Taking the hard road to China

Instinct told Doug Currie that expanding into China was the next logical step for Genesis Forwarding Services, the business he co-founded in 1986.

But before long, a host of obstacles began to hinder his path to becoming a global freight forwarding company.

At the beginning of this year, Doug Currie’s Far Eastern strategy was threatening to come apart at the seams. His hopes of turning his company, Genesis, into a genuinely global forwarding business rested on breaking into Asia and, in particular, into China.

Genesis had been an independent force in Shanghai since 2002, trading on a reputation for quality freight established by working with high-end brands such as the Saville Row tailor Gieves & Hawkes. Six months ago, China took a major step towards fully joining the global economy when quotas on its textiles were lifted and the big fashion houses began to seriously move into the market, but Currie was in danger of failing to deliver consignments to his usual exacting standards.

Currie thought that by setting up an office in China, he would be in full control of local business – he quickly learnt he was mistaken. ‘We found that there were individual negotiations and deals related to the business that we were not party to.’ As a result, the contract with the local general manager was terminated at the end of last year.

‘China can be a difficult market because the laws are constantly evolving as the country’s economic growth and prosperity increases,’ says Currie. ‘What we believe is culturally sound, those in China may not. It has not had our form of corporate governance and does not understand it.

‘Imposing your standards and working practices on the Chinese doesn’t work. They basically say, “this is our country and system. If you want to do business here, you do it our way”. Some aspects of our approach are a total anathema to them.’

Picking up the pieces

Following the departure of the general manager, there was some damage to Genesis’ office and items were removed. The eight local staff then received a series of veiled threats and after two weeks they all left the business together.

A full service was maintained through the assistance of Genesis agents in Beijing and also the co-operation of staff in Singapore. Currie flew over and stayed for ten days to support his Chinese manager in recruiting a new team, as well as to find lawyers who were more confident in handling these types of incident.

Genesis is now in a stronger legal position to operate as an independent entity in China and Currie has learnt that it is not enough to have a presence on paper. ‘You have to have people who speak the dialect,’ he admits. ‘We are now perfectly positioned, with an international network of local staff.’

So far, Asia only accounts for ten per cent of Genesis’ annual sales of £28 million, but its strategic potential is already proving to be more substantial. ‘We are not a small company, but we are a small forwarder,’ Currie states. ‘In China, we are getting more and more invitations to quote from multinationals, who would never ask us in the UK or US on account of our size.’

Flying high

To make gambles like China work, Currie, who is 48, follows a punishing schedule. Each year, he takes two eight-week trips around the world to visit all 17 of Genesis’ locations on four different continents. His challenge, and the reason he willingly spends 72 hours in a plane on each trip, is to create and enforce a standard set of working practices, giving senior managers in America and Asia the confidence to take the business forward themselves.

‘Training, customer service and all those good things take time,’ reflects Currie, ‘especially if you are an international organisation like ourselves which is trying to provide a seamless service. We have to build a team spirit in the global organisation and get a handle on what is happening locally.’

Currie’s approach has always been to put his money on the table, putting his faith in service, not price, and then waiting, for opportunities to arise. When he set up Genesis in 1986 with his partners Ken Howell and Roy Tricker, their takings in the first month were £34.70. It was not until the hurricane of 1987, when forwarders from Heathrow and Gatwick were unable to reach his adopted town of Eastbourne, that Genesis was finally able to persuade local exporters of the merits of an operation based on quality.

In 1993, when he decided to open his first office in the US, his bank manager told him that he would be broke in six months. Again, Currie had to wait for his chance to break into the market. It came on Independence Day in 1995. A cruiser ran aground off Oregon and broke its propeller. To keep a lid on compensation for disgruntled passengers, a new one had to be moved across the US from Virginia. A police escort and a permit had to be arranged for each state during a public holiday. Currie took the job and had the propeller there in time. Ten years later, the US accounts for 40 per cent of sales and Genesis has five offices there.

The company is now also operating out of Beijing as well as Shanghai, and is opening in Hong Kong this year. ‘China is becoming the world’s manufacturing supply centre,’ Currie believes. ‘We want to be able to work for global customers who want to switch production quickly around the world to secure the lowest costs. There are lots of clients out there that are unhappy with the mentality of big forwarders. We are just waiting for our chance to get their products to market on time.’

See also: Here’s how UK Cleantech firms can jump on board with the renewable energy revolution in China

Nick Britton

Lexus Ernser

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...