Chapter 179: Acquiring the Ship and Facing New Supply Chain Challenges
By July, time had flown. From Europe, Sun Zhiwei had sent back updates about several vessels that were up for sale. The documents and photos were sent by air mail to Hong Kong.
Looking at the images of various ships, Su Yiyi asked, "Dong-ge, these ships are so expensive. How do we choose one while we're still here in Hong Kong?"
"We'll have to go to Europe eventually," Yang Wendong replied. "But we need to finish gathering all the information here first. I've also reached out to some veteran captains and first officers who've been in the shipping industry for decades to get their input."
Though Yang had delegated the initial assessment to Sun Zhiwei, this wasn't a decision to be made lightly—after all, it involved several hundred thousand Hong Kong dollars. He had no intention of relying solely on someone he'd only just hired. The plan was to cross-reference the info with multiple experts before committing.
Wei Zetao added, "Miss Su, in addition to consulting professionals, we've also commissioned a third-party investigation agency in Europe to verify the ship records—checking for authenticity and any history of major incidents."
"Oh." Su Yiyi nodded. "That makes sense. At that price, it's worth the extra effort."
Yang asked, "Old Wei, how did the verification on the Wilson come out?"
Wei replied, "No major issues. The documents from Oslo were slightly 'polished,' but the ship itself has no record of major accidents.
The only thing is its fuel consumption might be about 10% higher than expected, because its engine is still from the 1940s—technology's a bit outdated."
"That's to be expected for a second-hand ship." Yang nodded. "Fuel prices are low right now. The extra cost is acceptable."
In this era, many Hong Kong shipowners preferred used ships largely because oil was dirt cheap. Even if older ships used more fuel, it didn't matter much.
That calculus only changed after the oil crisis.
Wei smiled. "And for us, fuel isn't a huge issue anyway. Our cargo is big in volume but light in weight."
"Good point. I didn't think of that." Yang smiled.
Wei continued, "Captain Sun has also found info on a few other vessels. The documents should arrive in Hong Kong in the next few days. Once we've verified everything, we'll need to make a decision soon."
"Is there a problem with U.S. exports already?" Yang asked.
Recently, rolling suitcases had started to be exported to the U.S., in addition to Japan and Taiwan. Thanks to their long-term cooperation with a major American distributor—and 3M's enthusiasm after receiving the first sample shipment—they had high demand waiting.
"Yes," Wei replied. "Our suitcases take up too much space. The cost is high, and Hong Kong's export volume to the U.S. is already massive. It's difficult to even secure enough shipping slots."
"Alright then, let's verify everything, and we'll head to Europe to finalize the deal," Yang said, making the call.
A week later, after all cross-verifications were complete, Yang and Wei flew to Europe to inspect the shortlisted ships and meet with the maritime investigation agencies.
Eventually, they purchased a 10,500-ton cargo ship from Oslo Shipping Company in Norway for $476,000 USD.
They paid a $200,000 down payment. The balance would be paid after the ship arrived in Hong Kong, underwent a full inspection, and officially transferred ownership to the Hong Kong team.
While aboard the massive cargo ship once again, Captain Sun said, "Mr. Yang, based on Mr. Wei's specifications, this ship can carry about 60,000 to 70,000 rolling suitcases."
"Sixty to seventy thousand? That's excellent." Yang nodded. At standard freight prices, a shipment like that could fetch nearly 500,000 HKD.
He then asked, "How long does it take to get from Hong Kong to Los Angeles?"
"That depends on how fast we go," Sun said. "At normal speed, it takes about four weeks. If we speed up, we can make it in three—but fuel consumption goes up by around 50%.
Also, constantly sailing at high speed shortens the ship's life and increases maintenance costs. Once I get more familiar with the ship, I'll be able to make more accurate recommendations."
"Alright. Let's go fast if we can—at least on the first few trips," Yang said. "And if one ship isn't enough, we'll buy more later."
If the first ship proved cost-effective and sales volume continued to grow, expanding the fleet would be inevitable.
Like real estate, shipping could also be highly profitable—perhaps even more so. The challenge was the technical know-how and operational experience it demanded.
Many tried their hand at shipping, but only a few became true "kings of the sea."
