 yuan based on 4.2M local distribution, chassis+carriage+cooler. Therefore, in the field, the entry of a state-owned enterprise and a foreign-funded enterprise is Mao Mao Rain. For traditional private enterprises, their development is quickly constrained by the bottleneck of funds. It is not enough for the top 100 enterprises in China to take up 1% of the market. Only a single pure third-party enterprise has an annual turnover of over 200 million yuan.


Quite simply, the periodicity of enterprises is very strong, the cost is also very high, and the turnover rate of working capital is obviously slow, which will inevitably lead to a large occupation of working capital. For example, the storage type has a relatively short cycle in modern industries, but it still takes three months to turn around. Moreover, it must be noted that during this period, operation+accounting period+reconciliation+invoicing+settlement, but his warehousing products customers have obvious off-peak seasons, and the annual warehousing volume is as high as 1:3. Without good business orders, his operating income fluctuates greatly. You can choose some: quick-frozen food (miss+Sanquan+hot pot ingredients)+ice products (ice cream).


In the second case, the investment cycle is estimated to be short. Although the payback period of investment is clear in theory, in reality, the influence of various factors often leads to serious deviation from investment expectations, and the payback period can't wait long.


It is said that the net profit of the best enterprises is less than 7% per annum, and that of cold chain transportation enterprises is less than 3%. But for financial enterprises, what is this? It's really about selling white powder and pulling Chinese cabbage business. Enterprises are basically contract customers. The contract system is one year, and the basic financial calculation of return on investment is based on 3-8 years. In the process, customers may be lost at any time. For example, cold chain vehicles are put into use, and a few years before they are put into use, the maintenance cost is low, and the customer viscosity is high. All of them are new cars, and the gross profit can be used. However, due to the expiration of the contract, peer competition and brain drain, the customer format will change, and the most important thing is to start from scratch. The risk is not only high, but also normalized in practice.


In the third case, the difficulty of financing is light. Industrial land is state-owned land, and once the right to use it is obtained, it can be mortgaged; There are also industrial plants, products, machinery, etc. that can be mortgaged, and there are finally many ways to alleviate the dilemma of liquidity. But the industry is different.


The financing of cold chain logistics industry is very difficult, which is for the development of agriculture and food safety in policy. In the Agricultural Development Bank, the conditions are very strict and the scope is small. During the period of customer's business expansion, it is difficult to evaluate your assets in the asset market when there are some policy obstacles in the disposal of old assets, resource allocation (where vehicles belong to the place of operation), and only heavy interest will crush the enterprise. Some business operators I met, speaking of the margin, were short of funds when they invested in warehousing and delayed payment of customers' accounts. That really made people feel sympathy.


In the fourth case, when the interest chain is multi-layered, the trust system, the contract period and standardization do not meet the risk control, the capital investment in private enterprises is almost zero. In the past, whether an enterprise is profitable depends on policies, inputs, talents and relationships, but now this formulation is still out of date. Because of its weakness, the state's support is self-evident for enterprises. As long as we observe, we can find that some listed agricultural products enterprises engage in cold chain, mainly relying on policy subsidies to maintain a positive profit level, land appreciation and political achievements to prevent delisting. But the problem is that the average region lacks the financial resources to subsidize a lot of investment.


For example, some cold chain enterprises with connections and backgrounds in the market have been policy-oriented and land-oriented, and have invested heavily in government and capital-related policy support projects. During this period, the enterprises that have invested are obviously empty-handed, betting on the future, and if the market conditions are not good, they can only encounter a worse predicament. Let him sit idle and wait for the offer. It is said that an enterprise in Dongguan has invested 40,000 yuan in the center (central kitchen), and it has been idle for five years and has not operated. The project built by a special zone with a national subsidy level of over 100 million yuan will eventually be sold and the refrigerated truck equipment will be rented as a supplement.


Second, where did the talents go? -the difficulty of development


A good boss confided to me his entanglement: the college student in charge of the field operation has already earned 6,000 yuan a month, but he also asked for a salary increase, which will rise to 8,000 yuan. If he doesn't, he will leave. The current market situation is not good, which will increase the expenditure burden and may cause a chain reaction of salary increase for other employees. An uneducated warehouse sorter asked for food, accommodation and no less than 3,500 yuan, and an outsourcing porter earned more than 6,000 yuan. I asked him how the college students' skills were, and whether they had found other substitutes. He said that the technology is very good, and the replacement person is not available for the time being. I then replied that it is normal to find no substitute, but there are many new cross-border enterprises, such as fresh e-commerce, Party A, the third party, and the capitalist. Talents are recruited everywhere, and the salary for job-hopping is basically more than 1.3-2 times. According to a tycoon who entered the market, he directly asked whether you came as a team or you. In 2015, there were thousands of talents for senior managers of cold chains. I heard at two ends in three days that so-and-so has gone where and so-and-so is going where. The impetuousness of the industry and the scarcity of talents have hindered development. At present, there is no shortage of capital and platform, and talents are the challenge to form the core competitiveness of enterprises!


