NZ logistics company cutting 'middlemen' from China trade

Ronnie and Doreen Xue of QEX Logistics. Picture / supplied

A Kiwi logistics company is making it easier for manufacturers to do business with China by cutting out middlemen and allowing their products to be sent directly to the buyer.

QEX Logistics was founded by husband and wife team Ronnie and Doreen Xue in their Auckland garage in 2010 when demand was heating up for the types of clean and green products New Zealand was known for.

The company now has revenue of over $22 million and has just completed a $2.5m capital-raising venture. It was ranked last year 13 on the Deloitte Fast 50, up from 42 in 2016.

As the company continues to extend its reach, QEX plans to list on the NXT in the first quarter of 2018 and eventually on the NZX.

Ronnie Xue said the service was a big breakaway from traditional export models, where all inventory needed to be sent to China and certified before it could go to market. QEX allowed manufacturers to keep their inventory in New Zealand and let the logistics company do the rest.

"Through our business channels ... we're basically cutting [out] wholesalers, distributors, and retailers in China and we are helping New Zealand manufacturers to sell to Chinese consumers directly."

Having said that, many of the company's customers were Chinese retailers so it was helping them get cheaper Kiwi products, too.

Despite incidents like Fonterra's mass recall after a botulism scare in 2013, or the 2008 "tainted milk scandal", Xue said New Zealand still products still enjoyed a very positive image in China.

"We know there's people the looking for safe and green products from New Zealand so we felt it was a good opportunity, and we're achieving it at the moment."

QEX runs commercial operations in New Zealand and China called New Y and Ditu, respectively, which provide storage, packaging, and delivery services for the parent company.

It also plans to set up an operations team in Australia in 2018.

QEX was the first cross-border logistics company in New Zealand to get risk management programme certification from the Ministry of Primary Industries, providing consumers with an assurance that their products are safe and authentic. It also offers a full traceability service.

The major products it exports are baby formula, dairy products, healthcare goods and personal parcels. The products are flown daily to China, cleared through customs and delivered to the end user.

Xue hoped QEX would eventually give New Zealand importers and consumers the same access to Chinese manufacturers' goods.

QEX currently has 20 staff in New Zealand and 10 in China.