Lü Mingliang paused briefly, then continued: “Currently, we have four thousand Headwind Stations. You should know that some domestic courier companies only have about two thousand service points nationwide, so we’ve already surpassed them in terms of quantity.”
“Headwind Logistics has been operating at a loss for so long, relying on subsidies from other sectors, which isn’t sustainable in the long run. We must further reduce our losses and increase profitability to develop better.”
“So, I think we should begin preparing for regular inter-city courier services and take that profit from other courier companies!”
For a long time, Headwind Logistics had been doing the dirty, hard work that other courier companies were reluctant to do.
The “last mile” problem had always been a major issue plaguing the courier industry. It was convenient to transport goods from transit points to courier network points—just load everything on a truck and drive it over. But delivering packages one by one from network points to people’s doorsteps came with high labor costs.
In the same business of delivering packages, other courier companies handled the easiest, most profitable parts, while Headwind Logistics took on the most troublesome parts with the lowest profit margins.
Headwind Logistics solved the last mile problem for other courier companies, earning an average of only 0.2 to 0.4 yuan per package. Although they mostly handled smaller packages, they were still bleeding money, with efforts disproportionate to returns.
Some platforms had proposed using delivery lockers, letting customers pick up their packages themselves.
The problem was that these delivery lockers charged courier companies and saved them substantial costs, but transferred the burden of the last mile to consumers.
Consumers had to walk and carry things themselves, and the lockers occupied space provided by residential communities. In the end, this helped courier companies save trouble and allowed locker companies to profit, while consumers received no benefits and the door-to-door service they should have enjoyed was compromised.
Some customers preferred to collect packages from lockers due to their work schedules, but this should only be one option, not a mandate forcing those who didn’t want to go out to collect packages themselves. Such a cunning approach actually infringed upon consumers’ legitimate rights.
Headwind Stations allowed courier drivers to deliver to doorsteps while also permitting customers to collect packages themselves, with the latter option earning some points. This was a solution that protected consumer rights.
Lü Mingliang was naturally very dissatisfied with the current situation where others ate the meat while Headwind Logistics could only drink the soup.
He wouldn’t force other companies to drink soup, but why couldn’t he eat meat too?
Wasn’t it just about collecting packages, sorting them at distribution centers, loading them onto vehicles for transport to target cities, sorting them again, and then delivering the packages?
Why couldn’t Headwind Logistics earn this major share?
They hadn’t done it before because they had too few stores with insufficient coverage, so they needed to establish their network first.
Now with over 4,000 stores open, a big, strong man was still only drinking soup without eating meat, leaving himself starving and howling with hunger. Was that appropriate?
Obviously not.
So his visit this time was partly to report Headwind Logistics’ recent situation to Mr. Pei, and partly to gauge Mr. Pei’s attitude toward this matter, hoping to expand Headwind Logistics’ business as soon as possible.
He wasn’t expecting to quickly turn losses into profits, but at least they could start the inter-city courier business and reduce some losses.
Otherwise, continuing to operate at a loss made him, as the person in charge, look like he was just collecting a paycheck without doing real work, making it difficult to hold his head high even at management meetings.
Pei Qian’s expression instantly became very serious.
This was bad!
Obviously, after working diligently at Headwind Logistics for over a year, Lü Mingliang would not be content to keep repeatedly opening stores.
It was a testament to Lü Mingliang’s patience that he had endured for so long. If it were any other manager, they probably would have come protesting six months earlier, demanding business expansion.
Pei Qian considered that it wouldn’t be appropriate to refuse directly.
Lü Mingliang was a down-to-earth person who worked steadily, completed tasks very conscientiously, and had strong execution skills. The fact that he proactively raised this suggestion indicated that he had given it thorough consideration and could no longer hold back before approaching Pei Qian.
With over four thousand stores already established, and having solved the most difficult “last mile” problem, inter-city courier services would be a natural extension. Why not do it?
Apart from deliberately wanting to lose money—a reason he couldn’t disclose—Pei Qian really couldn’t think of any other reason to reject Lü Mingliang’s proposal.
But…
To fully agree with Lü Mingliang’s proposal just like that?
That wouldn’t work either!
Logistics could be quite profitable if done well. Headwind Logistics was losing money nicely, and if it turned profitable, Pei Qian would probably cough up blood on the spot.
So, he needed to make certain adjustments to Headwind Logistics’ business, appease Lü Mingliang, and ensure that these business adjustments would allow Headwind Logistics to continue losing money.
Pei Qian quickly thought of a good solution.
“Yes, you’re right. Headwind Logistics should indeed undergo some business adjustments.”
“But one thing to note is that although Headwind Logistics now has four thousand stores, they’re all distributed across four regions. They radiate from the four core cities of Jingzhou, Didu, Modu, and Yangcheng to surrounding areas. But in the vast areas outside these four regions, such as ordinary provincial capitals and second-tier cities, we don’t have any stores at all, let alone in small counties.”
“If we want to develop inter-city courier services, but can’t deliver to this city or that city, what competitive advantage do we have compared to other courier companies?”
“Other courier companies might only have two thousand stores, but they cover cities across the country, even reaching some small counties. That’s the fundamental difference.”
