Simon Wong

Simon Wong

Photo: U-Freight

In only a generation, China has evolved from being a small niche player in international trade to the most powerful trading nation in the world. U-Freight chief executive Simon Wong was there to witness it all.

U-Freight is a freight forwarder that can truly say that it was there at the start of China’s industrial and commercial revolution.

As a young company in the early 1970s – it was founded in Hong Kong in 1968 – one of its first major trades was in high tech, or electronics as it used to be called. Except that in those days the flow of components was not east to west but from California’s Silicon Valley into Southeast Asia.

U-Freight also moved some of the first silicon chip manufacturing machinery to the region, as well as one of the first mobile phone manufacturing plants, perhaps little knowing that it was helping to trigger a global manufacturing and business revolution.

It remains, as it was back in 1968, a privately owned company. Then, as now, it has a culture of encouraging its own talent and cultivating the younger generation.

A key part of its policy has always been that family members of the shareholders are not allowed to work for the company, to ensure that the rising generation of managers’ path to the top is unobstructed.

Roll forward a few years, three decades ago, and a young Simon Wong took on a sales role at U-Freight. Recently graduated, and a dream of playing for Liverpool not quite having worked out, what attracted him was the prospect of a posting to New York; even then, the company’s policy was to nurture and encourage its junior employees.

The face-to-face world of 30 years ago was very different from today. He recalls: “At that time, we had an office in Manhattan. We had to set up appointments with possible customers and meet them.

"But at that time, there were many Hong Kong forwarders doing the same thing. It was tough, but it was good for me personally because, as a young person, it helped develop my experience.”

Moving east

Wong’s stint in New York lasted a couple of years and then it was back to Asia for what was, arguably, an even greater cultural change.

“I relocated to Shanghai, just at the time when China was beginning to open up to the outside world. It was all a very new experience, for both us and for them. There weren’t many fixed rules on how to handle cargo shipments so it was a matter, every day, of finding different solutions.”

This was the era in which manufacturing in China was just getting off the ground.

“U-Freight became well known for shipping capital equipment; complete car plants for GM or Volkswagen, the equipment used to make silicon wafers, and also some of the raw materials.”

It’s hard now to realise just how small China’s international trading presence used to be. In the UK, for instance, there were a handful of small forwarders that specialised in the limited requirements of the state trade corporations but it was regarded as a niche activity.

There was much more than physical change going on in China: “Dealing with some of the state-owned companies in China could have its issues. But then we started to see a much more service-orientated mind-set.”

China had created a modern-day enterprise culture in the space of a couple of decades – a process that took the West much longer to achieve.

After that initial two-year stint in Shanghai, Wong spent many further years in mainland China, helping to set up offices all over the country.

Again, there was a massive cultural shift going on: “There could be bureaucratic issues in the old days, which we had to overcome. Luckily, though, we had a policy to hire local people and we relied on them, rather than having me directing them. And this has been one of the successes of U-Freight as a company – we rely on the local people to get things done.”

China is a patchwork of extraordinarily diverse peoples and cultures and local know-how is essential in making things work smoothly. However, Mandarin has emerged as a universal business language, which certainly reduces communication issues.

robot technology

Robot technology at a U-Freight facility

Photo: U-Freight

The growth of U-Freight’s network in China has been paralleled by its overseas expansion. It has subsidiary companies throughout Asia and in the US, the UK, the Netherlands and a network of exclusive partnerships in other countries worldwide, most of them going back 25 years if not more.

It favours similar, like-minded family or privately owned companies as its partners and future expansion could involve the Middle East and Africa.

The development of China is truly breathtaking, not just the coastal cities where the country’s industrialisation started “but also the second-tier cities that are following that model very quickly – possibly places that most people outside China have never heard of", says Wong.

He adds: "China’s infrastructure is catching up quickly too, with high-speed trains, roads and so on.”

Generally speaking, says Wong, there is a widespread consensus that China needs to grow to keep its younger generation, including 10m graduates a year, engaged and gainfully employed.

U-Freight in China does however share with its overseas offices and partners a difficulty in attracting new talent to the industry.

“In Hong Kong, in particular, the younger generation almost won’t consider a career in freight,” he states.

However, the forwarder has adopted a clever strategy. While younger people might not be interested in freight, what does grab their attention is the internet and e-commerce.

E-commerce investment

U-Freight has leveraged its pioneering expertise in online transactions to develop an e-commerce logistics brand, E+Solutions (eplusss.com), separate from its traditional freight forwarding activity, and using the latest digital marketing techniques to generate business.

It offers online traders a worry-free platform, taking on all the freighting and customs administration and allowing them to concentrate on selling their wares rather than fulfilment issues.

U-Freight was in at the very start of the e-commerce revolution. It is believed to be the first forwarder to offer internet tracking of shipments and still has the hand-written notes for the first software from the 1990s, in case there is any doubt.

This, coupled with an internship programme with universities, has encouraged a sizeable proportion of the young graduates to stay with the company and develop their careers there.

And while getting people through the door in the first place may be tricky, people do tend to stay with the company, says Wong. Service lengths of 15-20 years are quite typical.

Having progressed through being sales manager, general manager Hong Kong and director of Hong Kong, he himself became chief executive of the company 20 years ago, possibly one of the longest-serving in the industry.

But what of the e-commerce revolution that U-Freight started a decade ago? “In some respects, it is a double-edged sword,” Wong states.

“It’s a good thing that we got in so early and found our niche. But one thing we do find now is that the sheer volume of e-commerce is crowding out general cargo, especially on the scheduled carriers."

“We’re working with carriers to find solutions, and they do exist, but only at a price. At the end of 2024, charter companies were offering flights from China to the US at $1m and per kilo rates had increased to $10. I don’t know if that is sustainable.

“Yes, there has been a move from B2B to B2C but it’s important to recognise that the spare parts, the raw materials and so on – they still need to move.”