"Understood," Wei added. "Mr. Yang, on return trips from the U.S., should we carry goods? Or subcontract that to other shipping companies?"
Yang asked, "I remember that on trips between Hong Kong and the West, ships are usually full outbound but empty on the return, right?"
Sun nodded. "Yes. Hong Kong is primarily an export hub. Manufacturing here continues to boom, especially with shipments to the U.S.
But we don't import nearly as much. Return trips often carry partial loads, and most cargo gets offloaded for redistribution in Hong Kong."
Yang then asked, "Cargo loading and unloading takes time, right? A few days at best? A week at worst?"
"Correct," Sun said. "Heavy cargo can take longer. But our suitcases are large but lightweight. With enough workers, we can unload them in one or two days."
"That's an advantage," Yang said thoughtfully. "We'll definitely need to bring goods back from the U.S. Eventually.
We'll figure out the details once we're actually operating."
"Understood." Sun nodded.
Yang added, "Captain Sun, we've recruited a first officer and other key technical crew in Hong Kong. I'd like you to return with us and get acquainted."
"I think it's better to have them come here," Sun suggested. "Even though the ship will be inspected in Hong Kong, some issues can't be spotted while it's docked.
I plan to sail back with the ship. The voyage will take nearly a month—plenty of time to study it thoroughly.
Your new recruits should come too. That way, we can all familiarize ourselves with the vessel. Some of the current crew will still be onboard, and we can learn from them."
"Good idea," Yang nodded. Then he told Wei, "Old Wei, get our 13-man team to fly here immediately. They'll sail back with this ship."
Yang had already invested hundreds of thousands into this venture—he wasn't going to cut corners now.
The top priority was ensuring the vessel was seaworthy and giving the crew time to familiarize themselves.
Once the ship arrived in Hong Kong and the transaction was completed, it had to be ready to operate immediately.
Time was the most precious commodity.
"I'll make the call right away," Wei said, then left.
Yang looked at Sun and smiled. "Captain Sun, I'll be counting on you."
"Happy to help, Mr. Yang," Sun replied cheerfully.
Yang added, "Once the Hong Kong crew arrives, make sure we stock enough provisions for the trip back."
"No problem," Sun nodded. "But we shouldn't overstock. Perishables like vegetables don't last long. We'll stick to hardy produce."
"Alright." Yang didn't press further.
...
Once business in Europe was wrapped up, Yang and Wei returned to Hong Kong.
Changxing's five flagship products were now scaling up. The three small-sized items were doing great in exports—they took up little space, making shipping easy.
The larger items like the rolling suitcase still had to wait until their cargo ship arrived before mass export could begin.
For now, they focused on the nearby Asian market and small promotional shipments to the U.S.
July 15th – Changxing Industrial Factory
After receiving a status update from Wei, Yang was briefed on the rotating mop.
"Even if we ship it on our own boat, the cost to deliver to Europe and the U.S. is still too high," Wei said. "Though the mop is lighter than the suitcase, it's an awkward shape. It takes up more space."
"I recall its sales in Japan weren't great either?" Yang asked.
"Correct," Wei nodded. "Even shipping it to Japan is costly. In sea freight, weight isn't the problem—volume is."
"Right. It's not ideal for long-distance export." Yang nodded again.
In this era, without the widespread adoption of containers, sea shipping was outrageously expensive.
Though the container concept already existed and was being tested in the West, global implementation was slow. Even Hong Kong wouldn't begin its container port transformation until the late 1960s.
Wei added, "So to maximize profit, I suggest we license production to foreign manufacturers."
"How do we monitor their production volume? We can't enforce that, can we?" Yang asked.
"We can skip the per-unit royalty model and charge a flat licensing fee based on estimated market size," Wei suggested.
"It won't be perfectly accurate, but it'll give us a large upfront payment. We can use that to buy more ships and expand suitcase exports."
"Alright. Coordinate with our international legal team," Yang agreed.
Yang preferred local manufacturing whenever possible.
But if shipping costs killed the profitability, licensing made more sense.
Upfront cash would fund other ventures, create jobs through growth, and still benefit the company.
"Understood," Wei said. "One more thing—yesterday, several major plastic pellet suppliers in Hong Kong simultaneously notified all factories of a 20%–30% price hike."
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