In fact, many bosses I have contacted are basically faced with such practical difficulties and can't find talents; I finally found one, but I still can't keep it. Recently, I read an article saying that the biggest problem for small and medium-sized enterprises is the shortage of talents and the difficulty in financing, especially for cold chain enterprises. As the saying goes, it is easy to get a thousand troops, but it is hard to find one. Without good talents, the management of enterprises can't keep up, the technology can't keep up, and the benefits will certainly be affected, which is the fundamental plan for the development of enterprises. But why are cold chain talents so hard to find?


The most fatal point, in China, is the well-known large-scale food enterprise, which is also fatal to the loss of talents and business. An enterprise in South China has invested hard for many years and operated the cold chain LTL logistics trunk line at a loss. When the opportunity is ripe, a responsible person directly builds the original team, a team, and the same system. It is not the same as profit distribution.


Third, the channel for talents to rise is narrow. Even with high salary and warm feelings, it is difficult to retain talents for a long time. Because cold chain enterprises are generally small and do not have modern enterprise systems and mechanisms, the bosses of enterprises generally lack modern enterprise management concepts, and the management methods are traditional and simple, which is closely related to the boss's view of employing people. I have observed the employment concept of cold chain logistics, and generally there are the following:


One is cronyism, for fear that the real power of the enterprise will fall into the hands of others. Not only does it not release real power, but it is also very tight and demanding. If people are uncomfortable to stay, they must have jumped ship early.


The other is to hire retired leaders or middle-level cadres. Although they also have management experience, they mainly want to use other people's contacts to compete for funds to run projects. As for enterprise management and technology, they are second.


Three types are vase type, the enterprise is not big, and there are many people invited, such as "turtle", business administration high flyers, fund investment bank manager, and some consulting companies and the cold chain, which are hundreds of thousands of miles away, are often ambitious, acclimatized, wasting money, and even "inviting son-in-law to grieve", driving the really useful practical talents away.


The four types are Untitled Scholar-type. The enterprise has not done much, but the style is not small. A talented person has come, who is respectful on the surface and fearful in essence, for fear of showing that he has no skill, just like Wang Lun, Untitled Scholar, who first went to Liangshan, has no room for people. And who wants to be Lin Chong in this age? Let's leave early and go to another mountain. Wait a minute. Under these employment concepts, it is difficult to really get talents even if there are talents.


In a word, talents are always the heart disease of cold chain enterprises, which has both environmental problems and individual problems. My suggestion is to start with self-improvement, create a mechanism for talents to come, such as performance evaluation and warm care, and strive to weaken the disadvantages of cold chain logistics in talent competition.


Third, where did the management go? -the business difficulties


Is it a business? You can say yes or no. Because to some extent, cold chain enterprises are also affected by the difference between food and industry, it is quite difficult to establish a modern enterprise system.


Since cold chain enterprises want to go to the market and become bigger and stronger, they must establish a modern enterprise system, standardize management and grow stronger by strengthening management. In reality, many people complain that enterprises can't do much, and one of the important reasons is that enterprise management can't get up.


Ability when you are young, and management when you are old.


One is to stay in the "bumpkin" state, or to rapidly grow into a modern enterprise, especially in the modern enterprise management system.


Looking back at many enterprises, when they started, they often relied on the personal ability of the leaders. They were not only hard-working but also keen in management, and quickly opened up the world. However, when they reached a certain level, they gradually became unable to do so. They were both bosses and waiters, and it was hard to break the ceiling of their operations. According to the general management theory, the existence of management is inevitable when the number of teams exceeds 50. Those cold chain logistics bosses who do well are not highly confident and hands-on; But lack of self-knowledge, invite talents in time, set up a core management team, and constantly improve the management level.