“Their stores cover a particularly large area. Although they handle many packages, deliver slowly, and often lose items, they can ensure coverage in most cities nationwide. We can’t.”
Lü Mingliang was becoming unsettled: “So, Mr. Pei, are you suggesting we wait until our stores cover the entire country before we can do regular courier business? That would take forever…”
Pei Qian smiled slightly: “What I mean is, we can do it, but we need to differentiate ourselves from other courier companies.”
“If we merely rent warehouses, buy sorting equipment for distribution centers, and rent large trucks to transport goods, how would Headwind Logistics differ from other courier companies?”
“My idea is to leverage Headwind Logistics’ current advantages and be faster than all other courier services!”
“To be faster than other courier services, we can’t use traditional land-based transportation methods. We’ll use air transport!”
“We’ll negotiate with airlines to lease aircraft for transporting goods. With Jingzhou, Didu, Modu, and Yangcheng as the four central cities, there will be at least one round-trip flight per day for cargo transport between each pair of cities. That’s twelve flights daily, delivering courier items to corresponding cities.”
“After that, these goods will be sorted and transported to surrounding cities through traditional land transportation. This way, we’ll be faster than other courier companies! Of course, this is limited to areas within our service coverage.”
“Outside these four regions, we won’t provide any pickup or delivery services for now.”
Lü Mingliang was stunned.
So Mr. Pei wasn’t disagreeing with his view but thinking even further ahead!
Currently, in this world, courier companies primarily used land transportation. If one sent a package from Yangcheng to Didu, it would take three days, or even four days or longer if delayed.
Mr. Pei’s idea was to use the four cities where Headwind Stations had high coverage—Jingzhou, Didu, Modu, and Yangcheng—as centers, defining their surrounding cities as land transportation zones.
Between these four cities, using exclusively air transport would reduce delivery time from three days to within one day for packages that would typically require land transport.
Within a region, such as from Jingzhou to other cities in Handong Province, they could use conventional land transportation. While this might not offer a significant speed advantage over other courier services, it was important to remember that Headwind Stations belonged to Tenda.
For the same goods, Headwind Stations would prioritize their own deliveries before handling those from other courier companies.
This way, anyone within the coverage area of Headwind Stations would definitely get better service using Headwind Logistics for sending or receiving packages compared to ordinary courier companies.
Those four thousand Headwind Stations weren’t established for nothing; they would certainly demonstrate their effectiveness now.
What Pei Qian really cared about was simple: air transport had a high barrier to entry, and most importantly, it cost more money!
The fuel cost for a single flight compared to several large trucks making long-distance journeys? They weren’t even in the same league.
Plus, air transport charges would definitely be much higher than regular courier services, so not many people would use it initially. Additionally, air cargo had strict restrictions, with many items prohibited from being transported by air.
If planes had to take off on schedule regardless of whether they were fully loaded, flying empty would be pure expenditure.
Moreover, partnering with airlines, leasing aircraft, and eventually building airports and purchasing aircraft—these were all enormous expenses with great potential for burning money on upgrades in the future.
Of course, if air transport became successful, land transport would also be easy to implement.
As Headwind Logistics developed further, Headwind Stations would certainly expand to more cities, and long-distance transportation would not rely solely on air transport. Gradually, they would also use land transport, including railway transportation and long-distance freight.
But those were concerns for the future.
In the short term, Headwind Logistics would only use this “inter-regional air transport, intra-regional land transport” model, which would definitely lose money.
As for which goods could be shipped, which couldn’t, which places could receive deliveries and which couldn’t—these would all be controlled by the courier staff at the lowest level.
Before customers sent packages, couriers just needed to check whether the goods met standards and whether the destination had a Headwind Station.
If yes, they would use Headwind Logistics for shipping; if not, they would use other courier services.
After the business expansion, the Headwind Logistics section in the Tenda Life APP would also need updating to allow users to track their packages in real-time.
However, these were all matters for Lü Mingliang to worry about in the coming period.
Pei Qian said, “That’s roughly the situation. Of course, cooperating with airlines, leasing aircraft, renting factory buildings in the suburbs to establish sorting centers, and further updating the entire courier logistics system to make transitions between different steps more seamless… all require extensive preliminary work.”
“So, I’ll give you three months for preliminary preparations and business negotiations. After three months, I’ll allocate a special fund to gradually implement the new business.”
The main reason was actually about funding.
Tenda had just recovered from the previous money-burning battle and was quickly replenishing its finances, but Pei Qian had already thought of many ways to spend that money again.
This business upgrade for Headwind Logistics was an expenditure outside the plan, as Pei Qian hadn’t allocated special funds for it previously. Leasing aircraft and building sorting centers in various cities wasn’t something that could be accomplished with a small amount of money, making it difficult to squeeze in.
Moreover, there were only two months left until settlement, which was clearly not enough time.
When the next cycle began, the film’s returns would likely arrive, and various departments would have accumulated large sums of money again, which could be burned on Headwind Logistics.
Lü Mingliang was very pleased; this meeting with Mr. Pei had been quite fruitful.
He immediately nodded: “Understood, Mr. Pei. I’ll arrange it right away and make sure this is handled perfectly!”