John Lau believes strongly in setting and meeting the highest of standards. The Hong Kong businessman and logistics magnate uses the example of a school report card to explain how he grades himself and his staff.
“In business, unlike in academic studies, 99 out of 100 is a failure. You fail,” he tells The CEO Magazine.
“What would 100 marks be? It is only a passing grade. Anything exceeding 100 marks is extra credit. That’s how demanding I am on myself and my colleagues. And every one of my customers knows that I mean it.”
Lau has aimed at excellence throughout his business career, which has worked to cement his formidable reputation in Hong Kong business circles and the global logistics industry. As the Founder and Chair of CN Logistics, he has built the company into a world-leading integrated logistics service over the past three decades.
The company now excels in offering air freight forwarding services and serving niche sectors such as fashion, luxury goods and fine wines with logistics and distribution services. It also provides logistical services for cruise ships.
Lau’s story is the stuff of legend. After graduating from the University of Hong Kong in 1971 and working for the merchant business Dodwell, he struck out on his own in the 1980s, founding a company focusing on freight forwarding and mid-stream container handling.
“At that time there was no concept of logistics, there was no concept of supply chains,” he recalls. “It was only freight forwarding.”
Technology was simple too – Lau remembers his biggest technological investment at the time being an IBM typewriter.
He went on to found Cargo Services Far East in 1989 – the parent company of CN Logistics – to handle international logistics and supply chains. Lau recognized the importance of innovating if he was to succeed in a rapidly changing industry, which was in the process of a technological transformation.
“If I’d just stuck with the freight-forwarding business, I would not be what I am today. I already saw it was a sunset industry,” he says.
“If I’d just stuck with the freight-forwarding business, I would be not what I am today.”
When CN Logistics began handling air freight shipments into China, the timing was fortuitous as the country was just starting to open up to the outside world and its domestic consumption was increasing. “China turned out to be much bigger in terms of every business for us,” Lau says.
He began brainstorming with Tim Ngan, CEO of CN Logistics, about ideas for China. They considered a fast-moving consumer goods business but concluded it would require enormous investments in warehouses and warehouse management systems (WMS).
Lau recognized that the high-fashion industry, in particular, presented opportunities, and he and his team developed a proprietary WMS to cater to its unique distribution needs. The strategy proved enormously successful.
“Our name started being known to the high-end Italian and French fashion houses,” he says proudly.
Another strategy was to pioneer product order management to optimize efficiency and provide transparency.
“I saw in my sourcing days how nervous a buyer would be to place a big order in China,” Lau recalls. “So I knew that if I could provide a solution to them on the computer where they’d be able to see progress of the order, it would be of benefit.”
CN Logistics’ reputation for quality merchandise logistics has subsequently spread. It now handles more than 30 percent of Hong Kong’s fine wine imports and is exploring business-to-consumer (B2C) businesses, starting with wines.
Another of the company’s B2C initiatives is a user-friendly platform called CNShip4Shop, which allows Asian consumers to access prestigious foreign brands in Europe, North America and Australia.
“B2C has a much higher value than B2B, so we believe that all our efforts and investments in the B2C business will provide more value to our shareholders in the long-term,” Lau says.
“For me, the most important requirement is setting the vision for the company.”
The COVID-19 pandemic has presented special challenges for logistics firms, with supply chains slowing and ports backing up. CN Logistics has worked closely with customers on plans to mitigate costs by adjusting dates or finding a combination of solutions to provide the best services at affordable rates.
Lau’s passion for logistics is matched by his passion for leadership. He describes it as “aiming for excellence”, which is a principle he promotes as part of his company’s corporate culture.
“For me, the most important requirement is setting the vision for the company. Setting the vision, then building up the culture to support the vision and the services,” he says.
“With excellence, there is no compromise. In any business, whether you are in service or in products, you must aim for excellence, otherwise you can’t satisfy the discerning customers requiring perfection.”