It's easy to share weal and woe, but it's difficult to share wealth —— Be alert to the risks of family business


Except for those cold chain logistics enterprises whose capital goes to the countryside, many of the home-grown cold chain logistics are family-owned. As the saying goes, "fighting tigers and brothers, fighting fathers and sons", the main force of cold chain logistics, which can experience several times of growing risks, is often the family. There are family businesses both at home and abroad, but the general operation abroad is relatively stable, while the domestic family businesses are prone to the phenomenon of husband and wife turning against each other and father and son becoming enemies. The fundamental reason is that although the family businesses abroad are familial, the property rights are socialized and the equity is decentralized, and the normal operation of the enterprises will not be affected by internal family problems.


However, family businesses in China often have strong patriarchal characteristics, with closed shares, and the operation of enterprises can only be maintained at the ability level of family members. More importantly, China's family business is not only not socialized in property rights, but also not personalized. It can only be expressed as our family, and how to allocate father and son, husband and wife and brothers is not clear, which has laid a hidden danger for later internal disputes. How many times have family feuds been staged in the tide of separation of private enterprises in recent years! Therefore, clarifying property rights is not only a cold chain logistics, but also an institutional issue that general private enterprises must attach importance to.


This also puts forward an important topic that family businesses in China need to think about. What is the sustainable development of family businesses? That is by no means always in the hands of family members or future generations, but learning from the West to make enterprises a part of society, just like making water a part of the ocean, so that it will never dry up.


Harvard management may not work either-the core of management is people, not things.


An interesting story tells the fundamental problem of cold chain logistics management. A group of consulting management teams with doctors from prestigious schools and high-end are at a loss when managing a project. At this time, business leaders strolled around the grassroots level, but unexpectedly and accurately pointed out the crux of management. She saw that the company hired workers to go to work like employees of state-owned enterprises, and the plot of their labor was suspected of reappearing in the people's commune. Where did the enthusiasm and benefits of labor come from? Since then, the management has adopted similar methods of contract production and labor outsourcing, and the production efficiency and income quality have been rapidly improved. This story shows that the core of cold chain logistics management is to manage people, and it is not a superficial system and norm, but to conform to economic and social laws and let employees have the motivation to work.


In fact, it is not only the cold chain logistics, but also the core of the whole enterprise management. In the best-selling financial management book "Seven Habits of Highly Effective People", the eastern and western management concepts are integrated at the level of "people", that is, the core of management lies in people rather than things. Although the purpose is things, it lies in people's mental problems rather than material problems, which mainly solves people's moral problems rather than ability problems. The ideal state of management is people's collection and coordination rather than individual struggle alone.


From a practical point of view, cold chain logistics should focus on managing three types of people.


The first category is the core management team, which is related to the fundamental development of enterprises, and often makes people feel that "a thousand troops are easy to get, but a general is hard to find". To find a good management team, we must rely on the beautiful development vision of the enterprise, and enterprises with no future can't keep people; It depends on the personality charm of business leaders, and officers always rely on feelings and like-mindedness; It also depends on an effective incentive mechanism, man can't be a lifetime.


The second category is technical talents. In essence, the development of modern cold chain logistics is promoted by modern logistics. Professional talents determine whether the development strategy of enterprises can be implemented smoothly and the future development direction. Technical talents should be respected emotionally, treated well, empowered in production, and given room for loose ability to play.


The third category is a large number of employees, in fact, it is almost difficult to standardize the evaluation and effective supervision in the customer's business process, so most cold chain logistics business units in the world are family-run, because only in this way can the enthusiasm of labor be mobilized and the transformation from working for others to working for themselves can be realized.


The fourth category is the employees of the Ministry of Power. His personal income and invisible income under the jurisdiction of power don't match. Take a cold chain logistics and transportation enterprise as an example, there are two kinds of costs, self-operated and outsourcing. Sometimes, in order to complete the task, they just look for a car at a low price to prevaricate, and sometimes they use the cost of outsourcing for personal gain. It can be said that it is impossible to prevent it, and even the best distribution and performance are not as good as those of the person in charge of the enterprise. How many operators of cold chain logistics enterprises are shouldering the commander-in-chief and general dispatching posts at present?


Of course, the word management itself can also be discussed. To some extent, it is not management but reason. Reason is concept, rationality and understanding, and management is realized by service. It is necessary to attract cohesive teams with influential brands, to lead the development of enterprises with connotative culture, and to make the teams follow with true respect from the heart. Of course, these are not the problems of cold chain logistics, but the problems that ordinary enterprises will encounter, and there is no standard answer to provide, which needs to be explored and summarized in practice.


Fourth, where did the standard go? -the quality of cold chain logistics.


We must see some particularity of quality management of fresh food products and standardize fresh food from reality.